Rejuvenating Calgary’s Downtown

Introduction

Calgary has a downtown office vacancy problem. Successive oil booms have been accompanied by expansion of the downtown core. However, collapsing oil prices, accompanied by the economic downturn caused by a recession and the COVID-19 pandemic have reversed this trend. This has led to unprecedented office vacancy rates ranging from 26–50% depending on the downtown zone (Aldrich, 2022).

Our group sought to employ design thinking to address this problem, focusing on: “How might we address the increased corporate vacancy rates in downtown Calgary to best serve our community?” Our design approach employed empathy maps with the key stakeholder groups affected by this problem, embedding human-centered design during the ideation and prototyping phases. The ideation phase consisted of analyzing the needs and desires of all of the stakeholders and working collaboratively to discuss possible prototype solutions. During the implementation phase, we finalized our prototype and focused on developing a process to effectively and efficiently test this prototype by looking at the intersections of desirability, viability, and feasibility, coupled with a public consultation plan to help best refine our prototype.

Identifying the Problem

Calgary’s downtown is its economic and cultural heart but it is experiencing a utilization crisis that is having an overall impact on the city. As Canada’s energy capital, Calgary’s downtown — and the city by extension — has benefited from a large number of corporate offices located in Calgary’s Central Business District (CBD). In 2021, over 102 head offices called Calgary home, the highest concentration per capita in Canada (Financial Post, 2022). At present, Calgary’s downtown and the adjacent Beltline community host over 49 million square feet of office space (City of Calgary, 2022); however, Calgary’s downtown office market recorded 380,000 square feet of negative net absorption in the second quarter of 2022, increasing the overall vacancy rate to 33.7% (CBRE, 2022).

The rise and fall of office vacancy rates in Calgary’s CBD are not new; cycles of economic booms and busts have been mirrored by accompanying levels of construction and occupancy (Graham & Dutton, 2021). The most recent recession, coupled with the collapse of global oil prices that have affected one of Calgary’s core industries, has brought an unprecedented loss of jobs resulting in high office vacancies (Graham & Dutton, 2021). In addition, the rise of remote work as a necessity during the COVID-19 pandemic has shifted ‘where’ we work and further exacerbated Calgary’s office vacancy problem (Graham & Dutton, 2021).

The exceptional level of office vacancies in Calgary poses a problem, in part, because the city has traditionally relied on business tax rates that are more than three times higher, on average, than residential rates to fund its operations (Filipowicz & Lafleur, 2019). However, since 2015, about 160 office properties in the downtown core have seen their collective assessments shrink by more than two-thirds — fueled by initial vacancy rates. In 2021, these properties lost another $1.1 billion of their combined value for the new tax year (Varcoe, 2022a). The soaring commercial vacancy rates in downtown Calgary have put downward pressure on the commercial real estate market, resulting in properties having a lower assessed value and yielding less tax revenue (Filipowicz & Lafleur, 2019). This has resulted in budget challenges for the municipality.

In addition to the impact to the City’s balance sheet, the flight of workers from the CBD has impacted its vibrance. Historically, Calgary has used land use designations to separate uses, resulting in residential neighborhoods — where people live — being distinctly separated from commercial districts — where people work (Carruthers & Tretter, 2022). As a result, the public realm downtown has become as vacant as its offices, stripping Calgary’s heart of that which gives it life — its people.

How might we?…

Our design thinking process began with identifying five “‘How might we?” questions, which “…allow us to reframe our insights into opportunity areas and innovate on problems…” (Anderson, n.d.). Reframing our problem statement into a series of questions facilitated subsequent brainstorming activities, which aimed to generate answers to those questions.

Figure 1

How Might We Questions

After addressing the five questions outlined in Figure 1, we converged upon one focal question to drive our design process: How might we address the increased corporate vacancy rates in downtown Calgary to best serve our community?

Human-Centered Design

As part of a human-centered design, we wanted to see the problem through the eyes of our stakeholders. We sought to understand their experiences of living, working, and operating downtown, to gain insight into factors that may influence the attraction of, or vacancy affecting the downtown core. Through iterative brainstorming sessions the following list of key stakeholders were identified: building owners, supporting area businesses, non-governmental organizations (NGOs), the City of Calgary, and potential building tenants. Sub-groups were derived and included thereafter.

