State of the Downtown Annual Report 2009

STATE OF THE DOWNTOWN ANNUAL REPORT 2009

State of the Downtown Annual Report 2009

CONTENTS Executive Summary...i A History of Commitment...1 Measuring Success...2 Current Value Assessments...4 Downtown...4 Dundas Street...6 Richmond Street...7 King Street...8 Clarence Street...9 Building Permit Values...10 Street Level Vacancy...12 Residential Growth & Demographics...15 Financial Incentives...19 Façade Improvement Loan Program...21 Upgrade to Building Code Loan Program...22 Rehabilitation and Redevelopment Grant Program...23 Forgivable Façade Improvement Loan Program...24 Awning, Signage & Lighting Grant Program...25 Non Street Front Façade Improvement Loan Program...26 Forgivable Upgrade to Building Code Loan Program...27 Tax Holiday Grant Program...28 Heritage Building Assessment & Heritage Building Improvement Grant Programs...29 Office Vacancy Rates...30 New Businesses...31 Looking Forward......32 Appendices...33 State of the Downtown Annual Report 2009

State of the Downtown Annual Report 2009

Since Council s adoption of the Downtown Millennium Plan: EXECUTIVE SUMMARY the total Current Value Assessment in the Downtown has risen 22% stemming and reversing the significant declines of the 1990 s. Dundas, Clarence and King Streets are seeing an increase in total assessed value of 19%, 29% and 32% respectively. Significant assessment decreases to a limited number of large office buildings on Richmond Street has had a negative net effect on the total assessed value of the corridor. After a period of average annual declines of 1.5%, total assessed values stabilized in 2007/2008 and rose by 3% in 2009. 1,000 Downtown Building Permits having an associated construction value of $320 million have been issued. Setting the stage for renewed private sector confidence Council led by example investing approximately $100 million in major capital projects including the John Labatt Centre and the new Covent Garden Market. Since 2001 the private sector has responded in kind investing $150 million in new residential towers and a further $50 million in upgrade to the existing building stock. ground floor vacancies (as a percentage of the total length of the corridor) along Dundas, Richmond and King Streets have declined since 2006. Instances of vacancies are not evenly distributed in the Downtown with certain blocks on Richmond Street (between York and King Streets) and Dundas Street (between Talbot and Clarence Streets) having a disproportionate number of empty storefronts. population growth specific to the Downtown can now be measured and benchmarked. Between 1996 and 2006, the total population in the Downtown increased by 36.7% from 2,510 to 3,430. Dwelling counts during this period also rose by 35% from 1,575 units to 2,135 units. Of those choosing to call Downtown home the 0 19, 20 44 and 65+ age cohorts experienced the most significant increases (between 2001 and 2006) at 46%, 29% and 15% respectively. Leading socio economic indicators pertaining to income, labour force participation, and educational attainment point towards a growing affluence in the residential population of the Downtown. $2.2 million in Façade and Upgrade to Building Code Loans have leveraged $8.2 million in private sector building improvements. Residential development carried out under the Rehabilitation and Redevelopment Grant Program will ultimately equate to $38 million in additional tax revenues for the City. the City s suite of new financial incentives for the Targeted Incentive Zone along the Dundas and Richmond Street corridor has been extremely well received. In little over a year, letters of financial commitment totaling $600,000 have bee issued leveraging an additional $3.75 million in building upgrades. i State of the Downtown Annual Report 2009

State of the Downtown Annual Report 2009

A HISTORY OF COMMITMENT With the adoption of the Downtown Millennium Plan in 1998, Council embarked upon a significant campaign to revitalize Downtown London. The underlying strategy taken by Council could best be described as a three pronged approach designed to set the stage for renewed private sector confidence and investment. Strategy 1 Lead by Example: To demonstrate the City s long term commitment to the core and to show that Council has the confidence to invest in the Downtown, Council invested in a number of substantial capital projects. Representing an investment of more than $100 million, discrete initiatives included the John Labatt Centre and the Covent Garden Market. Strategy 2 Provide Investment Incentives: The second prong of the strategy was to provide direct and meaningful incentives for downtown investment. These incentives were to be equally applicable to both large and small scale projects and included the Façade Restoration Loan Program, the Upgrade to Building Code Loan Program and the Downtown Rehabilitation and Redevelopment Grant Program. Further incentives included the waiving of development charges and parking requirements for new residential development in the core. In 2008 Council adopted a second generation of incentive programs that linked the established bricks and mortar incentives to targeted ground floor uses within a Dundas and Richmond Street Targeted Incentive Zone. Strategy 3 Initiate a Main Street Program: The Main Street Program was initiated with the intent that it be the glue that binds together the pieces of downtown revitalization. Main Street works to improve the appearance of the core, provide design assistance for revitalization projects, recruit new businesses and aggressively market Downtown London. 1 State of the Downtown Annual Report 2009

MEASURING SUCCESS A decade later, how successful has Council s strategy been in fostering confidence and investment in the core? Since 2003 a series of specific indicators have been used to track the success, and continued relevancy, of Council s initiatives. These indicators include: Current Value Assessment: Revitalized commercial areas typically yield higher market (or property) values than those experiencing decline. Noting that assessment values are based on market values, assessment has been utilized as a measure to track regeneration. Building Permit Activity: Perhaps the best measure of a Downtown s promise for revitalization is to consider building investment activity. When an area is in decline, property owners tend to minimize investment when the viability of an area is questionable. This lack of investment results in a downward spiral as properties decline and deteriorate further, property owners are even more reluctant to invest. Conversely, ongoing building investment signifies a high level of private sector confidence in an area. Residential Growth: The Downtown residential population represents a captive market for core retailers, particularly for convenience goods and services. This market also has the potential to support retailers after typical business hours. As the population of the core increases, the retail composition of the district will also broaden to support higher order conveniences. 2 State of the Downtown Annual Report 2009

