Uber decision deferred, $41 million for Edmonton City Centre, have your say on the budget

I’m trying something new, where I share some thoughts on a few topical items in one post. Less than I’d write in a full post on each, but more than I’d include in Edmonton Notes. I’ll organize them here. Have feedback? Let me know!

Uber Decision Deferred

Today was the big Council meeting to discuss the proposed Vehicle for Hire Bylaw. Last week the City informed the media they’d need to pickup a press badge in order to be present today, and security was increased at City Hall in anticipation of heated protests. But despite a few minor outbursts during the meeting, it all felt a little underwhelming. Many Councillors used the opportunity to get on their respective soapboxes to complain about whatever – some ripped into Uber, some expressed anger at Administration, and one or two questioned why we regulate taxis at all. But that was the only drama, because in the end Council asked for more information and deferred a decision on the bylaw until late January.

Make no mistake, Uber is going to walk away from this whole situation happy. Why? Because there’s a lot more Edmontonians that want to see Uber here as an option than there are Edmontonians willing to speak up for the taxis. Council is hearing loud and clear from constituents that they want Uber in Edmonton, and that’s the most effective way to get Council to budge on something. And even if the rules that do eventually get passed aren’t ideal for Uber, they may be good enough as Councillor Walters points out. They’re threatening to leave now because it helps them secure a better negotiating position. But once there are rules to play by, it’s a simple business decision – can they make money following those rules or not?

$41 million for Edmonton City Centre

Today via Ted Bauer I saw that Oxford Property Group is planning to invest $41.3 million to “revitalize the entire retail experience” of Edmonton City Centre. A big part of the plan is to “relocate and significantly upgrade” the food courts. Currently located on the lowest level of the mall, one on the west and one on the east, the existing food courts will be consolidated centrally on the top level (as is now common in other malls and shopping centres).

Edmonton City Centre
Edmonton City Centre, photo by IQRemix

The news release mentions that “over 23,000 new residents are expected to be living downtown by 2019.” It’s great to see that Edmonton City Centre is looking at this as an opportunity and that they’re willing to invest in order to compete with Ice District. There are already a lot of empty spaces in the mall, including many that have been empty for months or even years. With a new hotel, new theatre, and lots of other retail moving just a block or two away into new buildings in Ice District, it was starting to look like Edmonton City Centre would be even emptier in just a few years.

I would suggest this investment is the minimum necessary in order for Edmonton City Centre to compete. And their relative silence on all the development happening downtown was not inspiring much confidence, so this is a nice surprise. But let’s keep it real, ok? Here’s what the Oxford site currently says:

“There’s a huge buzz coming out of downtown Edmonton—and it’s resonating entirely from Edmonton City Centre.”

That’s a bit of a stretch! Still, good to see them willing to make a play for a piece of the pie.

Have your say on the 2016-2018 Operating Budget

We’re in the middle of budget season, as you are probably aware. On Monday, November 23 a non-statutory public hearing will be held at City Hall from 1:30pm to 9:30pm. It’s an opportunity for you to speak directly to City Council about the proposed budget before a decision is made in early December. If you’d like to register to speak, you can do so here.

The full budget is available at edmonton.ca/budget2016. If you’d like a friendly introduction and overview to the budget, check out yegcitybudget.ca. And finally, if you’re a geek like me and want to dig into the data, budget.edmonton.ca is the best place to start.

The final budget discussions get underway starting November 27.

Meet me on the bridge: The Edmonton City Centre Redevelopment

It was 1974 when City Centre Place was completed, part of the Edmonton Centre development across from Churchill Square. The shopping mall we now know as Edmonton City Centre has had an interesting history, to say the least. TD Tower was added to the complex in 1976, and Oxford Tower and the Sutton Place Hotel followed in 1978. As Christopher Leo notes (archive), downtown was the place to be back then:

In the 1970s, downtown Edmonton was the retail centre of the metropolitan area, and the city had a policy of sustaining that role by supporting the viability of residential neighbourhoods near the centre of the city and placing limits on the amount of permitted suburban shopping centre development.

The development of West Edmonton Mall by the Triple Five Corporation in the 1980s had a significant negative impact on downtown Edmonton, and on the City Centre mall in particular. The policy limiting suburban shopping centre development was forgotten. As a result, efforts to restore life to downtown began and Triple Five came along with a solution: Eaton Centre. Christopher has documented the ups and downs of that project very thoroughly, so suffice it to say that what was eventually built in 1987 was a mere shadow of the original vision.

