d o w n to w n b u s i n e s s r e te n ti o n u p d a te · edmonton. this report provides an...

6. 5

Downtown Business Retention Update

Recommendation That the July 12, 2019, Urban Form and Corporate Strategic Development report CR_5980, be received for information.

Previous Council/Committee Action At the April 30, 2018, Executive Committee meeting, the following motion was passed:

That Administration provide an update on downtown business attraction and retention activities by the City, the Downtown Business Association, and Edmonton Economic Development Corporation.

Executive Summary In pursuit of the vision laid out in ConnectEdmonton, the City works alongside its economic development partners to build a diverse, prosperous regional and local economy. The City’s partners include the Downtown Business Association and Edmonton Economic Development Corporation, who along with the City have the shared goals of promoting innovation, economic diversity, competitiveness, and increasing Edmonton’s capacity for growth. The underlying principle of the collective efforts to advance economic development outcomes downtown is city building. Building and celebrating a downtown which is dynamic, attractive, and an integrated urban place creates and enhances the experiences that support peoples’ choice to live, shop, work, play, and invest in all of Edmonton. This report provides an update on the work of the City, Edmonton Economic Development Corporation, and the Downtown Business Association to attract and retain businesses in Downtown Edmonton. This report also provides an update on the status of the Downtown commercial real estate market for retail and office space. There are positive signs in the office market, with vacancy rates trending downward. Ongoing changes in the retail sector are creating an increasingly dynamic environment, resulting in new approaches by businesses and property owners. As Downtown has grown in population and increasingly become a destination for visitors and investors exploring Edmonton, the City, Edmonton Economic Development Corporation, and the Downtown Business Association must continue to

.

ROUTING - Executive Committee | DELEGATION - S. McCabe/P. Ross/J. Chase/A. Shamchuk/J. Shewchuk/ I. O’Donnell July 12, 2019 - Urban Form and Corporate Strategic Development - CR_5980 of 7


work together on complementary business attraction and retention activities, and continue to collaborate to ensure Downtown is a clean, inviting, and attractive place to live and invest. In this context, the City, Edmonton Economic Development Corporation, and the Downtown Business Association are working together to identify potential new approaches to maintaining and beautifying Downtown public spaces.

Report

Downtown Business and Real Estate Update

In recent years, City Council has heard about the challenges and opportunities of a rising office vacancy rate Downtown as it relates to business retention and attraction (April 30, 2018 Executive Committee report CR_5390 Downtown Business Retention). Since the last report to Committee on this subject, office vacancy and absorption rates indicate that the Downtown real estate market is slowly recovering. As of Q1 2019 Downtown office vacancy rates have fallen to 13.3 percent from a high of 15.3 percent in Q1 2017. 2018 had strong absorption, with ~522,000 square feet taken up by the market in comparison to the ~700,000 square feet of excess space left on the market in 2016. The market has captured many of the convertible office towers that had been challenged with vacancies and many are currently being renovated or are in advanced stages of planning to do so. These renovations include conversions to multi-family housing, hotels, and upgrades to higher asset classes. Technology and professional service firms continue to grow their Downtown presence. Some of these firms take up larger amounts of space (whole floors and multiple floors), however many coming into the market are starting as small teams of two or three staff taking up co-residency with a client or partner. There is potential for these smaller embedded teams to expand their local footprint into standalone offices. With respect to retail space, online ordering continues to disrupt the retail sector and is anticipated to grow in the future. This disruption is forcing businesses and landlords to interact in new ways. Both independent and chain retailers are placing greater emphasis on customer experience, creating unique environments to showcase their products in a way that differentiates them from online and big box competitors. Landlords are seeking tenants that deliver in-person services, entertainment, and experience-focused businesses to fill spaces that would have otherwise been occupied by conventional retailers. Consequently the hospitality industry has been driving the retail real estate sector Downtown.

City Building Aspects of Business Attraction and Retention

A city’s livability is a critical aspect of how well it is able to attract and retain people and businesses. Livability can be impacted by both large scale development or redevelopment projects, and by operational factors such as street cleanliness and maintenance. Downtown Edmonton plays a significant role in attracting visitors,