MEASURING SUCCESS Incentive Activity: The City s financial incentives support the maintenance, improvement, adaptive re use and long term viability of the building stock in the core. This stock is an integral feature of the Downtown and offers a unique built environment that could not be replicated outside of the core. Participation rates, and the investment activity associated with eligible projects, provide a useful measure as to the state of the Downtown and a key indicator as to the continued relevance of the specific financial incentive. Office Vacancy Rates: It has been estimated that 2/3rds of the approximately 30,000 people who work Downtown are employed in large (greater than 10,000 sq. ft.) office buildings. The importance of office workers to the sustainability of the core (particularly during business hours) can not be overstated. Downtown office vacancy rates provide a snap shot as to the general health of this particular local employment sector and, by extension, a harbinger of the maintenance, and attraction of new, businesses. Street Level Vacancy Rates: Ground floor vacancy can significantly reduce the potential appeal of the shopping environment and ultimately the drawing power of the Downtown area especially when these vacancies are concentrated in a specific district or commercial corridor. In 2006 the Downtown Strategy Study reported that the areas with the highest vacancy rates were Richmond Street (between York and King Streets) and Dundas Street (between Richmond and Clarence Streets). 3 State of the Downtown Annual Report 2009

CURRENT VALUE ASSESSMENT DOWNTOWN Downtown Prior to 2001 it was very difficult to compare assessment data from year to year. Increases in assessment within an area could relate to new construction or an appreciation in property value. Tax appeals for a large area, or class of properties, could have a significant impact on aggregated assessment value. Claw backs and caps associated with tax reform of the late 1990 s also presented an issue as did the change of property tax class that could come with changes in the use of an existing building. The Provincial Government reformed current value assessment in 1998 as the new standard for property tax assessment in Ontario. Between 1998 and 2001, a transition period to this new assessment method took place and, as a result, stable and consistent data was not available until the 2001 assessment year. Citing the major declines that occurred in the 1990 s, a major goal of the Downtown Millennium Plan was an increase in tax assessment in the core. From 2001 to 2009, current value assessment in the core grew by 22.1% from $567.6 million to $692.9 million. Downtown Current Value Assessment Between 2002 and 2009, the current value assessment in the core rose 22.1% from $567.6 million to $692.9 million. Average annual assessment growth in the Downtown as a whole during this period was 2.9%. $ (000,000s) 800 700 600 500 400 300 200 100 0 2002 2003 2004 2005 2006 2007 2008 2009 Year 4 State of the Downtown Annual Report 2009

CURRENT VALUE ASSESSMENT DOWNTOWN Between 2002 and 2007, the total current value assessment grew by an average of 3.5% per annum before declining slightly in 2008 by 0.5%. This minor decrease may be attributed to a change in the assessed value of a single major office building on Dundas Street. In 2009, total assessment in the core rose by 3.8% or $25.2 million over 2008 levels. Percent Growth 25% 20% 15% 10% 5% Downtown Current Value Assessment Percent Growth By Year 0% 2002 2003 2004 2005 2006 2007 2008 2009 Year It is important to note that the current value assessment figures utilized for the current analysis include both public and private sector properties. Public sector properties have been included to reflect the inherent value they add to the core. In 2009 current value assessment rose by 3.8% or $25.2 million over 2008 values. Percent Growth Current Value Assessment Percent Growth By Year (Downtown vs. City) Downtown 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 Year City Both the Downtown and the City as a whole have experienced tremendous growth in their current value assessment since 2002. During this time the City s Annual Average Current Value Assessment rate exceeded that of the Downtown, growing by 5.7% per annum. 5 State of the Downtown Annual Report 2009

CURRENT VALUE ASSESSMENT DUNDAS STREET Between 2002 and 2009, the total current value assessment for Dundas Street grew by 19.4% from $142.8 million to $170.5 million. The majority of properties on Dundas Street experienced positive assessment growth over the time period. Significant declines in a limited number of properties had the effect of minimizing per annum assessment growth for the corridor. Percent Growth Dundas Street Between 2002 and 2009 current value assessment on Dundas Street grew by 19.4% from $142.8 million to $170.5 million. $ (000,000s) Current Value Assessment (Dundas Street) 200 175 150 125 100 75 50 25 0 2002 2003 2004 2005 2006 2007 2008 2009 Year The period 2002 through 2005 saw an average annual increase in total assessed value of 9.3%. In 2006 assessed value on Dundas Street dropped dramatically 6.8% from 2005 levels. Further declines in assessed value were experienced in 2007 ( 0.2%) and 2008 ( 2.1%). It is important to note that the decline in total current value assessment over the period 2006 through 2008 may be principally ascribed to five properties and is therefore not an accurate portrayal of the value of Dundas Street as a whole. In 2006 for example, 92 of the 111 properties evaluated (83%) showed an increase in current value assessment. 30% 25% 20% 15% 10% 5% Current Value Assessment Percent Growth By Year (Dundas) 0% 2002 2003 2004 2005 2006 2007 2008 2009 Year 2009 witnessed a modest increase of 0.6% in total assessed value a more significant increase being offset by a marked decline in a single property. 6 State of the Downtown Annual Report 2009

CURRENT VALUE ASSESSMENT RICHMOND STREET Between 2002 and 2009, the total current value assessment for Richmond Street declined by 6.0% from $79.7 to $74.9 million. The current value assessment for the majority of properties on the corridor fluctuated very little over the 2002 2009 period. Significant assessment decreases to a limited number of buildings had a negative net effect on total assessed value. Richmond Street Between 2002 and 2009, current value assessment on Richmond Street declined by 6% from $79.7 million to $74.9 million. $ (000,000s) Current Value Assessment (Richmond Street) 90 80 70 60 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 Year The period 2002 through 2008 saw modest, average annual declines of 1.5% in current value assessment for the corridor. Close scrutiny of the assessment data for the period reveals that the number of properties whose assessed value increased or remained unchanged vastly outpaced those that declined. The period 2007 through 2008, for example, saw no fluctuation to 50 and 54 of the 56 assessed properties. Richmond Street, like Dundas Street, had a small number of buildings whose large floor area had the ability to affect the total current value assessment for the corridor. Percent Growth 0% -2% -3% -5% -6% -8% -9% Current Value Assessment Percent Growth By Year (Richmond) -11% 2002 2003 2004 2005 2006 2007 2008 2009 Year 2009 was much more volatile with 43 properties reporting an assessment increase and 12 properties reporting a decrease the net effect of which was a 3.0% increase in the total value assessment for the corridor. 7 State of the Downtown Annual Report 2009

