Calgary's long quest to infuse downtown with life enters new phase as election looms

In recent years, if you were to walk by the Taylor Building — a modern-style office tower built downtown during Calgary's 1950s oil boom — it may not have been its history that struck you. It might have been the prominent "FOR LEASE" sign on display.

The downturn that hit the oilpatch eight years ago wasn't kind to downtown workers or the buildings they once filled. Vacancies soared, especially in older buildings, regardless of their once sought after addresses.   

The lease sign on the Taylor Building is now being taken down, though not because an upstart petroleum firm is moving in. On Wednesday, the city announced the Taylor Building would be converted to residential housing, one of five of the latest conversions announced as a part of the program.

It's the latest in a strategy that traces back years and is entering a new phase. And it's one that, if successful, could define the next era of Calgary's downtown in the same way oil and gas defined its last.

But it's also a vision that doesn't precisely align with the philosophy of both the leading parties in the upcoming provincial election — even if all involved say they agree about the necessity to draw life back into a downtown that, after hours, Calgarians often refer to as a "ghost town."

In 2015, after the price of oil crashed, you didn't have to look at the charts to understand the downtown problem. It was a "bloodbath," an office-leasing principal at Avison Young told Bloomberg at the time.

Vacancies soared. Thousands of jobs were cut. Newly shrunk energy firms vacated multiple floors, hoping tenants would take over their leases. 

Then came the pandemic and hybrid work. Calgary, already home to countless quiet towers, saw even more turn out the lights.

The fingerprints of the oil industry are all over Calgary's downtown. The Calgary Tower originally opened as the Husky Tower. Various energy firms such as Suncor and TC Energy still call the downtown home. Even Calgary's slogan, Be Part of the Energy, is a reference to the oil and gas industry. 

But that industry is changing, perhaps forever. Many of the white-collar energy workers who were laid off haven't been hired back, even as the industry's profits have again ballooned.

Though some tech firms have slowly started to move into the core, city officials came to a realization before the latest boom, and years before the pandemic further hollowed out these towers: things were changing. For good. The downtown market was not going to correct itself.

Today, Calgary city council is chasing a goal to remove six million square feet of office space from the downtown by 2031. To do that, it has committed to an approach that has drawn interest from Canadian cities like Montreal and Ottawa, but also, in the United States, Portland, Chicago and Houston.

It's a fundamental shift for a downtown core that has long emphasized a commercial base as its sole priority. It was an effort that raised important questions on whether public dollars should be used to incentivize corporate business plans. And it's not a cure-all, representing a plan of attack only for a small portion of Calgary's approximately 44 million square feet of office space.

"It's certainly one of the many levers we have to be pulling over the course of the next 24 to 48 months to get our downtown core back on track," said Greg Kwong, regional managing director with the real estate firm CBRE Canada.