of 7 Report: CR_5980


businesses, and new residents from the region and further afar. As a result of development activities in the core, the Downtown residential population has nearly doubled since 2001, growing from 6,170 residents to over 11,500 in 2016. This growth outpaced the City overall, which grew in population ~29 percent over the same period. The real estate market is signalling anticipated further growth in the Downtown housing market. According to the Downtown Business Association’s 2018 Retail Study ~11,600 housing units are proposed, approved or under construction which represents nearly a doubling of the number of dwelling units in the Downtown in the next five to ten years. The City’s Capital City Downtown Plan laid out a vision and associated catalyst projects designed to promote Downtown development, and a long term commitment was made through the adoption of the Capital City Downtown Community Revitalization Levy to fund such initiatives. The levy has leveraged significant development by committing resources to develop Rogers Place and related public infrastructure around the ICE District, including the MacEwan LRT station and the Downtown Community Arena. The City is leading a number of projects to build new amenities and enhance existing infrastructure that supports the ongoing transformation of Downtown into a vibrant, accessible, and sustainable community. This includes major new underground infrastructure, new parks and streetscape improvements. While acting as catalysts for new investment, these projects also make the core attractive and desirable for existing and future users and residents. The City also works to attract investment through programs like Development Incentive Program which provides matching grants for new commercial and mixed-use development projects and to retrofit chronically vacant commercial spaces. In recent years the City, institutions, and private developers have invested billions into downtown. Between 2016 and 2018 alone, the City approved more than $1.7 billion in commercial building permits within the boundaries of the Downtown Business Improvement Area. Major projects in recent years include the Rogers Place, Stantec Tower, the JW Marriott building as well as the complete renovation of existing office buildings such as HSBC Tower and numerous new residential towers. The renovation of major downtown arts institutions like the Winspear, the Citadel, and Stanley Milner Library are also underway or in the planning and approvals stage. Beyond the investment made by the development community and institutions, the City has invested significantly in downtown infrastructure and amenities, including major capital projects such as the construction of the east leg of the Valley Line LRT, Alex Decoteau Park, and the Downtown Bike Network. This period of downtown construction is unparalleled in its scale and scope and is the outcome of a concerted effort by the City and its partners to further the transformation of Downtown into a more vibrant, urban, and livable neighbourhood and destination for residents and visitors.



A natural outcome of this construction is disruption on the streets and avenues in the form of road closures, barricades, dust and construction debris. While the City carefully manages construction impacts through the permitting processes, it is inevitable that some disruption and inconvenience will occur. The City is committed to working with its partners and businesses to help mitigate impacts of construction and maintenance work on their operations and continues to explore opportunities to improve its approach to this work. The City and its partners work with the development and commercial brokerage communities to promote and advance projects and initiatives that contribute to Downtown's ongoing development. The result of this effort is reflected in the many development projects that are being built or actively planned around catalyst projects identified in the Capital City Downtown Plan. As the number of people experiencing Downtown as residents, visitors, staff, and investors increases with each new development and amenity, it is essential that Downtown be a clean and inviting place to ensure it maintains and enhances it’s reputation as a preferred place to visit, live, or invest in a business. To this end the City, the Downtown Business Association, and Edmonton Economic Development Corporation work together to attract people and investment to Downtown with programs, services, and joint initiatives to ensure the physical environment is clean, beautiful, and welcoming.

Enabling Environment for Investment

The City, Edmonton Economic Development Corporation and the Downtown Business Association serve complementary functions and work together as partners in economic development. Some program highlights offered by each organization are outlined in the table below (see Attachment 1 for additional detail). City of Edmonton ● Zoning and policy updates

● Grant programs (facade, development incentive, brownfield) ● One-on-one business support for new entrepreneurs navigating

regulatory processes ● Small business workshop series ● Ongoing business related process improvements ● Capital City Downtown Community Revitalization Levy catalyst

projects ● Civic Events and Festivals ● Public space maintenance and Beautification

Downtown Business Association

● Beautification ● Core Crew ● Downtown dining week ● Backing events and festivals ● Parking strategy ● Security forum



● Convening stakeholders

Edmonton Economic Development Corporation

● Business trade expansion education, support, market access (Enterprise Edmonton / Trade Accelerator Program)

● Business education on benefits of being downtown, especially tech-enabled companies (Enterprise Edmonton)

● Attraction of out-of-town conventions and conferences that fill hotel rooms (Edmonton Convention Centre)

● Helping entrepreneurs validate, build, launch tech-enabled companies (Innovate Edmonton)

● Student, entrepreneur, tech programming (Innovate Edmonton) ● Major events attraction (Edmonton Tourism)

There are a range of public and private entities that also support an environment for investment downtown. This includes property owners, post-secondary institutions, business incubators, community groups, and entrepreneur training programs. The City, Downtown Business Association, and Edmonton Economic Development Corporation work alongside, and in collaboration with these groups in different ways.

