Saskatoon is the envy of many other cities. As a result of our city administration’s proper long term planning and successful execution of those plans, we have a vibrant and healthy core area.
There are many times I’ve had to circle the block during the week, in the middle of the evening, in the dead of winter looking for a parking spot. It’s somewhat understandable that there is a desire to entrench that success. In an earlier post, Saskatoon approves Growth Plan to Half a Million, we explored the city’s goal for the next 30 years.
Here we’ll explore the administration’s proposed office bylaw that would restrict suburban office development to under 21,000 square feet.
Concerns
We understand the objective is for the downtown core to remain the focal point of the city. Regina implemented a similar bylaw a number of years ago. From what I can see, it has not resulted in positive change.
A colleague of mine received a call from a large prospective office tenant seeking information about Saskatoon office zoning. This prospective tenant stated they would not consider Regina for their office relocation due specifically to the bylaw which prohibited them from building a suburban office.
Many companies cannot operate downtown because of the limited parking. Typically office users are limited to a parking ratio of one to two stalls per 1,000 square feet. When you consider additional operating costs, net rent and parking costs, we estimate a downtown office user will pay on average $10 per square foot more. For a 20,000 square foot user this would result in an additional $200,000 per year or $2,000,000 over the period of a ten year lease.
Potential Solutions
Rather than imposing development restrictions, ICR recommends that the City consider incentives which will attract office, residential and retail users to our city centre. Potential incentives include:
- Consider extending the existing five year property tax abatements on parkades to 10 to 15 years provided the developer begins construction on the structure within three years.
- Engage the Chamber of Commerce to lobby the provincial government to reduce corporate taxes for companies relocating their head office to Saskatchewan.
- Apply SREDA’s five year property tax abatement which is currently offered to industrial users who employ “x” number of employees. An office tenant could save $3 to $4 per square foot in operating costs.
- Increasing the core area amenities will attract more downtown residential demand. The city currently offers an attractive land lease option to industrial land users who build for their own use. This could be offered to a grocery merchant who constructs a store in the core area. Constructing a new arena in our city centre would greatly enhance the appeal of living downtown.
We’d like to hear from you. What other ideas do you have that would offer developers and office users a “carrot rather than a stick?”
Posted by Barry Stuart
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