CURRENT VALUE ASSESSMENT KING STREET Between 2002 and 2009, the total current value assessment on King Street increased by 32.8% from $32.8 million to $50.5 million. Average annual increases in assessed value reflect uniform increases along the entire King Street corridor. King Street Between 2002 and 2009, current value assessment on King Street increased by 32.8% from $38.0 million to $50.5 million. The period 2002 through 2004 saw an average annual increase in the total assessed value for the corridor of 5.5%. This trend of positive assessment growth was temporarily interrupted in 2005 when the demolition of a single property resulted in a net decrease of 4.1% in the total assessed value. Thereafter average annual assessment increases of 5.8% were recorded for the period 2006 through 2009. Assessment increases in 2006 (11.9%) and 2009 (10.0%) played a significant role in inflating the average annual increase for this period. Percent Growth $ (000,000s) 60 50 40 30 20 10 35% 30% 25% 20% 15% 10% 5% Current Value Assessment (King Street) 0 2002 2003 2004 2005 2006 2007 2008 2009 Year Current Value Assessment Percent Growth By Year (King) 0% 2002 2003 2004 2005 2006 2007 2008 2009 King Street has displayed a high Year degree of consistency in the market value. Average annual assessment increases reflect uniform performance along the entire corridor unlike Dundas and Richmond Streets where fluctuations may be attributable to a small number of sizable floor plates. 8 State of the Downtown Annual Report 2009

CURRENT VALUE ASSESSMENT CLARENCE STREET Between 2002 and 2009, the total current assessed value of Clarence Street increased by 29.3% from $4.8 million to $6.2 million. Clarence Street Between 2002 and 2009, current value assessment on Clarence Street increased by 29.3% from $4.8 million to $6.2 million. $ (000,000s) 7 6 5 4 3 2 1 Current Value Assessment (Clarence Street) 0 2002 2003 2004 2005 2006 2007 2008 2009 Year The period 2002 through 2005 saw an average annual increase in the total assessed value for the corridor of 3.9%. In 2006, market values rose dramatically by 18.8% with 16 of 18 properties reporting an assessment increase. A further increase of 2.0% in 2007 was offset by a 3.3% decrease in 2008. Value corrections during this period reflected adjustments to three properties and were not indicative of a general trend for the corridor. In contrast, 2009 was a year of volatility as 12 of the 18 properties reported an assessment increase and 6 a loss. Losses outpaced gains as total assessed value declined an additional 1.5% from 2008 levels. 35% Current Value Assessment Percent Growth By Year (Clarence) 30% Percent Growth 25% 20% 15% 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 Year 9 State of the Downtown Annual Report 2009

BUILDING PERMIT VALUES Value of Permits ($ 000,000s) Building Permit Values Building Permit Values are comprised of costs associated with structure alterations, installations and the construction of new buildings. Over the past decade approximately 1,000 Building Permits have been issued for alterations, installations or new construction in the core. Public and private sector works carried out under these permits had an associated construction value of $320 million. 120 100 80 60 40 20 Value of Building Permits in Downtown London, Unadjusted for Inflation 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year In the past ten years 1,000 Building Permits have been issued for the Downtown. Issued Permits had an associated construction value of $320 million. Between 2001 and 2006 the Median Value of Building Permits rose 176% from $12,644 to $35,000. Between 1998 and 2001 the public sector showed a significant amount of interest in the Downtown with sizable investments in projects such as the Covent Garden Market (1998) and the John Labatt Centre (2001). Works to implement the Forks of the Thames Revitalization Plan, the Victoria Park Master Plan and the new Central Library were also undertaken during this period. The completion of these projects ushered in a significant period of private sector confidence in the Downtown. Since 2001, the private sector has taken the lead in construction activity investing more that $150 million in major residential developments and a further $50 million in building upgrades. 10 State of the Downtown Annual Report 2009

BUILDING PERMIT VALUES Value of Permits ($) A review of the Median Value of Building Permits since 2001 further demonstrates growing private sector confidence in the core. Between 2002 and 2008, the Median Value of Building Permits has risen 176% from $12,644 to $35,000. 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1999 Median Value of Building Permits in Downtown London 2000 2001 2002 2003 Year 2004 2005 2006 2007 2008 Between 2001 and 2008, the Median Value of Building Permits rose 176% from $12,644 to $35,000 further demonstrating a growing private sector confidence in the core. 11 State of the Downtown Annual Report 2009

