Post COVID: The Future of Downtown

October 20, 2020

The Empire Club of Canada Presents

Post COVID: The Future of Downtown

Chairman: Kelly Jackson, 1st Vice-President, Empire Club of Canada

Moderator
Mary Rowe, President & Chief Executive Officer, Canadian Urban Institute

Distinguished Guest Speakers
Mark Garner, Chief Operating Officer, Downtown Yonge Business Improvement Area
William Logar, Executive Vice-President, Asset Management, KingSett Capital
Mike Yorke, President, Carpenters' District Council of Ontario
Phil Gillies, Executive Director, Ontario Construction Consortium

Introduction
It is a great honour for me to be here at the Empire Club of Canada today, which is arguably the most famous and historically relevant speaker’s podium to have ever existed in Canada. It has offered its podium to such international luminaries as Winston Churchill, Ronald Reagan, Audrey Hepburn, the Dalai Lama, Indira Gandhi, and closer to home, from Pierre Trudeau to Justin Trudeau; literally generations of our great nation's leaders, alongside with those of the world's top international diplomats, heads of state, and business and thought leaders.

It is a real honour and distinct privilege to be invited to speak to the Empire Club of Canada, which has been welcoming international diplomats, leaders in business, and in science, and in politics. When they stand at that podium, they speak not only to the entire country, but they can speak to the entire world.

Welcome Address by Kelly Jackson, 1st Vice-President, Empire Club of Canada
Good afternoon, fellow directors, past presidents, members, and guests. Welcome to the 117th season of the Empire Club of Canada. My name is Kelly Jackson. I am the first Vice-President of the club, and your host for today's virtual event, "Post-COVID: The Future of Downtown," featuring Mark Garner, Bill Logar, Mike York, and our moderator, Mary Rowe. I now call this meeting to order.

Before we begin today, I have a few items to highlight for you. If you are finding your internet feed is slow, please see below and click the "Switch Streams" button. There is also a "Request for Help" button available to you if you are experiencing technical difficulties.

I want to take this opportunity to thank our Event Sponsor for the day. Without the support of our sponsors, we can't have these critical conversations, and be able to bring them to you. The Ontario Construction Consortium is today's Event Sponsor. I also wanted this time to thank our Season Sponsors, the Canadian Bankers Association and Waste Connections Canada. Thanks also to our Event Partner, Van Valkenberg Communications, and livemeeting.ca, Canada's online event space, for their webcasting of today's event.

COVID-19 has impacted every facet of our lives. And its impact on our connections to spaces has been significant. As equally important as the spaces to which we have largely been restricted to spending our time, are those spaces where we would normally congregate. The space is filled with people, food, business, art, professional sports, or downtowns. In the spring, cities across the country saw offices and businesses shut down. Organizations shifted to operations with employees working from home. Half a year later, some downtown businesses have closed permanently. And others continue to own or rent spaces that are sitting empty or half-filled, with many employees still in remote working arrangements.

Walking through an office building, or even a business district, can be a bit of an eerie experience, depending on where you are in Canada. The absence of people working, meeting, socializing, it's impacting the retail, the restaurant, and the cultural sectors, to name just a few. Business owners, employees, elected officials, all of us are trying to understand what is the future going to look like? To what extent is traditional office space required anymore? How much commercial space will be vacant? And will rental costs remain high? Will people have relocated out of the core to the exurbs, and the suburbs? Will our cities return to their famous, vibrant states? These are the questions facing our panel of experts today, and it is my pleasure to introduce them.

First, we have Mark Garner, Chief Operating Officer, Downtown Yonge Business Improvement Area. Mark has been a successful business and community leader for more than 30 years and is now focusing his expertise and vision on the transformation of one of Toronto's most vital tourism and business hubs. Next, we have Bill Logar, Executive Vice-President, Asset Management, KingSett Capital. Bill is responsible for the operations execution and value optimization of Kingston's real estate portfolio. Bill joined KingSett in 2005 and has had responsibility for successfully overseeing property management, capital execution, and leasing across all asset classes. Third, Mike York, President for the Carpenters' District Council of Ontario. Mike has over 25 years of experience in Ontario's unionized construction industry, and is involved in numerous political, community, and training initiatives. Mike is a strong supporter of community outreach to youth at risk, training programs, working with the City of Toronto Community Housing Corporation. And our moderator, Mary Rowe, President and Chief Executive Officer of the Canadian Urban Institute. Mary is a leading urban advocate and civil society leader, who has worked in cities across Canada and the United States. Mary has been a frequent contributor to national and international city-building programs, including Human Habitat and the World Urban Forum.

I want to remind everyone in the meeting today that it is an interactive event. We encourage you to take advantage of the question box to the right of your screen and let us know what's on your mind. What questions do you have for our panellists, and I know they will do their best to try to answer as many of them as they can. With that said, I would like to turn the meeting over to Mary, who is going to kick it off with a land acknowledgement. Mary?

