Quote:
Originally Posted by suburbanite
There can be a significant cost in implementing a "good" design. The leasing market in Edmonton likely doesn't justify the extra $100/sf + in construction costs to go from a Stantec to something like The Bow in Calgary. Some of Calgary's best were built at the height of the oil boom. When vacancy is below 2% and your building is likely fully leased before it's even above ground, you can charge the rents that justify some added flare in the design.
Stantec Tower had to get the City of Edmonton to basically subsidize the project by signing on as an anchor tenant.
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There was no subsidy for this project. It was a pure business deal for the city which is generating quite a bit of new construction.
Let me share........
Regarding taxpayers paying for the Edmonton area. This is all part of public record:
Cost of the arena is $480 million, $130 million paid by the Katz Group, $125 million paid for by a ticket tax on all tickets sold at the venue and $200 million from the City and $25 million from other levels of government for the second ice surface/community rink to be used for the public and nearby university. The City's portion will be paid via a Community Revitalization Zone Levy (CRL) and other extra revenue like parking. Note that there was no tax rate increase in order to pay for any part of the arena.
The philosophy behind the CRL program is:
Major revitalization projects attract and increase local activity, investment and development. Economic growth creates additional tax revenue for all orders of government. Additional municipal and provincial property taxes from the economic growth will help fund the original project.
The amount of new tax revenue that the lands in and around the arena will make for the City on an annual basis, FAR exceeds the $200 million that the City has seeded into this project. There is currently over $2.5 billion in construction going on in the Arena district itself including a 56 floor hotel and residences, 66 floor office/condo (might be as high as 70), a 29 floor office and other retail businesses including a grocer, movie theater complex, restaurants, bars, etc. This district has fast forwarded many new condo high rises that have been announced since the arena was started and would not have existed without the new arena.
The CRL funding forecasts are based on only 40% of the growth predicted in Rollo’s conservative model, and still the CRL was calculated to generate, in net present value, $473 million in new taxes over 20 years.
So how investing $200 million in this multi billion district, getting almost $500 million in new taxation revenue (maybe more) AND revitalizing the city's downtown at the same time is not bad deal.
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