Calgary expands options for office conversion program

Key Takeaways:

• The program originally focused on office to residential conversions.
• It has been expanded to help convert empty office space to hotels, schools and performing arts spaces.
• The city is also streamlining the program’s approval process by increasing the internal approvals threshold from $10 million to $15 million.
• Two new incentive programs have also been created, supporting office conversion to post-secondary institutions as well as office demolition for buildings that are not suitable for conversion or reuse.

The Whole Story:

The City of Calgary has expanded its Downtown Calgary Development Incentive Program beyond office to residential conversions.

The program now also provides grants to building owners who would like to convert empty office space to hotels, schools and performing arts spaces. Two new incentive programs have also been created, supporting office conversion to post-secondary institutions as well as office demolition for buildings that are not suitable for conversion or reuse.

City Council approved the expansion in order to encourage a more diverse mix of amenities and services downtown. Officials said the three incentive programs will support the revitalization of downtown through the creation of new housing, amenities, services and outdoor public spaces.

“What happens downtown has a direct impact on our city’s livability and economic success in terms of revenue, tax base and ability to provide services,” said Mayor Jyoti Gondek. “The Downtown Development Incentive Program has been incredibly successful so far and we are already one-third of the way to our 10-year goal of removing six million square feet of empty office space. As the demand for urban living remains high, the natural next step is to expand the program to develop both more residential units as well as projects that create amenities and services for residents close by.”

The conversion inventive program is being broadened to include conversion projects for hotels, schools and performing arts spaces. The city is also streamlining the program’s approval process by increasing the internal approvals threshold from $10 million to $15 million. Officials explained that this speeds up the approval process for larger projects (up to 200,000 square feet) by removing the need for Council approval. Increasing this threshold reduces risk for applicants and speeds up project approvals.

The Downtown Post-Secondary Institution Incentive Program

This program has been created to provide financial incentives for post-secondary institutions to establish a greater presence downtown. This would bring an influx of students downtown, which would support downtown’s vibrancy during all hours of the day, support existing businesses and would encourage new businesses to be established. City Council approved $9 million in November 2022 for a pilot project to support the conversion of vacant office space to house the University of Calgary’s School of Architecture, Planning and Landscape (SAPL). The Downtown Post-Secondary Institution Incentive Program follows this pilot project and sets out program criteria for applicants, approvals process and funding sources for future office to post-secondary conversions.

The Downtown Office Demolition Incentive Program

This new program incentivizes the demolition of buildings that are deemed “end-of-life” and are not suitable for conversion or reuse. The program will support non-office redevelopment and the creation of new public amenity space. Currently, $3 million in funding exists for this program, and additional funding sources may be identified in the future pending grant interest and demand.

“The Downtown Calgary Development Incentive Program was created to remove excess office space from downtown, support downtown vibrancy and ultimately support The City’s fiscal sustainability by restoring downtown property values,” said Natalie Marchut, manager, development & strategy for the city’s downtown strategy. “Supporting post-secondary institutions will bring more students downtown, breathing new life, activity and innovation into our downtown. Creating new public amenity space through demolition of empty buildings supports the initial intent of the program, making downtown more livable, vibrant, and more attractive for both residents and visitors.”

The Downtown Calgary Development Incentive Program is a key initiative of The City’s Downtown Strategy. To date, 14 office-to-residential conversion projects are under consideration for program funding. Should all 14 projects proceed, they will remove two million square feet of empty office space from our downtown and create more than 2,000 homes. That’s one-third of the way to The City’s 10-year goal of removing six million square feet of empty downtown office space.