Opening Remarks by Mary Rowe, President & CEO, The Canadian Urban Institute
Sorry, hopefully that's the only time that the moderator's muted. Kelly, nice to see you again. Thanks for having us, and thanks to the Empire Club for putting us together. We're originating this broadcast from Toronto, which is the Traditional Territory of the Mississaugas of the Credit, the Anishinaabeg, the Chippewa, and the Haudenosaunee, and the Wendat Peoples, and its home to many diverse First Nations across Turtle Island. We also have treaties that we signed here: Williams Treaty signed with multiple Anishinaabeg Nations, and the Treaty 13, which was signed with Mississaugas of the Credit.

At CUI, we've been, the Canadian Urban Institute's in the connective tissue business, and we have been reckoning with the extent in which urbanism has continued to reinforce systemic racism and exclusion. And when we do those land acknowledgments, we're trying to find ways to actually have a different kind of conversation and change the way we do things, in terms of how cities are being created, you know, that cities work when they're created for everybody by everybody. And that's not been the past practice, I would say, and lamentably, this panel isn't going to do much to reassure people, because I'm here in the company of other Caucasians, who also happen to be male. So, we're, right off the bat, gents, reinforcing some of the stereotypes that we are trying to actually dismantle. And they're not just stereotypes; they're the reality, right, of how decision-making has been made. And so, I'm going to be interested to hear from each of you, how are you coming to terms with that? Because we've, COVID is one crisis. And as I said ages ago, at the beginning of the pandemic, that it was a particle accelerator for a whole bunch of pre-existing conditions. And one of them is the inequitable way in which resources are distributed, and the ways in which communities of Colour and vulnerable populations have, have not been provided with opportunities, and just have, we just have managed to structurally continue to exclude folks.

So, I need to hear from you folks about that, as you answer your questions. And I just want to acknowledge off the top—because I'm quite sure in the chat we're going to hear quite a lot about this. I said at the intro that I was trying to think the last time I was on a session with, with of the composition of this, shall we say. So, we just have to struggle with this collectively together, okay? And I need to hear from you how you're dealing with that in your memberships. Because I know that, you know, Toronto is one of the most diverse cities in the world. And we, and, and yet in decision-making roles, we don't always find ways to make sure that that we're representing, and also that we're sharing power. So, I want to hear from you folks who steward important constituencies, if you could answer those questions in the context of telling us what's going on.

At the CUI, we initiated something called Bring Back Main Street, because we were concerned about local businesses, and we're concerned about local communities. And we had a sense that, as the pandemic started to roll on, that those were going to be the hardest hit. But we realized that the other side of the coin is what's happening downtown. And, you know, downtown—Mark will talk to us about this—downtown has main streets too. And in fact, we're so concerned about downtowns, because we see it across the country, that we're starting a parallel campaign called Restore the Core. And I'm really happy to be on here with you folks. Because I think it has to be "both and." And we've got—and it's a profound conversation that I want us to engage in about what you understand to be the current challenge in the core. And then what do we anticipate need to be some of the measures that need to be taken to restore the core, in whatever it's going to become. So I'm going to start with you, Mark, if we could. And just we're working with you, and with business improvement areas, and business improvement districts and zones across the country. And I'm wondering if you can just give listeners a picture of what you're seeing along Yonge Street, and along the geographical boundaries that you're responsible for with Downtown Yonge BIA.

Mark Garner, Chief Operating Officer, Downtown Yonge Business Improvement Area
Thanks, Mary. I think it's a very important question. And I think from, basically, March of this year, we saw a profound change, not only in just a downtown core, but as Mary asked, in our neighbourhood specifically. You know, we're Canada's iconic Main Street. We are the heart of Toronto. Our neighbourhood normally sees around 42 million people walk north and south on Yonge Street on an annual basis. And then when COVID hit in March, we started to see the downturn of that pedestrian traffic. And basically, you know, I think April was our worst year-over-year month average. We saw probably a reduction of 85 percent of what we would normally see. We would see around 4 million people in the month of April on Yonge Street alone, and it dropped to 650,000. So, all of a sudden, it became very apparent that it's no longer about feet; it was about eyes and fingers. People were still making economic decisions, but they were making them at home. And it became very apparent very quickly that, as a retail entity, you know, our neighbourhood is lucky that we have a live-work-play-learn-shop neighbourhood, a very inclusive neighbourhood. But people were making decisions with their fingers now. So, economics were still occurring, but they were happening in their homes, in their home offices.

