A report detailing concerns about the proposed "Galleria" project in Edmonton's downtown was presented to council on Tuesday morning.
The Galleria project would include performing arts venues, more space for the University of Alberta, and a new office tower, but with Edmonton's commercial vacancy rate sitting at 2% higher than a healthy average, critics are concerned that adding a new office tower could jeopardize financial support for the project.
The commercial absorption rate is about 200,000 square feet per year. That much space is currently available in the brand new EPCOR tower.
"In essence, it would take one year on existing absorption rates to lease up the EPCOR tower just the way it sits today, discounting no other leasing happening in the city." says real estate expert Chuck Clubine.
But councillor Scott McKeen isn't convinced.
"If we have higher vacancy rates, lease rates will come down." McKeen says. "We'll attract more offices downtown. That will mean more people downtown."
McKeen added that council is more concerned about the financial success of the art spaces in the Galleria projects.
"We're not buying into a project that will cost tens of millions of dollars a year to prop up. I'm not interested in that."
A spokesperson for the Galleria project tells CTV News that an office tower actually carries a minimal risk for the project, as a bank loan would not be granted to move forward with the build until a primary tenant can be secured.
With files from Sarah Richter