Next Steps

Through conversations with the Downtown Business Association and Edmonton Economic Development Corporation in the context of this report, Administration has heard that it is critical that Downtown be perceived as clean and inviting in order to attract and retain businesses. The Downtown Business Association has advised that there is an interest from the Downtown business community in changing the way prominent streets and public facing spaces are maintained. Key areas of interest that have emerged include: street and sidewalk cleaning, snow management, planting and landscaping, and the level of maintenance of surfaces and street furniture. Attachment 2 and Attachment 3 provide further perspective from the Downtown Business Association on these items. Administration will work with the Downtown Business Association to bring together key stakeholders in the Business Improvement Area in order to identify potential ways to better coordinate and improve maintenance and beautification efforts. Actions to be explored include:

● enhancements to base levels of service; ● prioritization of services to specific streets and areas; ● better coordination and communication between stakeholders; and ● potential partnerships and cost-sharing opportunities between landowners,

business owners, organizations and the City.

Potential new approaches to improving service levels Downtown, including any pilots to test these, would likely require either re-allocation of existing resources or identification of new funding from the City and/or partners.



Corporate Outcomes and Performance Management

Corporate Outcomes: Edmonton has a globally competitive and entrepreneurial business Climate, Edmonton is attractive and compact

Outcomes Measures Results Targets

Edmonton has a globally competitive and entrepreneurial business climate

Downtown office vacancy rates are declining

Q1 2016 - 8.7% Q1 2017 - 15.3% Q1 2018 - 14.4% Q1 2019 -13.3% (Source: Avison Young)

Reduced office vacancy rates

Downtown commercial retail storefront vacancy rates are declining

August 2018 - 13.6% (BIA Economic Indicators)

Reduced commercial retail storefront vacancy rates

The number of licenced businesses Downtown is stable or growing.

2016 - 877 business licences Downtown 2017 - 989 business licences Downtown 2018 - 1118 business licences Downtown

Maintain or grow

Downtown businesses report they are stable or growing.

2017 - 23.1% reported growth 2017 - 26.1% reported stability n=134 2018 - 25.4% reported growth 2018 - 45.8 reported stability n=236

Majority of businesses report growth

Edmonton is attractive and compact Patrons of Downtown businesses report the area is aesthetically pleasing

2017 - 56% of surveyed patrons agree Downtown is aesthetically pleasing, n=98. 2018 - 36.5% of surveyed patrons agree Downtown is aesthetically pleasing, n=568. (BIA Economic Indicators)

Increased number of patrons report Downtown is aesthetically pleasing

New residential units in core and mature neighbourhoods (as a percentage of total new residential units city-wide)

19.2% (2017) Mature Neighbourhood Reinvestment Report

25% Based on the targets in The Way We Grow and in the Edmonton Metropolitan Region Growth Plan (2018)

Attachments 1. Activities Supporting Economic Development of Downtown 2. Downtown Business Association 3. Downtown Business Retention Update

Others Reviewing this Report ● R. Kits, Acting Deputy City Manager, Financial and Corporate Services



● C. Owen, Deputy City Manager, Communications and Engagement ● G. Cebryk, Deputy City Manager, City Operations ● R. Smyth, Deputy City Manager, Citizen Services


Attachment 1

Activities Supporting Economic Development of Downtown The City and its partners, the Downtown Business Association and Edmonton Economic Development Corporation, each play important roles in economic development. The table below describes some of the work The City, Downtown Business Association, and Edmonton Economic Development Corporation undertake that contribute to supporting a vibrant, prosperous Downtown. City of Edmonton

Zoning and policy updates Zoning Bylaw Amendments ● Overhauled the RA9 zone to support more opportunities for high rise residential development ● Created additional opportunities for semi-detached housing and secondary suites, which

support a range of more affordable housing options ● Advanced work on updating the Missing Middle zones to facilitate this type of housing and

support broader housing choice for individuals and families. ● Removed Development Permit requirements for Change of Use developments (this is when a

new business moves into an existing building). ○ Changes apply to 22 business types, and include those located in Downtown. ○ This makes it easier for businesses to open in existing buildings.

● Introduced the Special Events use which creates clearer parameters for pop-up and other temporary activities

○ This can facilitate pop-up shops and festivals on private property and parkland. ● Development and implementation of the Downtown Public Places Plan: a network approach to

coordinating open space needs, connectivity, and programming for future investments in the Downtown + Quarters

Grant programs ● Storefront Improvement Program offers matching grants for businesses and property owners to improve the appearance of the exterior of their buildings in BIAs.