So, with that pedestrian traffic, it became very apparent that some of our members were not digitally savvy, they didn't have an online presence. And we had to pivot very quickly, and showcase our memberships that were online, because online ordering for products and goods became very apparent. And I think one of the big lessons in that first transition for us is the need for warehousing. For people that were shopping online, they were coming from regional centers across Canada and into the United States. If you wanted to order specific soaps or products, you may be pulling from a facility out of Skokie, Illinois, as an example, versus you're still pulling from your local retailer or you're pulling from your mall. That became very apparent that warehousing was a potential new strategy for us, and we found ways to be able to pivot the organization and connect the community in a different way.

Mary Rowe
So, do you mean warehousing, meaning I might still shop from that shop on Yonge Street, but I'm going to do it online, I'm not going to show up? And then you're saying that that posed a challenge for them about where would their inventory be?

Mark Garner
Yeah, I thought during this entire COVID-19 shutdown, I quote Lululemon. Lululemon did a great job in the Eaton Centre, as an example, because when you ordered product from Lululemon, it came from the Eaton Centre, based on your geographic location. So, they leveraged their retail locations as a, as a warehousing, versus coming from a main facility in Vancouver or somewhere overseas. And that what that allowed is to keep economics of their employees still there. So, they may not have had, you know, 20 employees at the store. They may have gone down to a core staff of five. But the products you were getting was from your neighbourhood still. So, they could guarantee the quality as well as, you know, potential risk mitigation, risk that you have on product that are coming in from far away that you have no control over.

Mary Rowe
So, they actually converted their store from space into storage?

Mark Garner
No, it wasn't storage. The store is still in the same shape. But when I geographically ordered from my place in St. Lawrence, I knew that product was coming from that store location.

Mary Rowe
Okay. M'hm (affirmative).

Mark Garner
So, they just, somebody went around, like a concierge service, and pulled product for you, and then shipped it or mailed it. The thing that would have been good during that time, if we had—other than using, you know, shipping and deliveries, is then to be able to accommodate pickups, which I think we have all done now with CurbTO, and some of the other things that we had to do for our retailers, is to provide space so people could go and pick up products.

Mary Rowe
Yeah, as you say, kind of digital concierge shopping, without actually going to an Amazon, where there's just a massive logistics center somewhere else. Mark, in terms of Yonge Street itself, and the numbers of people, feet—smart, which you're suggesting you went from feet to fingers—what would the break be, typically, between the numbers of people on Yonge Street that are local Torontonians shopping, and tourists?

Mark Garner
No, I think that's a good question. And I think this feeds to a conversation, Mary, that we've been having a lot with your organization is around the need for data. Data is going to provide the empirical evidence that we need to make very informed decisions. One of the things that we're working now with— and I think our pivot as our organization, we are focusing on data, data, data. We will work with Environics, as an example, to understand where people are coming from. Because it became very apparent with the lockdown and the importance of our employment cluster that work, that live-work component, the work component left, as well as the tourist component, the play component left. So, we have to rely differently on the local neighbourhood economics like we've never done before. Because we see that, you know, based on the foot traffic being down, how do we keep those eyes and fingers still purchasing from our neighbourhood?

So, I, I think there's, you know—and I think Mary, I've mentioned, maybe, before is, is an example, our TTC volume for us. We're, you know, we managed 33% of the overall TTC traffic on the Yonge Line between our College, Dundas, and Queen Station, and it is down over 75 percent, right? I like to even mention just the economics of, as a good example, Ryerson University. That population, just daytime population, is around 29,000 students in our neighbourhood. These numbers are staggering. But what it generates, you know, about 18 million dollars per semester. And if I only get 30% of those students back, then all of a sudden the economics of the neighbourhood drops to 5.4 million from 18 million. So, how do we support those economics? And I think that's a bit of the transition we're going through now, is to understand the importance of data, and getting to those data points that you're mentioning is, how do we know who's in the neighbourhood, where are they coming from, how long do they linger, and then how are we going to market and generate the local economics?

Mary Rowe
M'hm (affirmative). So, I guess the answer there is that we actually don't know the numbers of people that were on Yonge Street that were from Toronto, or that were from somewhere else, or that were from the offices, or that had come from, you know, from Lawrence West, or come from Listowel, Ontario. We don't actually know what we need to know, right?

Mark Garner
No, and then I think that's it. I know our daytime, our lived experience within a 10-minute walk of Yonge and Dundas is around 175,000 people live within that neighbourhood. And then knowing that our daytime population swells to about 580,000 to 600,000, you know, that's significant, we know, that, that employment cluster. But that's also a combination of tourism and otherwise. So, that's the data we need to get. And I, I think that data we're peeling back on now and getting those types of numbers that we can look at a baseline prior to COVID and then where we're at today.

