PRINT THIS STORY:

CHANGE TEXT SIZE:

CANADA’S CITIES, DEVELOPERS UNITE TO FIGHT BLIGHT

By Susan Thorne

Calgary and local merchants shared the cost of fixing up Stephen Avenue Walk.

There’s a reason that public-private urban revitalization partnerships in Canada are neither as common nor as complex as those in the United States: Few Canadian cities have needed revitalizing. But that could be changing.

Although government data show that 78 percent of Canadians live in urban areas, only three cities (Montréal, Toronto, Vancouver) have populations over 2 million, and many urban concentrations are relatively new — Calgary and Edmonton, for example, are creations of the 20th century. Canada’s downtowns have generally been less troubled by crime and ethnic unrest than their U.S. counterparts and have largely avoided the changing urban demographics that blighted some U.S. inner cities.

“We didn’t have urban flight in the ’60s, so we didn’t get the economic disparities of many U.S. cities, particularly in the rust belt,” said Gordon Harris, principal at Harris Consulting, an urban planning consulting practice in Vancouver, British Columbia. Harris credits good urban planning for the well-balanced evolution of Canada’s cities.

“The urban growth that occurred here was incremental,” he said, “so we have livable downtowns with good public transportation, public services and healthy downtown populations, like central Vancouver’s 78,000 residents.” Vancouver’s “living first” strategy gives residential development priority in the downtown and favors streetfront retail on designated main streets.

Nevertheless, some of Canada’s urban areas have needed renewal and reinvestment in recent years. Toronto and Montréal both found themselves with seriously degraded primary shopping thoroughfares in the early 1990s, for instance. Montréal’s Ste. Catherine Street was suffering from vacancy rates as high as 25 percent along the three kilometers (1.86 miles) east of Atwater Street, and streetfront premises were increasingly being occupied by peep shows and the like. Toronto’s Yonge Street had acquired a similar air of down-market sleaze, despite such prestigious occupants as the Eaton Centre.

“The street was depressed, with high rents for crap properties,” said Toronto City Councillor Kyle Rae, one of the leading exponents of renewal at City Hall.

Developers and concerned business people in both cities rallied to upgrade their core areas. In Montréal change was jump-started by Destination Centre-Ville, a downtown merchants’ association, and by C$15 million ($9.6 million) in municipal infrastructure and streetscape enhancements along Ste. Catherine, begun in 1995. The city also extended C$4 million in facade improvement assistance to landlords. The tide began to turn with significant renovations of the former Simpsons department store (now La Maison Simons) and the Montréal Forum sportsplex, which was converted to a 30-plex cinema. Ivanhoe’s Place Montréal Trust opened in 1999, and Ivanhoe Cambridge has added a crowning touch with the C$10 million restoration of the former Eaton’s store at the east end of the retail area, where an upmarket Les Ailes de la Mode fashion department store opened in August. Such retailers as Gap, Mexx, Tristan & America and Zara compete for shoppers’ attention today with their flagship stores along Ste. Catherine.

The city of Toronto’s main contribution to Yonge Street’s rejuvenation is Dundas Square, an open public park at a key intersection, which opened at the end of the summer. Besides authorizing C$14.4 million for the square, the city carried out expropriation and site assembly and gave C$100,000 in matching funds to the Yonge Street Business and Residents Association, a nonprofit community organization spearheading the redevelopment. City heritage renewal funds also provided up to C$20,000 per store for facade improvements.

The new face of Yonge Street, positioned as an urban entertainment district, has produced a flow of new retailers and the departure of undesirable ones. A Stitches flagship apparel store is one of the most recent arrivals. The Eaton Centre has responded by adding more street entrances and redesigning some shops to open onto Yonge Street. Work will begin soon on Metropolis, a privately developed, 320,000-square-foot cinema and entertainment complex.

These case histories are similar to the success stories of municipal alliances in the United States, but there’s one major difference: Compared with the United States, Canada offers little public sector support for urban renewal beyond the municipal level. Canada lacks the kind of loans, flexible financing and state and federal government grants that underpin many U.S. urban renewal projects. Such measures as tax increment financing, diversion of gasoline and sales tax revenues, and federal infrastructure or brownfield property grants are generally unavailable. This dearth of funding tools (surprising, given Canada’s tradition of social programs) results partly from the strong constitutional powers of the provinces, which tend to keep the federal government at arm’s length from their municipalities. Though federal funds exist for heritage and infrastructure assistance, for example, they tend not to go toward urban projects.

Consequently, sizable downtown redevelopment is difficult for municipalities; many, particularly in Ontario, have seen their budgets eroded by provincial governments in the past decade.

“The federal and provincial governments have hobbled the ability of municipal governments to fund improvement projects,” Rae said. “We just don’t have the tax leverage that U.S. cities have.”

The crucial missing ingredient is tax increment financing, which lets municipalities raise money for public projects on the basis of an anticipated increase in future tax revenue, said Ronald Soskolne, principal at Toronto development consulting firm Soskolne Associates and an adviser to the Yonge Street Business and Residents Association. Such a strategy is not legally permitted in Canada at present.

Because everything turns on municipal cooperation, urban renewal projects are vulnerable to shifting politics at city hall. Following Toronto’s amalgamation with its surrounding communities in the late 1990s, for instance, the City Council jumped from 17 to 45 members. The suburban representatives who now make up a majority have little interest in the problems of the downtown core.

“We would not be able to do the Yonge Street regeneration today,” Rae said.

Soskolne warns that Canada’s major cities could soon have urban problems similar to those experienced by their U.S. counterparts. As Toronto’s suburbs continue to expand, its downtown is becoming socially polarized, he said. “We’re actually Los Angeles in the making.”

Despite such predictions, other cities are making strides with the means available. Calgary has rejuvenated Stephen Avenue Walk, a central downtown street with two blocks of century-old buildings containing new restaurants and retailers. The province and city together provided half the facade restoration and renovation costs for properties on the Walk. And the city is sharing half the street maintenance costs with merchants, “so it’s a partnership not only in capital but also in operating costs,” said Richard White, executive director of the Downtown Calgary Association.

Some smaller cities are also using their public powers to foster private development. Cambridge, Ontario (population 112,000), for example, is attracting new retailers downtown because of a new university facility to open in a converted industrial building in 2003 — a project that received federal and provincial funds.

Most encouraging to public assistance proponents is the adoption of some U.S. tactics and strategies to facilitate redevelopment. In Winnipeg (population 1.2 million), the CentreVenture Development Corp. works to foster small to medium-size downtown businesses on a model borrowed from such U.S. entities as Minneapolis-St. Paul’s Lower Town initiative, a long-standing city-supported development agency. A nonprofit organization operating in partnership with but independently of the city, CentreVenture has gotten legislation passed allowing it to use economic initiatives and tax credits to support retail and other development projects. Over the next 10 years, CentreVenture expects to generate C$15 million in public support for developments that will involve C$90 million in private investment. The venture is getting a lot of attention in Canada.

“Canada’s different,” said Annitta Stenning, CentreVenture’s president and CEO. “We look to the U.S., but have created our own homegrown version of U.S. funding practices to fit our culture and our government structures.”

© 2010 ICSC. All rights reserved. | Terms and Conditions | Privacy Policy | Contact ICSC | ICSC Home |