Figure 2

Key Identified Stakeholders and Stakeholder Sub-groups

Empathy mapping was utilized to dive deeper into what each stakeholder might think and feel, hear and see, say and do, and to help identify their pains and gains. The desired outcome from the empathy mapping exercise was to surface some of the core concerns and overlapping issues, which would later inform ideation and prototype development. Concerns and issues that were co-occurring among two or more stakeholders were flagged as requiring more investigation and were considered as those standing to derive the most impact and significance from our design solutions. Figure 3 below outlines the empathy mapping results, with the colours coordinating with the stakeholder groups identified in Figure 2 above.

Figure 3

Empathy Mapping for Key Stakeholder Groups

Ideation

Once the empathy mapping was concluded, we conducted a divergent brainstorming activity whereby each member of the design team identified potential solutions to the issues and concerns surfaced during the mapping exercise. Figure 4 below provides an example of this brainstorming.

Figure 4

Divergent Brainstorming Exercise Example

The divergent brainstorming exercise yielded 45 ideas, which were subsequently reviewed collaboratively and categorized by the design team into common themes. The collective ideas converged around four core themes: growing communities, growing a green economy, repurposing existing buildings, and improving the downtown environment. Following the convergent theming of ideas, we utilized a voting exercise to prioritize ideas that would be incorporated into the prototyping stage. The result showed a wide spread of votes across ideas, leading to prototype concepts that incorporate a wide variety of our ideas.

Figure 5

Convergent Theming and Prioritization Voting

Prototyping

Our prototype solutions aimed to address corporate vacancy rates in downtown Calgary and serve the Calgary community by repurposing existing, vacant office buildings. The prototypes were thus intended to design a model that utilizes existing corporate properties by redeveloping them into self-contained, yet connected, communities. These buildings would contain public community areas, indoor gardens (both community and commercial), business spaces that could be leased by local businesses, affordable residence-style housing, market-rate housing and luxury housing. This proposed model was chosen to be consistent with the City of Calgary’s Downtown Calgary Development Incentive Program, which has committed $100 million to support the repurposing of vacant downtown properties by offering grants of $75 per square foot to office building owners willing to convert their buildings into residential units (The City of Calgary, n.d). By having the City funding to help mitigate the initial risk, and hopefully prove the concept with a successful enterprise, it could pave the way for other conversions by building owners, NGOs, or other entities with an interest in addressing economic, environmental, and housing issues.

Figures 6 and 7 provide examples of individual sketches and paper snapshots of prototypes that include the plurality of ideas tailored to converting vacant office spaces into mixed uses (e.g. residential, educational, recreational, professional) that can serve the community.

Figure 6

Prototype Example #1

Figure 7

Prototype Example #2

Based on the various prototypes developed, a list of common design elements were identified for inclusion in a final prototype. These include:

• Using space for commercial indoor farming
• Creating shared (“co-work”) office spaces
• Creating formal and informal spaces for people to interact and bring the community together
• Promoting multi-purpose use to create a diversity of employment opportunities beyond office jobs
• Create spaces that enable new and different types of businesses
• Create opportunities for housing that covers the full market, from affordable to student to luxury accommodation
• Incorporate design elements to advance the green economy

Based on these themes and the prominent features of the respective prototypes, we prepared the following final prototype below:

Figure 8

Final Prototype Example

The design of this prototype converts vacant office into a complete community for people to reside in, and for existing and new businesses to thrive in. This design incorporates the following features:

• A small to mid-sized grocery store in the basement that is accessible to residents of the building as well as the neighbouring community.
• Public use services on the early floors of the building that are accessible to residents and community members, including: shops and services on the +15 level.
• “Indoor-outdoor” space where people could gather
• A daycare and after-school program to create family-focused amenities that may otherwise be lacking downtown
• Dedicated work and education spaces, such as shareable and bookable office space as well as larger rooms for seminars or lectures.
• Community arts space.
• Three floors of indoor farming, which residents and youth can participate in, as well as members of the general public.
• Community-style post-secondary student residences that include single and double occupancy rooms, as well as common rooms and kitchen spaces.
• Floors that include primarily two, three, and four bedroom apartments aimed at encouraging families to move to the core. These will include affordable housing, as well as luxury accommodations on upper floors that can offset the costs of affordable housing. Residences will be served by separate elevators, to distinguish between public and private use floors.
• Roof spaces can be repurposed into recreational areas, such as a terrace, bar, or pool.

Prototype Testing

Desirability: The proposed solution is something that people actually want and the City of Calgary is taking steps to support projects of this nature. The prototyped solution helps make downtown an occupied, vibrant, affordable place to live.

Viability: The proposed solution is sustainable over the long term. The challenge may be operational costs, will the solutions increase the rates for accommodations? How much will the full renovation cost? Is it more economically feasible to just knock down the building and build a new one with set purpose? For construction — how are the buildings are structured, and is it technically viable? Would permits allow for multi-use occupancy?