Mary Rowe
Yeah, I mean, we appreciate [indiscernible]'s contribution to this, working with Bring Back Main Street, as, you know. And next week. They're coming on a city talk to talk about—I mean, I know everyone's resistant to allowing their locational data to be shared. But there are opportunities for us to actually learn as we where people are going. Bill let's talk about you. You're a steward of an enormous amount of commercial office space across the country, and particularly in Toronto, and we'd like to—if you can give us the give us the goods. I, I'm just, I should have had one of those warning notices before this broadcast began, you know, "the material content of this program could be highly depressing." But I promise you that we're going to start moving to solutions, once we just lay the ground, and people understand just how significant the challenge is. So, Bill, talk to us a bit about KingSett's experience in commercial real estate, and what you're actually seeing. Could you?

Bill Logar, Executive Vice President, Asset Management, KingSett Capital
Sure, you know, some of the things Mark touched on, in the sense that, you know, we went from March, where we had record occupancy levels in the office buildings in the core. We were, you know, 1.6% of direct space, you know, that was vacant. So, you know, levels that, you know, were fantastic from a, you know, financial perspective. But really, it wasn't a balanced market. And so, and then we had COVID hit, and we went from buildings that had, you know, six, seven, eight thousand people a day in them to, you know, maybe four, three, four hundred, or none, depending on the building. And so, you know, the big focus, I think, across the commercial real estate industry has been how do we prepare the buildings, make them safe, put them in a position to welcome people back, you know, when those times would be?

And the misnomer, I think, in many cases, has been many of these buildings have never closed. You know, people have been coming in and out of office buildings throughout COVID. The buildings that businesses shut down, you know, people didn't come in, but the buildings were open. And kudos to all the teams that were out there operating those buildings, you know. And so, getting those ready to have people coming back and, and encouraging people, and getting through what I'll call some of the, you know, some of the misnomers that are out there, you know, in the sense that, you know, you're going to come back to the office today and you're going to wait three hours in a line to get up an elevator. Well, I've been, I've been back to the office, you know, since August, and I haven't waited for an elevator once, you know. The fact that no one's going to come to the, you know, no one's coming back to the office until next year—well, every time I get on the elevator, I run into someone who says, 'Oh yeah, my group's coming back.'

And so, you know, if you look at, you know, the general market, people will say today, you know, in Toronto, as maybe are many cores ,is 15 to 20 percent of office occupancy of people actually in the buildings. But that's, that's in my view a very broad generalization. It depends on what the tenant is, what the business is, because we have tenants that are in a hundred percent, and others that are in lower. And, you know, the broad generalizations of, you know, office is dead and people are going to work home from ever forever— you know, I asked a question this week to say, instead of work from home, what if I said live in my office? Because that's what many people are doing.

And so, you know, the, what we're seeing, and the comments that we're getting back from people is, you know, as an employee, I want to get back to my office, because I miss the people I work with. And yeah, I'm concerned, how do I get public transit, how do I get into the office now. But once people are coming to the office and realize the environments their employers have tried to create to make it as safe as possible for them, they're like, 'Hey, this is not so bad.' And, you know, so getting over some of those elements of what's been out there is what we've been focused on, is making the building safe, getting people back, talking to all our tendencies in terms of what their plans are, and working with them to make successful plans for a return of the office.

And, you know, we're not naive enough to think that things will change. COVID has changed things. And, you know, every, cores have gone through pandemics and different, you know, economic circumstances, you know, many times. But at some point, COVID will end, people will come back. And, you know, we'll return to some form of core activity. In my view, you know, in Canada, in particular, we're pretty resilient office cores. And so, they may look a little different, but the downtown cores have been resilient. They're not singularly focused, and they'll return to some vibrancy again. It just may take a little longer this cycle than it did the last cycle.

Mary Rowe
Bill, you said that you were at 1.6 percent vacancy before COVID, which is really, as you say, an extraordinary number. What would you be at now?

Bill Logar
You know, if you look at the market, you know, this—so let's just say, as of the beginning of March, the downtown core market was 1.6 percent direct vacancy, and about 4 percent sublet vacancy, so call it a 2 percent total. Today, we're about three-and-a-half percent direct, and about two-and-a-half percent sublet, so we're about six percent. And so, you know, we all hear, vacancy has spiked, which again is, you know, if you talk to many people in the real estate industry or downtown core industry, they'd say, you know, five to eight percent is probably a stable market. And so, you know, we will see some up and down here, and we'll see some noise. But I think at the end of the day, we'll return to some stability. And you know....

Mary Rowe
Bill, it's a hell of a way to have a course correction. Just saying. I mean, if, you know, if you're just reading the course correct—it would be nice if it hadn't taken a global pandemic to do that.

Bill Logar
Right.

Mary Rowe
But can I, I, I hear you about the, there is sort of a mean out there, you know, that somehow people are, there's a great exodus out of the city, and I, I always say back to people the Stephen Leacock quote, you know, "the rumors of my death are highly exaggerated," or something. But it's...

Bill Logar
M'hm (affirmative).

