The City of Calgary is creating a plan to support potential investors interested in redeveloping the former downtown Hudson’s Bay building, which has sat vacant since the retailer closed its stores earlier this year.

Recently the building was placed on the Endangered Places list by National Trust for Canada, which described its status as “immediate threat.”

“We know it’s currently being put up for market. One of the things we’re doing as a city is we are putting together some thinking around what could we put on the table depending on who buys it, what ideas come forward for it,” Thom Mahler, director, downtown strategy, City of Calgary, told RENX following a presentation at the Calgary Real Estate Forum Oct. 29 on the city’s incentive program for converting underutilized downtown office space.

“We’re trying to keep very open-minded, very flexible in how we might approach that. We know the building is not designated as a historic resource which gives some opportunity both to find a path to designation and preservation, but also we’ve got a little bit of room to manoeuvre on what we could do with the building.

"We’re looking to be a supportive player and looking forward to seeing who comes forward on that one.”

The former Hudson's Bay store property

Michael Kehoe, broker of record, Fairfield Commercial Real Estate, who attended the forum, said the century-old building is 10 acres over six levels of “incredible opportunity for an entrepreneurial investor/developer with a bold vision for the property and downtown Calgary.”

“Perhaps it is an Indigenous or other innovative group with an imaginative plan, the significant financial resources and the courage to undertake an impact, legacy project at the 50-yard line of the city’s downtown core. In my perfect world the building would be activated with retail, experiential dining and entertainment uses,” he said.

“Sadly, the building will continue to languish and deteriorate awaiting a saviour. This landmark, iconic and historic building could see a range of future uses that might include a large-format retailer on the value end of the retail spectrum take two or three floors, along with residential accommodation in a variety of formats on the upper levels.

"There is significant investment required in the building infrastructure, let alone to attract new capital-intensive tenants that may be prohibitive. Expect various levels of government to weigh in with incentives...”

Building could be on the market for a while

Ryan Rutherford, director of brokerage and vice-president, retail leasing/sales, Cushman & Wakefield, who moderated a discussion on the city’s retail market, wants the building repurposed.

“It’s beautiful. It’s historic. I would love for it to be a boutique hotel like the Hotel Georgia in Vancouver for example. They’re big floor plates. Ton of HVAC electrical issues I’m sure, but I would like to see it stay. It would be a shame to see it knocked down. But I think it’s going to sit for a while until someone can make sense out of it.”

The National Trust for Canada organization shines a spotlight on heritage places at risk.

“Despite its architectural merit and deep social legacy the Calgary Bay building lacks formal heritage designation, leaving it vulnerable to demolition and redevelopment,” the organization said.

Optimism for downtown retail, hospitality

Downtown retail has been challenged in recent years since the pandemic and the acceleration in vacancy in the office market. But the city’s incentive program for conversions is bringing more residents to the core, creating optimism for the retail and hospitality sectors. 

Mahler said six downtown conversions are complete - five residential projects and one hotel. The seventh will be the University of Calgary’s School of Architecture, Planning and Landscape with occupancy in the coming months. Another two under construction may be completed this year and there’s another group of projects not yet announced as funding agreements are being worked out.

In total, he said about 2.68 million square feet of office space is being converted to other uses - about 2,600 residential units. 

“I talk a lot recently about tourism. Back in 2017, tourism didn’t necessarily rank as one of the main diversifying elements. It was part of it with the convention centre but I think what we’re learning, especially when you see the hotel conversion, there is demand for that,” Mahler said.

“There’s a lot of synergy between what you need to do downtown for residential amenities and tourist amenities. And I think that’s kind of a new angle we’re really exploring and it meshes well with adapting empty spaces with different uses other than just office.”

New retail entrants considering downtown

Mahler said there’s been a transition in the types of restaurants and retail that were in the core prior to 2014, or the pandemic. Downtown retail vacancy is about 10 per cent, however there are new businesses opening. 

Rutherford said it’s still early days but conversions are making a difference. 

“I think there’s more bodies, especially on the west end, more people living there. It’s still a difficult place for a retailer to survive seven days a week, when evenings and weekends are quieter, but I think it’s definitely going in the right direction,” he said. “I would say probably in the next two or three years it will probably be an environment where retailers can thrive seven days a week.”

Rutherford expects more restaurants and service uses coming to the downtown.

“There’s tenants like Staples who are thinking of maybe relocating downtown. The issue with downtown, though, is that the spaces are older. They’re built. They’re really not configured for a lot of retailers. So that’s a challenge. But I think we’re going to see more entrants,” he said.

Kehoe said the repurposing of several downtown Calgary office buildings into residential, hotel and educational uses will boost the retail and hospitality sectors. 

“The 1,300 students from the University of Calgary School of Architecture, Planning and Landscape will drive new commercial uses in the west end of the downtown core,” he said. “The old saying ‘retail always follows the rooftops’ is still valid and in downtown Calgary the stores, restaurants and bars will follow the new doors created by these conversion projects.”