STREET LEVEL VACANCY RICHMOND / DUNDAS / KING Street Level Vacancy Street level vacancy was measured for Dundas Street (between Talbot Street and Wellington Street), Richmond Street (between York Street and Kent Street) and King Street (between Ridout Street and Clarence Street). For the purpose of this report, vacancy is defined as a current absence of a primary ground floor business activity. Vacancy has no consideration for a number of imminent tenancies such as YOU (Youth Opportunities Unlimited) on Richmond Street. The rate was calculated by measuring the length of the frontage of the vacant unit as a percentage of the total length of built form on the corridor. It must be noted that these vacancy rates depict a snap shot of the current streetscape, and do not necessarily represent an annual average. Another indicator that was measured using this process was the length of frontage that was occupied by a surface level parking lot rather than a building, park or public square. This measure highlights where there are breaks in the streetscape which is reflection of the degree to which the corridor supports a pedestrian environment. This measure also identifies where opportunities exist to intensify and create economic opportunity through redevelopment. Of the streets inventoried, Dundas Street had the highest ground floor vacancy rate (17.4%) followed by Richmond Street (14.1%) and King Street (5.2%). Ground floor vacancies have decreased for Dundas, Richmond and King Streets since 2006. Of the streets inventoried, King Street had the lowest ground floor vacancy rate with a total of 5.2% vacant frontage followed by Richmond Street (14.1%) and Dundas Street (17.4%). These levels represent a moderate decrease from 2006 when vacancy rates for King, Richmond and Dundas Streets stood at 11.6%, 12.8% and 18.2% respectively. Street Length Along Street (m) Vacancies Percentage of Street Built Form Length (m) Dundas Street 166.1 17.4% 956.5 Richmond Street 148.7 14.1% 1053.4 King Street 30.2 5.2% 577.3 Total 345.0 13.3% 2587.2 12 State of the Downtown Annual Report 2009

STREET LEVEL VACANCY RICHMOND / DUNDAS / KING As seen in the figure above (for larger version and a comparison of 2006 and 2009 vacancies, see Appendices 1 and 2), vacancies are not evenly between York and King Streets, for example, had a vacancy rate of 34.9%. Moving north on Richmond, the vacancy rate drops to 6.8% between King Street and Dundas Street and 9.8% between Dundas Street and Queens Avenue. Thereafter vacancy rates drop to 0.0% between Queens Avenue and Kent Street. Similarly, vacancy rates on Dundas Street can range from 22.6% west of Clarence Street to 9.3% to the east. After welcoming a host of new restaurants and professional services, ground floor vacancy rates on King Street, west of Richmond Street, stood at 0% in 2009. One block east the vacancy rate rose to 9.0%. Vacancy rates are not evenly distributed along the inventoried corridors. Richmond Street, between York Street and King Street, had the highest vacancy rate (34.9%) of any block in the core. Three blocks north, vacancy rates on Richmond Street drop to 0%. Dundas Vacancy (linear m) % of Street Talbot to Richmond 67.7 20.3% Richmond to Clarence 75.6 22.6% Clarence to Wellington 31.1 9.3% Richmond Vacancy (linear m) % of Street York to King 84.1 34.9% King to Dundas 16.2 6.8% Dundas to Queens 23.2 9.8% Queens to Dufferin 0 0.0% Dufferin to Kent 0 0.0% King Vacancy (linear m) % of Street Ridout to Talbot 0 0% Talbot to Richmond 30.2 9.0% Richmond to Clarence 0 0% 13 State of the Downtown Annual Report 2009

STREET LEVEL VACANCY RICHMOND / DUNDAS / KING Not only ground floor vacancies but breaks in the building fabric to provide level parking may significantly reduce the drawing power of the Downtown area especially when these gaps are concentrated in a specific district or commercial corridor. (for a larger version of map, see Appendix 3) 12.7%, or 1,281 ft., of frontage on the inventoried corridors is currently utilized for surface parking. Dundas Street has the lowest percentage of frontage allocated for surface parking (1.5%) followed by Richmond Street (5.9%) and King Street (32.2%). Surface parking has not increased on the inventoried corridors since 2006. 12.7% of the frontage on the inventoried corridors is currently utilized for surface parking. Parking Lots Net Length of Corridor Street Length Along Street (m) % of Street Length (m) Dundas 15.2 1.5% 1002.2 Richmond 65.5 5.9% 1118.9 King 309.7 32.2% 963.2 Total 390.4 12.7% 3084.3 Surface parking has not increased on the inventoried corridors since 2006. 14 State of the Downtown Annual Report 2009

RESIDENTIAL GROWTH, DEMOGRAPHICS & SOCIO ECONOMIC TRENDS Residential Growth If you build it they will come One of the fundamental elements of the Downtown Millennium Plan was to promote initiatives that would foster an economic environment conducive to the establishment and maintenance of a strong residential presence in the core. As noted previously, attracting a strong and vibrant residential market to the Downtown area is an important step towards revitalization and the establishment of a critical mass of retail space capable of fulfilling a local, and regional, function. The table below highlights a number of new residential buildings constructed in the Downtown and Central London since 1998. The table does not include new residential units that have been created through the conversion of previously vacant or underutilized 2 nd and 3 rd floor space in a number of existing structures: Year Address Units Construction $ 1998 22 Picton 140 $ 7,300,000 1999 536 Ridout 110 $ 2,291,000 1999 330 Clarence 29 $ 800,000 2001 310 Dundas 440 $ 23,992,000 2002 75 Ann 137 $ 10,000,000 2003 250 Pall Mall 80 $ 15,000,000 2004 520 Talbot 175 $ 15,000,000 2005 129 Dundas 25 $ 1,800,000 2006 544 Talbot 52 $ 5,705,000 2006 500 Ridout 200 $ 29,000,000 2006 71 King 300 $ 35,000,000 2007 435 Colborne 43 $ 5,000,000 Total 1,731 $ 150,000,000 Since 1998, 1,731 residential units have been built in the Downtown and Central London. The private sector has invested $150 million in residential projects since 1998. While these figures present an optimistic picture for the Downtown, even more significant is the confidence shown by the private sector to continue to invest in larger, more expensive, projects. The end result of this investment between 1996 and 2006, the total population in the Downtown area increased by 36.7% from 2,510 to 3,430. Dwelling counts also rose by 35.5% during this period from 1,575 to 2,135 units. 15 State of the Downtown Annual Report 2009