Mary Rowe
...very hard to predict, obviously, what's going to happen, but it's not happening at the level that some people are anticipating. I guess, you know, Toby Lütke, the CEO of Shopify in Ottawa—and part of, I think, the important part of this conversation for people to recognize in the audience is that this is a conversation happening in the downtown cores across the country, particularly in Ottawa, in Montréal, and in Calgary—and Calgary is a number of years ahead of us on this, but. So, Toby's quoted saying when he said that they're not bringing people back to Shopify in Ottawa until the end of 2021, and even then he's not sure, and he said, because the end of that tweet was, "office centricity is over." That's such a definitive statement in open tech's I think, followed suit. And I'm just wondering if Bill, you have—it's not just the tech industry. I mean, I mean, I can see how the tech industry might be more amenable to working digitally, and working on their computers, and in coffee shops, and in between taking the kids to camp. But there's tons of activity that goes on in your spaces that don't lend themselves to that kind of shutdown of the actual office, right?

Bill Logar
Right. I think, you know—and, and even to the comment that Shopify made, you know, yes, there will be change, and that's a different business. But, you know, a week or two after they made that announcement, they leased 90,000 square feet in Toronto.

Mary Rowe
Yeah.

Bill Logar
And Facebook made a similar announcement, and Amazon, and then leased massive amounts of office space. And so, I think, you know, there will be a change. And I think when I look at different businesses, I think there'll be some flexibility in the way people operate, you know. But as you talk to, you know, different business leaders, one of the things that, you know, they face, I've seen us facing, is how do you build a, how do you build your corporate culture? How do you do that remotely? How do you train?

You know, I'll give you our example. We brought in our summer interns this year. And they were all great, they worked hard, but they did it remotely. And, and unanimously, unanimously the response was, like, it was great, we really appreciate it, but it didn't feel like I worked in an office, I didn't feel like I got that culture. And so, you know, I would bring that across any business. And I think, you know, there is definitely—I think you might have made the comment, or Mark—that there's rapid digitization going on, and there will be jobs that I think will be impacted by that and change the structure of how we work.

But, you know, I'm not one to believe—and I'm biased, obviously—but I'm not one to believe that office centricity is dead. I think, you know, people like to come to the office, people, you know, like to be in the core, there's a whole reason these cores developed. You know, and when we talk to urban and suburban—you know, at least today—we haven't seen any distinct markers to say there's a mass exodus, in terms of office users, to suburban. And my view has always been those are two different tenants, there's suburban tenants, and there's urban tenants. And there may be some mix. But they're generally going to stay in that format.

Now, you know, the other thing you hear a lot about is the whole hub-and-spoke concept that is prevalent in the US. And, you know, that's been happening here pre-COVID. So, it's not a new phenomenon. Everyone's tying things to COVID, but it's not a COVID phenomenon. It's, it's something that's been happening, and it's the right thing for some businesses, and for others it won't be. So, you know, like, like I said earlier, there'll be some shift, you know, I think there will be some increased flexibility in the way we work in every business. But, you know, I for one believe that there's still a place for office, and it'll continue to be, you know, people will come back to the office.

Mary Rowe
You know, I mean, I think that the danger we've all got is to not be nostalgic and say we want to just bring it back to the way it was. You know, after disasters there's this tendency that you say we're going to go right back to the way it was. And in fact, as I said in my introductory remarks, you know, there were things about cities that weren't working well before COVID. And we can't possibly just revert back to things that weren't working well. So, one of the things that I would suggest is the challenge to downtowns, is that they potentially haven't had enough diverse use, and there hasn't maybe been as much residential as we could see downtown. There hasn't been enough. So, I think there's the potential for us to reimagine and rethink, as happened in lower Manhattan after 9/11, when lots of folks—I'm sure you're probably familiar with the story, Bill, where lots of your colleagues at Brookfield and others were highly skeptical. Well, they weren't actually, but others were highly skeptical about whether anybody would actually invest in lower Manhattan or put residential there. The intention was to make that neighbourhood much more diverse, in terms of users. They went ahead, Brookfield and others invested lots of money, and lower Manhattan is now a thriving—well, it's not right this minute, but it became post-9/11 a thriving, much more diverse multi-use community. And I wonder if there's lessons for us in Toronto, in terms of how do we reimagine the core in other kinds of ways going forward, right? And let's go to you, Mike. Because your members are the ones that actually build these darn communities, and, and are generally—and I know that your sector has been extraordinarily challenged through COVID, and has had to be really, really nimble and resilient in adjusting. Talk to us about what the experience has been, and what you see as the challenges right this minute.

