A Calgary company plans on converting an Edmonton office tower to rental apartment suites to help reduce downtown commercial space.
Harley Court, 10045 111 St., would become a mix of 177 one- and two-bedroom suites aimed primarily at students and young professionals, Randy Ferguson, chief operating officer of building owner Strategic Group, said Monday.
The $40-million renovation is intended to bring Strategic a steady stream of revenue at a time when the new Ice District towers are creating a “flight to quality” as tenants see a chance to switch to more up-to-date space, he said.
“We have this inventory which is aging and will increasingly be vacant, not because there’s anything wrong with it, but because there’s new inventory on hand.”
Although 15-storey Harley Court, built in 1977, is 86 per cent occupied, Ferguson said taking it residential would provide more secure revenue in the long run.
Experts have been predicting for several years that some Edmonton commercial towers will be converted other uses as the opening of such buildings as the Enbridge Centre and the Edmonton Tower helped push the year-end downtown office vacancy rate as high as 14 per cent in places.
Strategic is the first company to make such a plan public in the current economic cycle, although such overhauls have been done in the past.
The company hopes to start construction this fall and finish the work in about 14 months. Ferguson said they looked at making a similar change at the CN Tower, which Strategic also owns, but floors aren’t designed properly for residential.
However, the city needs to work on providing development permits and other approvals more quickly to ensure the project is practical and encourage other companies to do something similar, Ferguson said.
That’s important because the city has indicated it wants to see residential conversions, he said.
“The key to this kind of repositioning is speed … It sets a great example for other developers to come forward,” he said.
“They’re going to be very interested in the approval process. They will be very interested in our plans … We will be very transparent with them to move this forward. It creates exciting activity.”
Coun. Scott McKeen, who represents downtown, said he and the city staff have met with Ferguson to see what can be done.
He likes the proposal. Suites as small as about 500 square feet would appeal to young people who don’t need much living space and will increase downtown vibrancy, he said.
“I don’t think the community will have concerns. Parking could be an issue, but Randy said they’re (oversupplied with parking) for the building,” he said.
“The goal here is to end up with a really interesting downtown. Unlike others … Edmonton’s is going to be largely residential. The good news on that is the sidewalks don’t roll up at 5:30.”