RESIDENTIAL GROWTH, DEMOGRAPHICS & SOCIO ECONOMIC TRENDS Since the adoption of the Millennium Plan in 1996, population in the Downtown has increased by 42.3%. The Downtown significantly outpaced population growth in Central London between 2001 and 2006. 1996 2001 2006 Total Population 2,510 2,800 3,430 Dwelling Counts 1,575 1,795 2,135 Who is living Downtown? Statistics Canada information specific to the Downtown boundaries is now available to provide a specific snap shot of who is living in the core, what they do, and what their education and income is. Perhaps the most striking trend to observe from the Census Canada data is the 23% increase in population that the Downtown experienced between the 2001 and 2006 census years. Growth in the core outpaced that of the Central London Planning District (composed of multiple planning areas including the Downtown) which recorded a growth rate of 1% during the same period. The 2006 data further reveals that, while three of four age cohorts have declined in Central London between 2001 and 2006, the Downtown has experienced growth in all four age categories most notably the 0 19 cohort (46%), the 20 44 cohort (29%) and the 65+ cohort (15%). Growth in the 45 to 64 cohort was unsurprisingly less significant at 4%. Age Cohort 1996 2001 2006 % Change 0 19 195 150 220 46% 20 44 1,445 1,575 2,035 29% 45 64 460 610 635 4% 65+ 400 460 530 15% The proportion of 20 44 year olds (58%) is much greater in the Downtown than the rest of the City (36%). 16 State of the Downtown Annual Report 2009

RESIDENTIAL GROWTH, DEMOGRAPHICS & SOCIO ECONOMIC TRENDS Between 2001 and 2006: Average Household Incomes in the Downtown rose by 16%. Median Household Incomes in the Downtown rose by 35% respectively. 71% of the Downtown population participated in the labour force. Unemployment rates in the Downtown dropped from 9 to 7% Average Household Income in the Downtown rose 16% between 2001 and 2006 from $46,000 to $54,000. Planning Area Average Household Income Percentage 2001 2006 Change City wide $57,589 $68,899 20% Central London $38,416 $44,334 16% Downtown $46,201 $53,807 16% While certainly impressive, the Median Household Income rose by 35% from $34,667 to $46,908 far exceeding the 13% increase in Central London and 16% City wide increase. Planning Area Median Household Income Percentage 2001 2006 Change City wide $46,153 $53,564 16% Central London $27,375 $31,004 13% Downtown $34,667 $46,908 35% Labour force participation and Unemployment rates were also given consideration. Planning Area Labour Force Participation Rate Percentage 2001 2006 Change City wide 68% 68% No Change Central London 71% 67% 4% Downtown 71% 71% No Change Between 2001 and 2006, 71% of Downtown residents participated in the labour force. During the same period, unemployment in the Downtown dropped by 2%. Planning Area Unemployment Rate Percentage 2001 2006 Change City wide 7.1% 6.2% 0.9% Central London 9% 9% No Change Downtown 9% 7% 2% 17 State of the Downtown Annual Report 2009