Mike Yorke, President, Director of Public Affairs and Innovation, Carpenters' District Council of Ontario
Thanks. Well, yeah, thanks, and thanks for being on, and thanks for allowing the carpenters to put forward their observations and perspective. So, with regard to some of the challenges, initially, of course, no one knew the impacts on health and safety. So, we collaborated with the employers and worked with the Ministry of Labour. And I can say that on by the vast majority of jobs are probably safer, the conditions of work are better than they've ever been. So, that was a result of cooperation and collaboration between all parties. So, hand-washing stations, protocols for access and egress to the job sites, washroom facilities. So, that's really been a great improvement. I think the majority of members really appreciate that. So, we're working in better conditions, so we had to kind of come to that. And, and like I said, you work with your employer partners, and we got to a pretty good place. So, that's that side of it is very good.

With regards to the industry going forward, you know, I think it's really too early to tell over the midterm and the longer term, as Bill has been saying. I mean, we have optimism around the longer term. In the midterm, we don't know. But I will say over the short term, our, our hours are only down minimal from the prior year. So, for year over year, we're down—and this is with the carpenters—we're down to about two to three percent over the hours. So basically, it's the same as last year. And you'll find that a lot of our projects were emergency. So, we did, at the retail level, all the screens that went in in the Shoppers and the Loblaws, et cetera. Our members went in immediately to protect the workers and for public safety. So, that was something we wouldn't have done prior. But, you know, what? Due to COVID, we responded. And as you said, the agility and the nimbleness of an industry to respond to new conditions, we stepped up to the plate and we accomplished that.

Also, with regards to a number of ongoing projects in the commercial real estate sector, a lot of our contractors, right now, we're doing overtime. We're making up for a little bit of lost time we may have had, as we implemented the health and safety protocols, maybe we were down for a couple of weeks. But subsequent to that, our members are doing all kinds of overtime. So, on the construction side, both on the commercial real estate and on the residential side, it's all systems go. However, I will say that I represent a lot of members that do work in conventions, trade shows, hospitality, tourism, all that sector. We can acknowledge that that's really being hit hard. And so, we really need to find ways in which we make that sector safer, and in order to allow it to return.

One of the things that's come out recently with the Ontario Construction Secretariat, it's a tripartite organization comprised of business management, the construction labour unions, and government, they do a number of surveys. So, they're consistently, basically, surveying the membership, which is contractors—most recently, in the middle of September, so they interviewed about 300 different contractors. One of the main concerns of all of those contractors is the second wave of COVID. What are we going to do about that? One of the other aspects—and this is something I've heard a lot from our contractors—is the ability of, I guess it's city halls, et cetera, on the planning and the permitting department. That's something that's slowing down a lot of the industry. So, there are some indicators that are obviously of concern. But by and large, the industry has responded, and through agility. And right now, in the short term, it looks as though the economy, and the construction industry, is holding its own. So, those are some good signs. But as both Mark and Bill had mentioned, we are seeing some pivoting take place. For instance, around the logistics centers with Amazon, we've done a number, we've just completed one in Scarborough. There's two more that Amazon has put out for tender in Ajax and one in Ottawa. Those projects are about 100 million plus each. And that really shows a pivoting from, say, shopping center to purchasing. But, you know, again, through agility, our members have responded, and our contractors have responded. If we have to go to more logistic centers, that's what we're doing.

Also—something else that's come up, and this is maybe also a response to the working at home phenomena—is that data centers are now, there's a lot more activity on tendering, on design, for data centers in Ontario and across Canada. So, that also may indicate a shift from, you know, working in one location to multiple locations. So, data centres and logistics centres, you'll see more activity on that sector of the economy. Other areas, or examples, of pivoting might be, I've understood, a couple of locations down in Niagara Falls, where they were putting the foundations in for hotel work; those are now shifting to potentially condos and/or rental. I haven't seen a lot of indication of that in Toronto. But certainly, we're keeping our finger on the pulse of the industry.

And one other example of a shift is even within our own organization, the College of Carpenters and Allied Trades—it's 2500 young men and women in the next generation of apprentices—we've shifted a number of our programs from in-site, or on-campus, on-site ,to a digital format, so they're learning online. So, for instance, one is an ICRA program, which is Infection Control Risk Assessment. It's for the use of our members to work within the healthcare sector. Instead of three days on-site, it's now two days digital, and one day on-site. So, you know, there's a number of pivoting and some shifting taking place. And I think that COVID has expedited something that was probably going to be happening anyway. But those are some examples of things that I'm observing in our industry.

Mary Rowe
Thanks, Mike. You know, I always end up wanting to be careful about not trivializing any aspect of COVID, because we have people who are fighting for their lives, and we have thousands and thousands of Canadians who are on the front lines trying to keep people safe and healthy. But I do think, at some point, we should have a COVID drinking game around every time you're on a session like this and you hear the person say "pivot." It's a bit early to drink, I appreciate in Toronto. But, you know, it's just become the word that we all use. And I play basketball, so I get it...

Mike Yorke
Yeah.

Mary Rowe
...and I understand. Isn't it interesting all of a sudden it's the word?