Feasibility: It is possible to implement the proposed solution. There are technologies that exist to implement this solution, and examples of multi-purpose building exist in other jurisdictions.

As the prototypes is desirable, viable, and feasible — we were able to achieve the ‘sweet spot’ of converting office buildings in to a community

Figure 10

Assessing Desirability, Feasibility, and Viability

1. What did we learn? — I think we will all agree with architect Kevin Harrison “Right now, downtown Calgary is a ghost town,”(Bozikovic, 2021). Downtown Calgary office vacancy has risen to a new record high (McLean 2022). Many businesses permanently lost the battle to survive during the pandemic when nobody was working in the towers (Aldrich, 2022). “Calgary and Alberta have the highest office vacancy rates of any major Canadian city and province”(Small, 2021). “Calgary has the lowest percentage of affordable housing in any major city in Canada,” said Jenna Dutton, a research coordinator of the urban policy platform for the School of Public Policy (Small, & MacVicar, 2021). According to the City of Calgary, office buildings have lost 13 percent of value — nearly $2.3 billion — over the past year due to higher vacancy rates and lower rents (Small, & MacVicar, 2021). Reversing Calgary’s downtown death spiral — and its future tax nightmare — will require unpopular measures (Stanley, 2021).

Figure 9

Downtown Office Vacancy Rates in Major Canadian Markets

2. What worked? — We all agreed as a group there is a need for something to be done for downtown Calgary to be more vibrant. “We are breaking down all of those previous assumptions; no one is saying anymore that Calgary will be the next Detroit,” Gondek said during a Calgary Chamber of Commerce discussion on the downtown in May. “We are going to be successful because we believe in ourselves . . . . When your government believes enough that it starts to draw private capital, then everything starts to flow.” (Aldrich, 2022).

3. What new ideas did we get? — Really did not get any original ideas, as while doing the research, we found that our ideas were already there in the newspapers : propose that downtown’s vacant towers could accommodate a 21st-century blend of urban agriculture and data centers (Bozikovic, 2021) . Self-sustaining in energy and carbon. There is an opportunity, especially considering the downtown is located in very close proximity to public transit, for affordable housing and also to mix market housing with different levels of affordable housing (Small & MacVicar, 2021).

4. What can we do better? — Making Calgary a smart, sustainable, affordable city to build communities. When people are a part of a community they feel more inclined to help that community. The solution comes in the form of adaptive reuse, which involves repurposing office space as a mixed-use building or affordable housing (Small, & MacVicar, 2021). The city plans to lean on its economic resilience and financial task forces, and the existing business-friendly and “rethink to strive” strategies to help with a post-pandemic recovery (Toy, 2021). Time for Calgary to rethink how it can move forward to an economically and socially sustainable future (Stanley, 2021).

Conclusion and Final Remarks

Calgary has the highest downtown office vacancy rate in the country, and now is the time to address this issue. Throughout this project, we discovered that the problem we have set out for ourselves is truly multifaceted. There are numerous stakeholders involved as well as many good ideas for how to address the issue of strategically repurposing vacant high rises in downtown Calgary. The city wants to change the downtown from a 9–5 happening place to a rejuvenated 24/7 happening place and has established a grant program for interested building owners. However, we do not believe that this will be achieved by simply adding more residential buildings. So, together our group tackled this issue by following the design thinking process. The design thinking process forced us to analyze the key stakeholders involved, and how they might perceive this issue. We truly believe that the final prototype which we presented here represents the best way that we can best support our community and ultimately, reflects what each stakeholder needs. By dedicating space for new business, adding community infrastructure such as a community art space and indoor park, and dedicating the top two thirds of the building to various sorts of housing, we believe that this would create a vibrant community within the building itself. If the proper infrastructure is in place, then there is no reason people won’t flock to the core to live.

As Calgarians, the future of our city’s downtown affects us all. Excitingly, there seems to be considerable enthusiasm in tackling this problem, notably by the grants the city is offering and the building proposals they have already received. But even beyond that, the University of Calgary is holding a summer camp for kids 11–16 which specifically focuses on innovating for the future of our city’s spaces. There is truly an opportunity here for the city to do something great…as long as the price tag isn’t too big.

On that note, it is possible that some of the vacant buildings cannot be repurposed economically. Significant renovations will be required, which might be more costly than simply knocking down the building and rebuilding a new high rise, specifically designed and architecturally-sound for the things it holds. But whichever the case, we are confident that our building prototype is an appropriate start to tackling Calgary’s vacant office spaces.

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