RESIDENTIAL GROWTH, DEMOGRAPHICS & SOCIO ECONOMIC TRENDS Nearly 50% of the Downtown labour force is employed in the field of business, finance and administration, and sales and service. Downtown experienced an overall increase in post secondary education levels & had higher attainment rates for most levels of education. When breaking down the occupational make up of Downtown residents, the areas of business, finance and administration as well as sales and services represent nearly half of the labour force. The natural and applied science fields and occupations in social science, education, government service and religion have experienced the greatest percentage of growth between census periods (2001 2006) and now make up a further quarter of the population. Between 2001 and 2006, the Downtown experienced an overall increase in post secondary education levels and had higher attainment rates for all levels of education (excluding Master s Degree and Doctorate then both Central London and the City as a whole). How the Downtown resident moves about during the course of the day is also interesting and speaks to the importance of a safe and effective bicycle and pedestrian transportation network. 42% of Downtown residents reported walking or cycling as the principle means of transportation to and from work compared to 8% Citywide. A further 14% cited public transit. Transportation Mode to Work 2006 Downtown (as % of PD*) 2006 Central London (as % of PD*) % City wide Carpool 6% 8% 8% Drive 38% 49% 49% Public Transit 14% 13% 9% Walk/Bike 42% 29% 8% Other <1% 1% <1% * PD Planning District 42% of Downtown residents walk or bike to work. 14% take public transit. 18 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES DOWNTOWN LOANS & GRANTS Financial Incentives Through numerous incentive programs, the City of London has encouraged the revitalization and renewal of the Downtown. These programs: Support the maintenance, improvement, beautification and viability of the historic building stock in the core area. This stock is an integral feature of the Downtown and offers a unique built environment that cannot be replicated outside of the core. This stock also plays a large role in the ongoing image of London as it relates to Londoners, prospective economic investors and tourists alike; Encourage the development of residential units in older buildings through conversion and adaptive reuse. Fire and Building Code issues, for example, are often at the forefront of projects which convert vacant or underutilized commercial space to residential tenancy; Support the development of distinctive, interesting and attractive commercial facades and spaces in the Downtown s existing buildings to assist in the regeneration of London s core; and, Assist in the solidification of the downtown assessment base. The City s programs originated with the Façade Improvement Loan Program which was adopted by Council in 1986. In 1998 Council adopted the Downtown Millennium Plan and with it two new financial incentives the Upgrade to Building Code Loan Program and the Rehabilitation and Redevelopment Grant Program. In 2005, the State of the Downtown Report clearly illustrated that the core had undergone a significant period of revitalization. Private sector investment had jumped, total assessed value had climbed, and residential development had taken off. 19 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES DOWNTOWN LOANS & GRANTS While these improvements were impressive, the report concluded that the revitalization of the main retail and service commercial spine along Dundas Street and Richmond Street remained a problem many of the buildings were in a state of significant deterioration, vacancy rates were on the rise, and marginalized uses were inhibiting the reestablishment of a strong pedestrian corridor. With this in mind, Council adopted a second generation of incentive programs for the Downtown in 2008. The new programs linked the bricks and mortar initiatives of the 1990 s to targeted uses within a targeted incentive zone the Dundas and Richmond Street corridors. These new financial incentives included: the Forgivable Façade Improvement Loan Program; the Non Street Front Façade Improvement Loan Program; the Awning, Lighting and Signage Grant Program; the Forgivable Upgrade to Building Code Loan Program; the Heritage Building Assessment/Condition Grant Program; the Heritage Building Improvement Grant Program; and, the Tax Holiday Grant Program. There are many indicators that private sector investment continues to flow into the Downtown, and is on the rise in the Targeted Incentive Zone. While it would be inappropriate to attribute this investment solely to public sector incentives, general conclusions may be drawn on the impact the Council s incentive programs have had on the core. 20 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES FAÇADE IMPROVEMENT LOAN PROGRAM Façade Improvement Loan Program The Façade Improvement Loan Program was established in 1986 to assist property owners in the Downtown Community Improvement Area with street front façade improvements. The program provides for 10 year interest free loans for ½ the value of eligible exterior improvements (to a maximum of $25,000). In those instances where the property is designated under Part IV of the Ontario Heritage Act, or the proposed rehabilitation includes improvements consistent with the City s Facility Accessibility Design Standard, the value of the loan may be increased by an additional $5,000. Since 1987, the City of London has issued more than $1 million in loans under the program (See Appendix 4). These loans have served to leverage more than $2.6 million in private sector façade improvements. Loan / Construction Value ($000s) 300 250 200 150 100 50 0 1999 Facade Improvement Loan Program Loan and Associated Construction Values 1999-2008 2000 2001 Loan Value 2002 2003 Year 2004 Construction Value 2005 2006 2007 2008 Interest in the Facade Improvement Loan Program has been fairly consistent over its lifespan with peaks in activity occurring around specific Downtown milestones such as the adoption of the Community Improvement Plan in 1995 and the Downtown Millennium Plan in 1998. The adoption of Council s new suite of initiatives would appear to be heralding in another period of increased activity. Average historical loan and construction values rose significantly in 2008 and are projected to meet or exceed previous cyclical highs in 2009 due in large part to a significant redevelopment of an assemblage of buildings on King Street. 21 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES UPGRADE TO BUILDING CODE LOAN PROGRAM Upgrade to Building Code Loan Program The Upgrade to Building Code Loan Program was established in 1995 to assist property owners in the Downtown Community Improvement Area with the funding of improvements that address the rigorous requirements of the Building and Fire Code. The Program provides for 10 year interest free loans for ½ the value of eligible interior improvements (to a maximum of $50,000). Loans under the Program may be increased by an additional $5,000 with the heritage designation of the structure or retrofits to the City s Facilities Accessible Design (FAD) standard. Since 1999, the City of London has issued more than $1.2 million in loans under the program (see Appendix 5). These loans have served to leverage more than $5.6 million in private sector building upgrade. Construction Value ($ 000s) 1,750 1,500 1,250 1,000 750 500 250 0 1999 Upgrade to Building Code Loan Program 1999-2008 Loan and Construction Values 2000 2001 Loan Value 2002 2003 2004 Construction Value 2005 2006 2007 2008 Year Like the Façade Improvement Loan Program, interest in the Upgrade to Building Code Loan Program would appear to be tied to major downtown milestones. Interest in the Program stabilized after its initial introduction but has been steadily rising since 2007. Total loan and construction values are expected to continue this upward trend in 2009 with the completion of the improvements to the Burridge Block (formerly the Wallace Building) on King Street. 22 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES REHABILITATION & REDEVELOPMENT GRANT PROGRAM Rehabilitation and Redevelopment Grant Program The Rehabilitation and Redevelopment Grant Program was adopted by Council in 1998 to provide an economic incentive for the rehabilitation of residential and commercial properties inn the core. The value of the grant is calculated based on the increase in the municipal portion of the property tax that is directly attributable to a rehabilitation or redevelopment project. Annual grants are provided to eligible property owners over a ten year period based on a declining scale. The annual grant has the effect of deferring the full amount of taxes that would otherwise be due as a result of a reassessment in a post development or redevelopment scenario. Tax Value ($ 000s) Rebate Value Property Tax Increase 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Rehabilitation and Redevelopment Grant Program (Grant Values and Tax Increases) Actual (to date) Forecasted (given projects on Record) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year The graph above highlights annual activity under the grant program. The property tax increase represents the tax increase that the City can expect to collect after the rebates are issued. Given the current projects of record, rebates are expected to peak in 2011. Every major residential development project in the core in the past ten years has participated in the program (see Appendix 6). In total these projects represent: $150 million in construction activity; 1,731 new residential units; and $26.5 million in net tax increases (after which the City would enjoy a full tax benefit of $38 million as grant periods expire). 23 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES FORGIVABLE FAÇADE IMPROVEMENT LOAN PROGRAM Forgivable Facade Improvement Loan Program The Forgivable Façade Improvement Loan Program was adopted in 2008. Tied specifically to the Targeted Incentive Zone along the Dundas and Richmond Street corridors, program mechanics reflect those of the Façade Program with two notable exceptions: one, under the program ½ the value of the annual loan repayments may be granted back if the property owner maintains a targeted or non targeted use on the ground floor; and two, the program includes a sunset clause of 2013. It is also noted that should the building become vacant during the course of the year, the value of the annual grant would be prorated to reflect active occupancy. While still in its infancy, the Program has attracted a significant amount of interest (see Appendix 7). To date, the City has or is in the process of issuing letters of financial commitment for 10 projects in the Downtown Targeted Incentive Zone including: 180 182 Dundas Street; 236 Dundas Street; 225 Dundas Street; 232 Dundas Street; 252 254 Dundas Street; 266 268 Dundas Street; 204 Dundas Street; 206 Dundas Street; 125 Dundas Street Upon the completion of these improvement projects, the City will have issued $201,000 in loans with an associated construction value in excess of $900,000. Grants associated with these projects could total $100,000 over the ten year loan repayment period. 24 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES AWNING, SIGNAGE & LIGHTING GRANT PROGRAM Awning Signage and Lighting Grant Program The Awning, Signage and Lighting Grant Program was adopted in 2008 to assist property owners in the Downtown Targeted Incentive Zone with store front improvements. Working hand in hand with the Forgivable Façade Improvement Loan Program, the Grant Program is intended to encourage street level retrofits that are conducive to the creation of a welcoming, functional pedestrian environment. Under the Program property owners may apply for a one time grant equal to half the value of the eligible works (to a maximum of $3000). To be eligible to receive a grant, the building must contain a targeted or non targeted use and the proposed improvements must be consistent with Downtown Design Study Guidelines. Participants to the program thus far would include building owners who have also applied for assistance under the Forgivable Facade Improvement Loan Program (see Appendix 8). Participating properties would include including: 180 Dundas Street; 236 Dundas Street; 204 Dundas Street; 206 Dundas Street; 266 268 Dundas Street; and, 125 Dundas Street. Upon completion of the anticipated improvements to the above noted properties the City will have issued grants in excess of $20,000 having an associated construction value of approximately $50,000. 25 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES NON STREET FRONT FAÇADE IMPROVEMENT LOAN PROGRAM The Non Street Front Facade Improvement Loan Program This Program was adopted in 2008 to assist property owners within the Targeted Incentive Zone with multiple building exposures undertake non street front façade improvements. Before the Programs adoption, financial assistance for such properties would have been limited to the Façade Improvement Loan Program. The Non Street Front Façade Improvement Loan Program provides for 10 year interest free loans for ½ the value of eligible improvements (to a maximum of $25,000). Unlike the Forgivable Façade Loan Program the incentive does not redeem a portion of the annual loan repayments. Under the Program, non street front renovations may only be eligible for funding after the street front facade has been improved or deemed unnecessary. Ground floor occupancy by a targeted or no targeted use is also required by the program. Participants to the program thus far would include property owners who have also applied for assistance under the Forgivable Façade Loan Program and the Awning, Lighting and Signage Grant Program (see Appendix 9) including: 125 Dundas Street; 204 Dundas Street; and, 206 Dundas Street. Upon the completion of the anticipated improvements to the above noted properties the City will have issued loans totalling $75,000 having an associated construction value in excess of $200,000. The program is scheduled to terminate in 2013. 26 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES FORGIVABLE UPGRADE TO BUILDING CODE LOAN PROGRAM Forgivable Upgrade to Building Code Loan Program The Forgivable Upgrade to Building Code Loan Program was adopted in 2008. Tied specifically to the Targeted Incentive Zone, program mechanics reflect those of the Upgrade to Building Code Loan Program with two notable exceptions: ½ the value of the annual loan repayments may be granted back if the owner maintains a targeted use on the ground floor; and, the program expires in 2013. It is also noted that should the building become vacant during the course of the year, the value of the annual grant would be prorated to reflect active occupancy. Like the Forgivable Façade Improvement Loan Program Forgivable Upgrade Program has attracted a significant amount of interest (see Appendix 10). To date, the City has or is in the process of issuing letters of financial commitment for 8 projects in the Downtown Targeted Incentive Zone including: 209 Dundas Street; 236 Dundas Street; 125 Dundas Street (x2); 225 227 Dundas Street; 240 Dundas Street; 204 Dundas Street; and, 206 Dundas Street. Upon the completion of these upgrade projects, the City will have issued $317,000 in loans with an associated construction value in excess of $2.6 million. Grants associated with these projects could total $158,000 over the ten year loan repayment period. $317,000 in Forgivable Upgrade Loans will serve to leverage $2.6 million in private sector building upgrades. 27 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES TAX HOLIDAY GRANT PROGRAM Tax Holiday Grant Program The Tax Holiday Grant Program was adopted in 2008. To encourage the leasing of ground floor space to a targeted use in the Targeted Incentive Zone, the City may provide a grant for a portion of the municipal property taxes paid. The value of the grant will be calculated as a percentage of the total building area actively occupied by a targeted use. The grant is provided on an annual basis (prorated if the ground floor is not occupied by a targeted use for apportion of the year) and is available until 2013. In its first year the Tax Holiday Grant Program has attracted the attention of approximately 10% of the property owners (see Appendix 11) on Dundas and Richmond Street including: 209 Dundas (retail); 258 Dundas (studio); 180 Dundas (retail); 248 Dundas (hair and beauty salon); 268 Dundas (bar/restaurant); 186 Dundas (retail); 117 Dundas (retail); 374 Richmond (restaurant); 118 Dundas (restaurant); 192 194 Dundas (bar/restaurant); 264 Dundas (retail). Grants associated with the above noted properties would equate to approximately $20,000 in 2009. 10% of property owners within the Targeted Incentive Zone have applied for a Tax Holiday Grant. Grants associated with these properties will equate to $20,000 in 2009. 28 State of the Downtown Annual Report 2009

