Downtown Strategies Must Include Energy Efficiency

By: Jessica Lajoie and Stefanie Drozda, Program Specialists at Alberta Ecotrust

Calgary’s downtown has been the focus of a lot of attention over the past few years and not for positive reasons. The combination of the economic recession and pandemic resulted in a hollowing out of the rental market for office rental space downtown, thus dramatically impacting the stable tax base the downtown has provided to the city for so long. The City of Calgary has initiated many programs and projects to improve the downtown, but the biggest and most recent is the Greater Downtown Plan, which comes with a $200 million initial investment and has a long term view.

Of the $200 million initial investment, The City has earmarked $45 million for “financial incentives for office conversion, office replacement and new residential development”, which aims to address the oversupply of traditional office space. The City has already designated 28 buildings as candidates for conversion or adaptive reuse, and recognizes these projects as complex and expensive. Additionally, one of the stretch climate actions listed in the Plan is “to transition to net-zero, disaster-resilient buildings and infrastructure”, but The City has not designated funds specifically for this. 

To their credit, The City is moving quickly and has developed Terms of Reference for buildings participating in the conversion program, starting with Phase 1 this year. Project applicants will need to provide evidence of project financing to be eligible for the grant of $75 / square foot to a maximum of $10M per building. We believe the efforts to convert buildings should be considered in concert with improving environmental performance, however we recognize this can greatly increase the complexity and cost. Given this reality, the level of investment needed for conversion needs to be many times greater to make a tangible difference in downtown Calgary. As well, most downtown buildings will not be undergoing a conversion but would still greatly benefit from programs and funding to perform energy efficiency upgrades.

In Edmonton, a similar approach is being pursued through the Downtown Vibrancy Strategy, a call to action to support recovery from pandemic-induced challenges. The City of Edmonton has identified a variety of actions and the partners necessary to realize the strategy goals over the next two years, with a total implementation cost ranging from $7 million to over $28 million. Among the many activities identified, two relating directly to buildings are exploring a housing grant incentive that could include office retrofits and expanding existing green building incentives to include retrofits and conversions. These activities are earmarked under a larger action targeted at making it easier to live downtown, with an expected resource requirement of over $1 million. 

In order to realize the scale of change needed, massive private sector investment in large scale commercial building retrofits will be necessary, as identified in the Implementation section of Calgary’s plan, although no cost estimate is provided. Funding models which leverage private investment are starting to gain traction in other Canadian jurisdictions, but haven’t yet taken off in Alberta. The success of the Greater Downtown Plan in meeting its stated climate actions hinges on motivating investment into downtown commercial buildings.

At Alberta Ecotrust we are endeavouring to catalyze this investment with our Accelerating Retrofits in Commercial Buildings initiative. With support from the RBC Foundation, Alberta Ecotrust has partnered with software provider, Audette, to pilot a project that utilizes a digitized approach to retrofit opportunity analysis in commercial buildings in Calgary and Edmonton to rapidly collect and present information, identify large scale energy efficiency improvements, and aggregate those opportunities to catalyze investment. Our intention is to demonstrate the effectiveness of a smart technology approach to accelerate the process of identifying projects, reducing the barriers for building owners to create low-carbon plans for building retrofits and access financing opportunities to move their plans to reality. If successful, we could replicate this model for many of the large-scale retrofits on the horizon, leveraging private and public investment to help realize both vibrancy and climate goals for our downtowns. 

Learn more about our Accelerating Retrofits in Commercial Building initiative by downloading our one page backgrounder and invitation.

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