What do you think of this project?

  • Total voters
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thommyjo said:
How would it affect financing for projects if the city developed policies that either taxed vacant storefronts or had other “sticks” to try to get developers to fill empty CRUs?

Clearly it’s not supply/demand curves working as they should because the financial industry has to keep lease rates artificially high.

Would developers build less CRUs? Have to charge higher residential rates? Simply less proposals being approved cause they can’t secure financing for too low of expected commercial lease rates?
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We seem to be locked in this holding pattern with too much vacant space downtown for several years now, we need to jump start something to get out of it.

There probably should be some city tax relief for space retail vacant, say more than a year or some other set period of time, which only applies if the space is filled.
 
Kosy123 said:
Call me crazy but 2 hour free parking might be worth a look at for both City Centre and Ice District parkades.
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The problem with parkades is that they have overhead operating costs in the evenings. Manulife makes it work on event nights for Rogers, knowing people will park there and pay, which pays for the parking attendant, which is now mandatory due to the security issues downtown. If you make it free, there are still costs associated—do you pass that onto tenants in their leases?

The other issue is that there is basically no point in coming to the mall downtown anymore for the surrounding inner communities. It is faster to drive somewhere else with amenities and not worry about your car being broken into as much as downtown, even in a parkade. It wasn't that long ago that I went downtown on a weekend to the mall to Softmoc to buy a pair of shoes that I didn't want to drive to SEC/Southgate for. That option is gone now.

The retailers making it work downtown aren't the ones that are worried about free parking - Henry Singer, Helm, and other specialty clothing. Likewise, no one is driving downtown to go to Tims or the Telus kiosk, even if there is free parking. The downfall has been gradual, but the gap is so bad now that it is a monumental task to rebuild retail to the point where it is just acceptable for the average person who wants to visit Gap, Sporting Life, Banana Republic (insert other basic national retailers here).

Is free parking enough to attract those tenants? I doubt it, to be honest. The foot traffic from office spillover was the main driver of traffic for them, and that is never coming back. Realistically, it is going to take a slow, gradual decade or two for downtown to get back to a good spot, and it is not going to look like it used to.
 
Greenspace said:
This is unfortunately not how landlords operate. They take out financing based on highest and best use of the retail space. They risk that financing by lowering lease rates. This is why space in new buildings oftens stays empty rather than lower the rate.
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A solution needs to be found because the problem is extremely prevalent. A good example is the building facing the intersection on 111th Ave and Kingsway Ave. that building was built and never had its retail bays filled, it also never had all its residential units filled. Its been standing almost empty for over 10 years and problems are beginning to show up due to the lack of maintenance performed. If those retail bays were filled, even at a rate that might be considered a loss to the owner, the businesses would care about the building and enough money would be collected to maintain it. That in turn would encourage someone to purchase a condo above. That preserves the buildings value in the long run and protects the owner's investment increasing the odds of a positive cash flow in the future.

Perhaps transferring the loan to another company that removes the condition of high lease rates is the way to go. In any case, all parties need to get involved in finding ways to minimize negative cash flow instead of completely stopping it.

That would be a good item to have on someone's platform in this election.
 
^It's not as simple as moving a loan. The loan is based on the valuation of the existing building including the lease spaces. The loan might be for that project or a future construction project. Going lower on one space affects negotiations for other spaces.

Super frustrating and many have discussed the issue but so far no easy solutions.
 
I hope their calculations are based the local Edmonton market instead of somewhere else like Toronto, or Canada as a whole.
 
itom987 said:
A solution needs to be found because the problem is extremely prevalent. A good example is the building facing the intersection on 111th Ave and Kingsway Ave. that building was built and never had its retail bays filled, it also never had all its residential units filled. Its been standing almost empty for over 10 years and problems are beginning to show up due to the lack of maintenance performed. If those retail bays were filled, even at a rate that might be considered a loss to the owner, the businesses would care about the building and enough money would be collected to maintain it. That in turn would encourage someone to purchase a condo above. That preserves the buildings value in the long run and protects the owner's investment increasing the odds of a positive cash flow in the future.

Perhaps transferring the loan to another company that removes the condition of high lease rates is the way to go. In any case, all parties need to get involved in finding ways to minimize negative cash flow instead of completely stopping it.

That would be a good item to have on someone's platform in this election.
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Its called cash flow, like many things in life say 70% or 80% of what you want is better than 100% of nothing. Cash flow is what allows you to do adequate maintenance and pay down mortgages.

I don't know what sort of fantasy world some people live in or have convinced themselves and maybe some others of, but this is a good example of how it does not really work in the end.
 
David A said:
Its called cash flow, like many things in life say 70% or 80% of what you want is better than 100% of nothing. Cash flow is what allows you to do adequate maintenance and pay down mortgages.

I don't know what sort of fantasy world some people live in or have convinced themselves and maybe some others of, but this is a good example of how it does not really work in the end.
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As ThommyJo posted above, they live/work in commercial real estate. Stop being wilfully ignorant about how financing works in commercial real estate and read up on it. Likewise, how bankruptcy for businesses is different than that of individuals if a business fails to meet the terms of its mortgage.
 
David A said:
Its called cash flow, like many things in life say 70% or 80% of what you want is better than 100% of nothing. Cash flow is what allows you to do adequate maintenance and pay down mortgages.

I don't know what sort of fantasy world some people live in or have convinced themselves and maybe some others of, but this is a good example of how it does not really work in the end.
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Cashflow to an individual person or household or small business is not the same as financing and property values for massive REITs, investment funds, banks, pensions, etc.

Please read over the links I shared.

And I don’t disagree with you….i wish it worked the way you’re describing. It would better represent basic supply/demand economics. It would bring a ton of vibrancy back to our cities…. But could also jeopardize future project financing approvals.

Which is why I wonder if a “stick”, like taxes on vacant storefronts could even help or not? But surely we need a solution…
 
Confirmed!

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I think the only banks remaining that are NOT in the ICE District are CIBC (until next year), BOM, ATB and Laurentian.
 
Main question I got is what's going to end up replacing CIBC at their old location. It's a pretty prominent corner of downtown.

I don't mind getting banks in the Ice District for now, but it's a far cry from what we were sold on years ago. No Rec Room or Cineplex but hey we got a CIBC and a Servus! But considering that these are the new and shinier buildings in downtown, I feel like this was somewhat expected.
 
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