FINANCIAL INCENTIVES HERITAGE BUILDING ASSESSMENT & HERITAGE BUILDING IMPROVEMENT GRANT Heritage Building Assessment Grant Program The Heritage Building Assessment Grant Program was adopted in 2008 to assist owners of priority 1 or 2 listed heritage structures or designated heritage buildings in the Downtown Community Improvement Area (including the Targeted Incentive Zone) with funds to undertake an expert assessment of the existing condition of a structure with respect to the conservation or restoration of the heritage resource. Under the Program 50% of the applicants professional consulting fees (to a maximum of $5,000) are eligible for funding assistance. The Downtown contains approximately 20 buildings that have been designated under Part IV of the Ontario Heritage Act. A further 160 have been identified as Priority 1 or 2 buildings in the Inventory of Heritage Resources. To date, applications have been received for 204 and 206 Dundas Street (see Appendix 12). Grants associated with these two properties would equate to $10,000. The potential of a Downtown Heritage Conservation District could have the effect of increasing participation rates under this program. Heritage Building Improvement Grant Program The Heritage Building Improvement Grant Program was adopted in 2008 to assist designated Part IV Ontario Heritage Act building owners in the Downtown Community Improvement Area with the maintenance and/or restoration of the identified heritage resource. Under the Program, 50% of eligible improvements (to a maximum of $5,000) may qualify for funding assistance. To date applications have been received for 204 and 206 Dundas Street (see Appendix 13). Grants for work undertaken for these two properties would equate to $10,000. Activity under both programs is expected to increase significantly as Council gives consideration to the establishment of a Downtown Heritage Conservation District. 29 State of the Downtown Annual Report 2009