● Development Incentive Program offers matching grants for businesses and property owners to improve the interior of chronically vacant/underutilized commercial spaces and develop new commercial and mixed use buildings in BIAs.

● Heritage Community Investment Program provides funds to owners of heritage buildings to maintain and restore their properties.

Page 1 of 5 Report: CR_5980

Attachment 1

● Sustainability Grants: Starting in Q4 2019, the City will provide commercial energy efficiency rebate program to help businesses save energy and money as well as the existing Corporate Climate Leaders program which provides grants to help businesses take action on climate change through active greenhouse gas (GHG) management across their operations. An energy audit rebate is also available for businesses through the Building Energy Benchmarking program.

● The Brownfield Redevelopment Grant Program promotes redevelopment of qualified brownfield properties by helping cover some of the testing and remediation costs.

One-on-One business support

This program provides customized one-on-one support to new entrepreneurs to understand and navigate regulatory processes. Administration works closely with stakeholders in economic development to support our shared clientele, build relationships, and to tailor the program to the unique needs of different groups.

Ongoing process improvements

Urban Form Business Transformation is a two-year initiative by the City of Edmonton to improve services related to land and property development, including: rezoning, subdivision, development permits, building permits, and building permit inspections. The six projects in the initiative will result in improved customer service through:

● increased consistency and predictability for customers with some specific measurable target timelines and process clarity; and

● increased integration and accessible staff knowledge,

Small business workshop series

This workshop series brings together City staff, established businesses, and new entrepreneurs to help them to better understand the unique requirements of opening different kinds of businesses. Recent events have focused on opening microbreweries, opening a patio, and starting a home business.

CRL catalyst projects (Downtown + Quarters)

● Rehabilitation and Activation of City-owned Buildings ● Kinistinaw Park Construction ● Historic GWG Building Activation ● Creating a Development and Storefront Incentive for Quarters Area ● Warehouse Campus Neighbourhood Central Park ● Jasper Avenue New Vision ● Green and Walkable Downtown ● Centennial Plaza Redevelopment


Attachment 1

Civic Events and Festivals ● Public Programs delivery in City Hall and the Civic Precinct (e.g. New Years Eve, Edmonton Arts Council Square Programming, Swingin’ City Sunday program; Live at Lunch and the City Hall Market and Food Truck program)

● Happy Wall installation in Sir Winston Churchill Square ● Festivals & Event Civic Services coordination

○ Festivals e.g Taste of Edmonton, The Works Art & Design Festival; ○ Events e.g. Red Bull Crashed Ice, FISE World Series, Nuit Blanche and Grey Cup ○ Parades e.g. K-Days, Cariwest and Santa's Parade of Lights ○ Runs and Walks e.g. Edmonton Marathon, Lululemon 10K

Maintenance and Beautification

● Planter, Placement, Removal and Maintenance ● Turf Maintenance ● Blooming Boulevard Program Administration ● Dogs off Leash Program Administration ● Community Gardens Program Administration ● Natural Areas Operations and Maintenance ● Tree Lighting ● Public space servicing, litter collection and garbage removal ● Graffiti removal ● Encampment Cleanup Operations ● Needle Box Collection ● Tree Pruning and Planting ● Elevated prioritization of maintenance tasks for all horizontal assets (ie. asphalt, brick and

concrete) due to the large volume of pedestrian and vehicle traffic ● Maintenance teams routinely repair deficiencies prior to events, festivals and parades ● Snow and ice control


Attachment 1

Downtown Business Association

Beautification Funding for additional temporary planters during warmer seasons and funding for seasonal lighting for the winter

Core Crew Each summer the DBA’s Core Crew leads free walking tours of Downtown for visitors and residents.

Downtown dining weeks Promotional events to attract people to visit restaurants.

Backing events and festivals Funding to support events and festivals downtown.

Parking strategy Ongoing work to promoting the availability of parking downtown.

Security forum Hosted a forum of stakeholders in downtown safety and security to identify issues and workshop potential solutions. Results of this forum reflected in the DBAs 2019 Safety and Security report.

Convening stakeholders Convenes multiple sub-committees of BIA members and stakeholders to bring together a range of perspectives to share information and respond to opportunities as they emerge.

Edmonton Economic Development Corporation

Business trade expansion education, support, market access (Enterprise / TAP)

The Trade Accelerator Program (TAP) assists Edmonton companies to grow their customer base outside of the local region, facilitating retention and expansion within Edmonton. The program gives companies a better base understanding of what it takes to export. EEDC provides ongoing support in enabling these companies to get to market and assists with their growth once they are exporting. EEDC continues to facilitate conversations on a company level on the benefits of being downtown, especially for technology related companies (recent examples include: Solut, Mindslab). Edmonton Investment Partners is looking to add much needed venture capital funding for startups in the health space.