Mike Yorke
Yeah.

Mary Rowe
Mike, let's talk about retrofitting if we could—and we're getting some questions in the chat about this, and it's relevant for you, Bill, and I think it actually stems from what Mark was talking about. Mark's talking about youngsters being dependent on a bunch of different kinds of institutions and investments—so Ryerson, 30,000 kids there every day—and all the different ways in which the intensification of residential around Yonge Street has given his members a local market. What about retrofitting, Mike? If you think about your membership, they're in the harm reduction business. They're in their version of risk...

Mike Yorke
Absolutely.

Mary Rowe
...risk tolerance and harm reduction to keep themselves safe. And I'm wondering if there's something to be said for that around what I'm hearing Bill say. Which is that if we observe the right level of precaution, then we can tolerate, as a society, a certain level of risk. Right now, the public health authorities are very concerned about risk, and so they're insisting on rigorous kinds of restrictions. But the construction industry has continued to function. And is there an opportunity for your industry, potentially, to model and say, "Well, actually, there is a way to continue on"?

Mike Yorke
Right.

Mary Rowe
And I'm wondering if related to that would be to start talking about whether there are holdings in the core that could be retrofitted for other kinds of uses if, in fact—Bill, I hear you that lots of people want to come back. But we know there are lots of people that are going to say they're going to want to keep working from home. So, what do you think, Mike, is retrofitting...

Mike Yorke
Absolutely

Mary Rowe
...possible?

Mike Yorke
Absolutely. And that's why I'm interested that you'd mention the terminology of risk, because that's right in the title of our training program. We have a three-day program specifically around that, ICRA, so Infection Control Risk Assessment. We've been teaching that for a number of years, but never has it been so important as right now. So, a number of our members, whether you're working in healthcare, whether you're working in laboratories at universities. So, we're seeing an opportunity to expand on that training for even interior or tenant improvement office interiors downtown. When we go on-site, we want to ensure that our members are working in the safest of all conditions, but they're also working safe to protect other tenants or other, you know, patients at a hospital, or other users of the facility. So, absolutely, that's a fundamental piece to training. Training is key.

Mary Rowe
And Bill, you were talking about this, all the measures that your property managers have been taking to try to create safe space, right? This idea of working safe. So, do you have a sense at all in the commercial, I mean, I know you've got the, your, the numbers you gave were pretty modest, in terms of the impact on occupancy, in terms of leases. But we, you know, if we went downtown and looked at lights on, my suspicion is it would tell us a slightly different story. So, even though the lease may have been renewed—like my lease, for instance, we renewed it for eight years, but we're not in it—so, thoughts on conversions, or do you think there's going to be opportunities to actually create what I would call a more complete neighbourhood in the core, with more residential, potentially?

Bill Logar
You know, I think we're all always looking at our assets to see what the best uses, how we can maximize them, what makes them efficient, how do they fit into their neighbourhoods. I think, you know, the talk of converting commercial office buildings is always a bit tough. It's expensive. Commercial office building floor plates don't lend themselves to res plates. You know, if you look at the tall building guidelines in Toronto, they lend themselves to a 750, you know, square meter footprint, plus or minus 8000 square feet, centre core elevator makes it, you know, very efficient to put units around that.

Mary Rowe
But Bill, you've got extraordinarily smart people working in your industry. And I know that this is what you guys will always say: it's cheaper to knock an old building down, put a new one up; the conversion is too complicated. But if the screws were really put to you and you had to say, I've got—like, let's look at Calgary. Before COVID, 400 empty floors. Are we really—you have tremendous resources and smart people you could put to this. And then you could create more, I suspect you could create a more resilient neighbourhood in some of your buildings, because you would have a variety of users and uses. No? Do you not think it's worth it?

Bill Logar
Well, I would agree there's a lot of, you know, smart people in the business, a lot of creative people in all our sectors. And people have been looking at a bunch of different solutions. You know, you mentioned Calgary. I think there's two buildings that actually been converted in Calgary to res, and they're both smaller, five-six story buildings, so they're small. One was converted a hotel, one to a rental building, you know. And so, I think we'd all want to support, you know, more diverse, more holistic neighbourhoods. The function is, how do we do that? And maybe it's better to do that, as opposed to converting an office building. There are, to Mark's point, patches where there's, you know, smaller buildings that we can look at redeveloping to something that's more effective, as opposed to converting, you know, a core financial building.

And I think that's where it sort of lends itself. I think it lends itself more to, how do we look at the neighbourhood, and what are, you know, existing pieces of land that are not being used to its best use. And it's not, you know, not just the most economic use, but the best use for the neighbourhood. And that includes economics, includes the people living in the neighbourhood, it includes the whole gamut. And looking at those areas where I think you can have a more meaningful impact, as opposed to how do we wholesale, you know, look at repurposing buildings. I think you can do parts of that, but you're not initially as a whole.