OFFICE VACANCY RATES Office Vacancy Rates 1993 25.0% 1994 19.6% 1995 19.2% 1996 20.5% 1997 19.2% 1998 14.5% 1999 20.0% 2000 10.3% 2001 15.2% 2002 15.0% 2003 15.0% 2004 15.8% 2005 15.7% 2006 18.4% 2007 16.7% 2008 15.8% Office Vacancy Rates Office vacancy rates for Central London have been collected by CB Richard Ellis each year in an effort to track the strength of the area and the Downtown as a focal point of business for the City of London. The data expresses the square footage of vacant office space in Central London as a percentage of total office space within Central London. Vacancy Rate 30% 25% 20% 15% 10% 5% Central London Office Vacancy Rate 0% 1993 1995 1997 1999 2001 2003 2005 2007 Year Office vacancies have remained rather steady over the past 7 years. Aside from a spike in 2006 when the office vacancy rate reached 18.4%, Central London has averaged a 15.6% vacancy rate for all office space since 2001; Bell Canada s departure from their offices at 100 Dundas had a tremendous impact on office vacancy levels in 2006 and is largely responsible for the high incidence that year. Over the period of measurement, the lowest recorded vacancy rate of 10.3% occurred in 2000 just after the implementation of the Downtown Millennium Plan. In years leading up to the Downtown Millennium Plans adoption, vacancy rates typically hovered around 20%. According to CB Richard Ellis most recent Market Value report, the full impact of the economic slowdown of 2008 and 2009 has yet to be seen in Downtown London and the office market is not expected to change drastically for the remainder of the year. It is noted that recent transformation of Galleria Mall into Citi Plaza will increase the total square footage of office space in the Downtown. 30 State of the Downtown Annual Report 2009

NEW BUSINESSES New Businesses Since the inception of the Downtown Millennium Plan in 1998, there has been great effort and work put into promoting the Downtown, changing negative perceptions it may have, and improving overall quality of life for visitors and residents of the core. Main Street London has worked to maintain and attract businesses in the Downtown as a means to accomplish these goals. As an indicator of the Downtown s attractiveness and commercial appeal, Main Street has recorded the number of businesses that have opened in the Downtown each year. Since 2006, that number has held steady at an average of 11 new businesses each year. The following are lists for the new businesses in the Downtown from 2007 to 2009 grouped by the year of their opening. The lists include street front businesses and do not include new businesses that may have opened in Downtown office towers. 2007 Ian Bansie Hair Studio 484 Richmond Street Coffee Culture 519 Richmond Street The Red Goat / Cello Social Dining 99 King Street The Piping Kettle Soup Co. 130 King Street Up on Carling 153 Carling Street The Only on King 172 King Street Arcturus Reality 250 York Street CIBC 355 Wellington Street Holiday Inn Express 374 Dundas Street Business Tech Consulting 22 Covent Market Place Si Senor 394 Waterloo Street 2008 The Carling Fitness Club 153 Carling Street Lavish 238 Dundas Street Wilfin Design and Media Group 428 Richmond Street Moxies Classic Grill 441 Richmond Street Taco Del Mar 355 Wellington Street Suzy Shier 355 Wellington Street Art for AIDS 242 Dundas Street Mansion 89 King Street Ardene 355 Wellington Street Citi Cards Canada 355 Wellington Street 2009 Jambalaya 119 Dundas Street Moon Over Marin 194 Dundas Street Downtown Yoga Holistic Centre 236 Dundas Street Organic Oscars 236 Dundas Street The Job Shoppe Inc. 201 Queens Street Los Camales 346 Richmond Street Durga Imports 355 Wellington Street Cotton Ginny 355 Wellington Street Fox and Fiddle 355 Wellington Street Country Style Bistro Deli 355 Wellington Street King West Bar and Grill 93 King Street Booster Juice 355 Wellington Street 31 State of the Downtown Annual Report 2009

LOOKING FORWARD These are exciting times for the Downtown. Little more than a decade has passed since the adoption of the Downtown Millennium Plan. In that time, Council s strategy of leading by example and providing investment incentives has set the stage for renewed private sector confidence and investment. The key indicators point towards a stabilization and resurgence of the core. Current Value Assessment rates are trending towards positive growth; Building Permit and incentive activity suggests a willingness to invest in buildings long neglected; office vacancy rates are at their lowest point in 3 years; street level vacancies are down; new businesses are opening; and the creative class are choosing to call the new Downtown home in striking numbers. What s next? Wishing to capitalize on this momentum, Council recently adopted the Terms of Reference for the new Downtown Master Plan. The Plan will revisit the goals and strategies of the Downtown Millennium Plan with a mind to detailing a renewed vision of excellence and prosperity for the core. This may include new Official Plan policies and Zoning By law regulations for the core. Revised urban design guidelines will also be considered as will the establishment of a Heritage Conservation District. 32 State of the Downtown Annual Report 2009

33 State of the Downtown Annual Report 2009 APPENDIX 1

34 State of the Downtown Annual Report 2009 APPENDIX 2

Richmond, Dundas and King Street Level Surface Parking 2009 APPENDIX 3 35 State of the Downtown Annual Report 2009

36 State of the Downtown Annual Report 2009 APPENDIX 4

37 State of the Downtown Annual Report 2009 APPENDIX 5

38 State of the Downtown Annual Report 2009 APPENDIX 6