Attraction of out-of-town conventions and conferences that fill hotel rooms (ECC)

EEDC continues to attract a range of conventions and other initiatives to downtown Edmonton which contribute to the number of people staying in downtown hotels and supporting downtown businesses. 2018 included 31 conventions (+526,000 visitors).


Attachment 1

Helping entrepreneurs validate, build, launch tech-enabled companies (Innovate)

Start-Up Edmonton offers programs that take technology and technology-enabled entrepreneurs from idea phase to start-up. They work to connect entrepreneurs with investors, including through events like Launch Party. Launch Party offers the opportunity to meet the city’s brightest entrepreneurs, try their products, and celebrate everything that the Edmonton startup community has to offer. Launch Party is a flagship event of Edmonton Startup Week and showcases the hottest startups in town. Attendance grew by 19 per cent over 2017 with more than 800 business and innovation community members joining the celebration and supporting our launch companies.

Student, entrepreneur, tech programming (Innovate)

The Preflight program grew by 32 per cent, helping more entrepreneurs validate, build and launch tech-enabled companies. Startup Edmonton engaged with more than 5,000 students – whether building a project at a hackathon, meeting potential startup and scaleup employers or accessing support to launch their own companies. More than 250 students attended the Student Developer Conference.

Major events attraction (Tourism)

Marketing to promote Edmonton as a tourist destination in Alberta and other markets. Works to attract major events, such as FISE and Redbull Crashed Ice, which contribute to downtown Edmonton’s economy.


adasha

Typewritten Text

CR_5980Attachment 3

May 10, 2019 Re: CR_5980 - Downtown Business Retention Update Yardstick realized that having access to knowledge economy talent meant being close to the amenities these workers desire. We also realized that for Edmonton to have and sustain a cluster of that kind of talent, we might need to be an early catalyst ourselves. We even lose some of our talent to the ecosystem, but we all gain essentially more from a greater density and vibrancy of tech companies. We were both benefactors and supporters of the area. Chris LaBossiere CEO & Co-founder Yardstick When Stantec was exploring options for office consolidation, two factors drove our decision to ultimately choose Stantec Tower. Our Company wanted to reaffirm our commitment to the City of Edmonton, and we wanted employees to have a vibrant, accessible workplace. The development of ICE District and the excitement surrounding the revitalization of our downtown core made Stantec Tower the clear choice. Scott Argent Vice President, Regional Leader Stantec, Edmonton Capital Region “Being a Downtown Technology business for the past eight years, we as an organization have seen the transformation and evolution of the downtown core as a symbiotic relationship. We have over tripled in size in that time, and are excited about what the Downtown core has and continues to become. So much so 18 months ago when we started looking for space in advance of our lease being up in December of this year, we paused to reflect on where we wanted to be and live as an organization for the foreseeable future. We then empowered our employees by turning the decision over to them, stay Downtown or move to a less urban area? Our culture spoke, and over 85% wanted to stay here in the core, and I am happy to say we signed a ten-year lease on 13,000Sq feet. Being here isn’t just about office space, it’s about calling somewhere home, the people, the culture, the amenities, and most of all the community.” Jeremy Hayward President Solut

adasha

Typewritten Text

CR_5980Attachment 2

When exploring what was next for Work Nicer it was clear to set up in downtown Edmonton over other places like Vancouver, Toronto, or Saskatoon because it was what was best for Work Nicer members and for Alberta. Hundreds of Alberta’s entrepreneurs, small businesses, remote workers, and enterprise companies are newly empowered to utilize this bridge between them that starts with the Work Nicer outposts in both downtown Edmonton and in Calgary. Companies have expanded their business outside of their city when they would not otherwise have been able to do so had Work Nicer went to another city. Edmonton’s downtown has an energy, a revitalization, and opportunity like nowhere else in Alberta and Work Nicer is so proud to be a part of it. Alex Putici Work Nicer Coworking

Daily power sweeping/washing in Downtown Seattle

Three FTEs in Downtown Kelowna: power-washing, littler, graffiti, plantings, minor maintenance

Vibrant, clean, multi-modal, plantings in Downtown Seattle their main street (Pike)

d o w n to w n b u s i n e s s r e te n ti o n u p d a te · edmonton. this report provides an...

Documents