The ‘Manhattanization’ of downtown Toronto

MARCUS GEE | Monday, Apr. 11, 2011

One of the best things that has happened in Toronto of late has been the surge of office construction downtown. After more than a decade of stagnation in the wake of the 1990s recession, developers have returned to the downtown core all in a rush.

Three big new towers – Telus House, the Bay Adelaide Centre and RBC Centre – led the renaissance. At least three more big projects are rumoured to be in the works. Developers have made space for thousands more workers by renovating older buildings to create inviting “brick-and-beam” offices on the edges of the central business district. In all, says one developer, 4½- million square feet of downtown space has come to market in the past 36 months.

Telus House under construction

RBC Tower to the right and RitzCarlton centre under construction

Michael Emory, president of Allied Properties, says that the era when office developers fled to the suburbs in search of cheaper land and lower taxes is ending. Why? Because the smart, younger people that companies most want to attract and keep like to work in the central city, where they can enjoy the bright lights and avoid long commutes. “What the current generation seems to want is the opportunity to live, work and play in the inner city,” says Mr. Emory.

With thickets of new condominiums going up, and offices now coming hot on their heels, Toronto’s downtown is undergoing a kind of Manhattanization, its downtown becoming busier and livelier by the month. It is vital for the city to sustain that momentum, and a new report from the Canadian Urban Institute suggests how.

The report points out that despite all the new building in the past few years, the downtown core still has only about 20 per cent of the office capacity in greater Toronto. Because of the flight of businesses to the suburbs over the past three decades, 905 municipalities now have 66-million square feet of office space, more than Calgary and Edmonton combined. Around 325,000 people work in car-dependent suburban offices. The institute calls that “the single largest contributor to congestion on GTA highways.”

To encourage developers to build more space downtown, the institute recommends lowering the gap between commercial and residential real estate taxes. The city actually began that process five years ago – an underappreciated move by former mayor David Miller – and the institute wants it speeded up.

It also wants to see the city protect potential office sites downtown. Many of these are being snapped up by condo and hotel developers for projects such as the Shangri-La on University and the Trump tower on Bay. Over the past decade, it says, “the number of sites available for office development in the core has shrunk dramatically, in contrast to the 905 where approval time frames are quicker and where sites are available in abundance…”

The institute urges governments to cook up a plan to promote the core as an international financial centre. Though plans call for creating 40,000 new jobs in the sector, “there is no accompanying plan for where these jobs are to be housed.”

The Trump International Hotel & Tower

The report doesn’t propose to reverse history and move all suburban office jobs back to the core, but it does want to make suburban office clusters work better. To that end, it wants governments to retool their transit plans to deliver more trains to where people actually work. At present, it notes, 108-million square feet of office space is beyond the range of mass transit.

None of these useful thoughts should overshadow the good news of Toronto’s office comeback. Combined with the condo boom, the gentrification of downtown neighbourhoods and the flourishing of arts and culture, it is a remarkable story of urban revival. Planning consultant Barry Lyon has worked downtown for 30 years, “and I have never seen the confluence of positive influences that we’re seeing now. You can just feel the energy here.”


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