The two malls staggered along until 1999 when the Eaton’s chain went bankrupt. It was around that time that Randy Ferguson came to Edmonton on a mission to straighten things out. He remembers his boss at Oxford Properties, Jon Love, telling him two things before he left. “Go get the job done in the best interest of the community and this company,” and “remember one thing: that’s my hometown”. Randy’s journey began on January 2, 2000.

“There was very little energy downtown,” he recalled. Eaton Centre and Edmonton Centre had separate identities. Thinking back to the amount of space they took up downtown Randy told me how he felt: “it was depressing.” He had a job to do however, and his first task was to convince the Oxford board that they should spend money in Edmonton, their weakest market. “We said, don’t think about this as a retail play.” Randy pointed out that 40% of the office space downtown fed into the property. Four office tower lobbies and two hotels directly. The board gave Randy the go-ahead, but with a budget of just $44 million.

Randy and his team made a number of big changes over the next few years. Randy felt that a department store facing Churchill Square was inappropriate, so they convinced The Bay to move to the other side of the mall, to the vacant Eaton’s location. They turned the basement of the now empty east side into a parkade, and managed to attract Sport Check, Winners, and CBC. There were challenges along the way, of course. In the fall of 2001, Randy had arranged to have the western executives in charge of CBC’s TV and Radio divisions come to Edmonton so that he could pitch the idea of consolidating CBC’s properties in the mall downtown. The morning of the presentation was September 11. Needless to say the deal didn’t happen until many months later!

City Centre Wide Bridge

Merging the separate Eaton Centre and Edmonton Centre identities was an important aspect of the redevelopment. Randy wanted to do something architecturally to combine the two properties, and thought about a pedway bridge. “I think our bridges are terrible,” he told me. “They’re ugly, utilitarian, and generic.” In fact, Randy dislikes our pedway bridges so much that he pitched the idea of wrapping each one in scenes depicting the events taking place at the 2001 World Championships in Athletics. Unfortunately, the City didn’t go for it.

Randy wanted the bridge joining the properties to be more than just a pathway, he wanted it to be iconic. That’s how he came up with the wide bridge concept. “I wanted it to become the meeting place,” he recalled. “You know, ‘let’s go for coffee…meet me on the bridge!’” He envisioned a Starbucks and a patisserie on the main level of the bridge, with the rest of the space available for seating. They built a second level as well, a space that Randy thought would make an excellent wine bar. “We put two circular staircases on the bridge, ran power, and even roughed in plumbing.” As it turns out, Randy’s vision was never fully realized. “It has never been programmed the way I imagined it.” Today the bridge is home to a Tim Horton’s, a Telus Mobility kiosk, and a few retailers including a Bell store. The second level is empty and inaccessible. That’s unlikely to change anytime soon, due to the leases that are in place.

Edmonton City Centre Wide Bridge

Randy and his team had to be creative in order to achieve everything they wanted with the redevelopment project, which was finished in 2003. “We accomplished an $80 million spend on a budget of $44 million,” he said. He had spent some time studying funding programs elsewhere in North America, and came across a tax increment financing (TIF) project in Florida. “I liked it because it had a direct connection to rehabilitating the area, and it had a sunset, it wasn’t forever.” Randy worked with Al Maurer, City Manager and Randy Garvey, then the GM of Finance at the City of Edmonton, to see if he could make such a program work here. Alberta’s CRL legislation didn’t exist yet, so they could only apply the tax increment from the City to the project, the school taxes could not be touched. They followed the sunset model, whereby 100% of the tax increment went to the project in year one, 90% in year two, and so on. Randy thinks it might be the first example of a TIF used in Alberta.

City Centre Wide Bridge

When the time came to build the wide bridge, Randy again was out of money. Recognizing that it technically wasn’t on land that Oxford owned, they applied for a local improvement levy. The City studied the legislation and agreed that the funding mechanism was appropriate, so that’s where the money for the bridge came from. Further funding for the redevelopment project came through the creative use of a Commercial Mortgage Backed Security, something that would never happen today given the current recession.

Given his history with the concept, I asked Randy for his thoughts on the idea of using a CRL to help pay for the downtown arena. “I am a huge fan of CRL or TIF – it can make things happen that otherwise wouldn’t.” He doesn’t think the proposed formula is the best one, however. “I believe the school tax portion of CRL should be sacred, it shouldn’t be in play,” he told me. Randy also feels the sunset approach is better than 100% for 20 years as the current legislation allows. “We need to benefit from that growth, along with the guys that are making the investment.” He suggested that the City should get some local experience at the bargaining table, someone like Randy Garvey.

Randy supports the proposed arena project, even though it is competition for ProCura where he is COO. “It’s about critical mass. It’s about creating a new day.”