DOWNTOWN: A PLACE TO CALL HOME A cumulative review of residential development in Downtown Edmonton TABle OF ContentS OVERVIEW & OBJECTIVES ................................ pg. 1 THE DOWNTOWN STORY ................................. pg. 1 HUMBLE BEGINNINGS .................................. pg. 2 THE QUARTERS ............................................. pg. 2 DEMOGRAPHICS ........................................... pg. 2 COMMUNITY .................................................pg. 2 VACANCY RATES ...........................................pg. 3 RENTAL MARKET ..........................................pg. 3 FUTURE PROJECTS ............................................ pg. 4 SURROUNDING AREA................................... pg. 4 IMPLICATIONS ...........................................pg. 4-5 CONCLUSION ....................................................pg. 5 MAP & CHART ............................................... pg. 6-8 PARKING LOT TO RESIDENTIAL TOWER .......... pg. 9 pg. 1 OVERVIEW & OBJECTIVES Three major features contribute to a strong and vibrant Downtown: (i) many skilled and diverse residents, (ii) the presence of local amenities and businesses, and (iii) continued innovation and growth. Together, these components stoke the fire of Downtown’s vitality, enhancing the long-term standard of living and economic growth enjoyed by Edmontonians. Our Downtown increasingly features all three of these key components, forecasting continued development for years to come. The Edmonton Downtown Business Association has commissioned this report to document the cumulative residential growth from 1998 to the present within the 8 x 16 block region comprising Edmonton’s Downtown borders. Additionally outlined are some of the possible ancillary effects of this development, as well as the future potential for residential development in the Downtown core. The Downtown Story Edmonton’s Downtown has seen a massive surge in residential development between 1998 and the present. In a short 15 years, 57 residential buildings have been constructed totalling over 5,200 new units and an estimated $1.1 billion in building value. If we include projects that are under construction, as well as proposed future projects, once completed, the estimated cumulative numbers add up to an astounding, 71 buildings providing over 6,700 housing units, and $1.7 billion worth of residential growth. HumBle BeginningS The type of residential being built has changed tremendously over the past 15 years. In 1998 there was an excess of vacant and redundant office space Downtown. This potential resource, when coupled with a $4500 per unit investment plan from the city, sparked a transformation in Downtown’s residential environment. This transformation started off with retrofits of existing buildings, turning old office towers and warehouses into lofts and condo complexes (i.e., Philips Lofts, Cambridge, Courtyard Marriott). As the availability of buildings and cost-effectiveness of this method decreased building shifted into wood frame four-storey walk ups and row housing which provided an economically sensible way to build and add much needed density to Downtown Edmonton (i.e., Monaco, Railtown on The Park). Modest high rises constructed out of concrete and steel were built next to satisfy an even larger demand for density DemographicS in the Downtown core (i.e., Cosmopolitan, Manor 1 and 2). Generally these buildings followed a In 2013, with a population of almost 13,000, Downtown seems to similar pattern for design and were square with nice be full of young professionals, students, and retirees as the large finishing. Today we see taller more slender high- majority groups. The 2012 municipal census supports this, as 39% of rises are being built. The architecture and design of people living Downtown are between the ages of 20-34. We also see these newer buildings has shifted into luxury, with a that out of the Downtown population, 40% are working 30+ hours a high end finish inside and out. week, and another 25% are in post-secondary or retired. There are many reasons why people choose to live Downtown but The QuarterS ultimately lifestyle plays a large choice in where they live. Residents can The Quarters is a neighbourhood in transition enjoy access to the amenities that a Downtown, urbanized lifestyle has towards a vision of renewed vibrancy for its to offer: living within walking distance from work, food, and fun. community. With five residential buildings (Armature, Corners 1, Corners 2, Renaissance Tower, Community and the Artists Quarters) currently being built or on the books it seems as though the transformation Beyond just building residential properties, The City of Edmonton of The Quarters has already begun. Using a $56 and developers have partnered together to build entire million dollar Community Revitalization Levy, the communities. 104 St from Jasper Ave to 102 Ave is a gold standard City of Edmonton, working with developers and for building communities in our Downtown. With 473 new units the community, were already able to generate an since 1998 and current vacancy rate of 1.2%, it has the population estimated $250 million dollars of development from to sustain itself as a community. What makes it successful, is the the five projects being built or currently on the variety of ground level retail and events such as the Saturday market, books. These buildings will account for well over making it a preferred destination location for people from all areas 370 units, and over $1 million in future tax revenue. of Edmonton. pg.3 Vacancy RateS In a study by CB Richard Ellis, Downtown vacancy has been reduced to 1.2%. This extraordinarily low vacancy rate can be attributed to Edmonton’s stable economy and low unemployment. GP Rollo & Associates analyzed and forecasted future population trends for the Downtown based on existing projects and predicted a residential unit demand of 19,323. Consequently, Downtown Edmonton can expect demand for an additional 7,900 units over the next 30 years, and given the 1,500 units represented by being built and future projects categories, there is still a lot of predicted- but-unmet potential for developers to capitalize on future residential demand. Rental Market The majority of Downtown residents choose to rent homes rather than own homes. With 71% of Downtown residents choosing to rent (2012 municipal census) combined with low vacancy rates, several developers are beginning to offer purpose-built rental properties. The demand for rental property will only increase with Grant MacEwan University, University of Alberta, and NorQuest College consolidating some of their programs into Downtown campuses. Ultimately this influx of students represents increased vitality and population in the city’s core. For example, The Coast Edmonton House on Bellamy Hill transformed all 300 of its units into rental, and the Mayfair South on 109 St and Jasper Ave introducing 237 new rental units are both examples of how developers are satisfying Downtown rental demand. Future ProjectS Fourteen new residential buildings are being built or planned in the 8 x 16 blocks of Downtown. These developments represent over $500 million dollars in additional residential complex’s and 1,500 new residential units. Surrounding Area Downtown’s surrounding neighbourhoods play a part in its success and add to its vitality. Often people from neighbouring communities travel to Downtown for its wide variety of restaurants, stores, and other services. Considering only four developments just outside of Downtown, Regency Developments’ Edgewater on Jasper and The Pearl, WAM’s Clifton Place, and Edgar Developments’ Hendrix condos will provide over 1,250 new units to Edmontonians who will take full advantage of the amenities that Downtown offers. ImplicationS The implications of this vast growth in Downtown are astounding. As a result of the residential development from 1998 to the present, the City of Edmonton is estimated to now collect more than $8.8 million additional dollars in tax revenue per year. Once completed, the being built and future projects stand to raise this number to over $13 million of extra revenue per year. Beyond the increased tax revenue, this residential development also plays an important role in changing the face of Edmonton. With every new tower, the shape of the skyline changes, and the ground level retail and commercial space grows. The Fox Towers being built on 104 St and 102 Ave are future examples of this, offering together approximately 75,100 Sq. Ft of commercial space and what is expected to be 28 and 33 story residential towers. Between the increased availability of commercial space at ground level, and the impressive height of the towers, the 104 St pg. 5 community will be enhanced from the street level to the skyline, contributing to the vitality of Edmonton’s Downtown as a whole. Residential construction is also good news for the workers and the economy. With every residential tower being built, jobs are being created Downtown. Generally speaking, half of a building’s cost goes to labour. A tower like the Ultima employs roughly 250 employees at its peak, with a variety of roles. Using 200 jobs at peak as a fair avearage, then we may expect that three of the buildings currently being built, the Armature Hotel, Fox Tower 1, and the Ultima will create over 650 jobs Downtown. If the 6 large residential towers from the future projects category are included, that number increases to an additional 1,200 jobs in the future, with many of