Mary Rowe
But it doesn't have to be all or nothing, right?

Bill Logar
Right.

Mary Rowe
Then maybe we may we're going to start to see—I mean, this is part of what is before us. Are there opportunities for us to be really innovative?

Bill Logar
Right.

Mary Rowe
So, maybe some of your real estate is now going to be used with some light manufacturing, like in Hong Kong, you know.

Bill Logar
Right.

Mary Rowe
So, some of the floors get taken over by other kinds of uses. Mark, I want to speak to you a little bit about what the, what one of the challenges I know you see on Yonge Street, which is that there have been thousands of folks across the country who have been challenged because they have no home to shelter in. There is no shelter-in-place option for them. And there are a number of city services that have been challenged because we don't have the capacity to safely shelter people. And so, I think that's had an impact on Yonge Street. I've been on it, I've seen it. And I'm wondering how, that was happening prior to COVID, you were already navigating this, and it's happening in the downtown cores. Any thoughts on around the country? Any thoughts on how you've navigated it thus far, and what you think needs to happen going into the future?

Mark Garner
Well, I think that's the important question that you're asking, Mary, is it really is. We've had what I refer to as a safe and inclusive strategy since 2015, which talks about inclusivity in the evolution of, I think, future neighbourhoods. And I think based on COVID-19, it's drawing attention to the—I don't want to call it the K-Economy, but the separation or the gap that currently exists within our urban environments and our downtown cores. I think there has to be that balance. And I think you and I have talked about this balance. But we can't have the density within one geographic area. It has to be a decentralized model, that we distribute all these types of services and supports and affordable housing across the GTA, not specifically in the downtown core, where back in the day when real estate prices were low, then all the services—it became a downtown issue. But as we know, it's in every single neighbourhood. Addictions, mental health issues, are across our great city, and I think that is the future for us.

So, I think the balance that you speak of is a little bit of what Bill has said, and you've mentioned is how do we coordinate, how do we take available space, or whether it's employment clusters, and convert them to affordable housing? I think there is a definite need because you're, you're starting to hear—and I like Bill's phrase about "I live in my office," I'll be using that a lot, Bill, thanks for that—because I mean, we've heard about rural communities, now, starting to invest in infrastructure. I think there's an opportunity before us, as we come out of this COVID-19, and the recovery and rebuild phase, is we have to start putting the infrastructure back in. We need fibre downtown. We need incubation startup businesses to have all the means that they have within a very vibrant downtown core. Which includes, you know, residential diversification, as well as just the employment cluster change. So, I think I—I may have touched on it a bit, Mary—but I think that's what's before us is the divide between the rich and the poor, and the balance. There's a lot of people that are out of work. And you and I heard very directly yesterday from the hospitality sector, based on the summit we had with Mayor Tory, is that there's a lot of unemployed people that are not faring quite well in this. And they may, if they were spending one-third of their disposable income to live outside of Toronto, to come down to Toronto to work, then we've got a whole other set of priorities as we come out of this.

Mary Rowe
Yeah, I worry about when we talk about transit, for instance, and we talk about downtown, you know, downtown, you know, a typical picture of downtown is of a crowded, bustling street, with every kind of person navigating the sidewalk, and bikes, and couriers, and cars, and buses´ and it's a mélange of complexity. And now, we've got pretty much empty streets. And I worry about this that we're going to lose our, our sense of empathy, that there are people in my community with, living different lives from me. And the dilemma is that, if you're only at home and you're only talking inside your bubble, you forget that. So, I'm wondering if you were to prioritize going forward, how important is it that we create safe transit, and we build back confidence that people could, Mike as you suggested on the job site, they can work safely, can they travel safely? And how important would you say that is, Bill, to bringing the core back? Getting transit, getting people to use transit—because the remarkable thing, is transit is still running.

Bill Logar
Still running. But, and again, I think that the question that you're posing, Mary, and I think where we're starting to divert our focus on now is, what is stopping people from coming to the downtown core, and then how do we reconvene people? And I think through the employment cluster strategy that we've been working on with SRRA is starting to determine that transit is the number one issue, safe transit commutability. Suburbia seems to be doing well, when you look at mall numbers and retail numbers outside of Toronto, the 905-area code. Those, those areas are doing okay. They're running about 80-90 percent of what they were prior to COVID. It's the downtown, specifically, we've got this astigmatism that, you know, COVID is in the downtown core. We've got to get the employment cluster. And transit plays that key role. You've got to work with Metrolinx and, and TTC to be able to do that.

Mary Rowe
The thing that's difficult, of course ,is if you look at the numbers. COVID isn't in the downtown core. It's actually—I mean, it's there, obviously. But it's really concentrated in dense neighbourhoods that have not been, where there is inadequate public space, and where there's overcrowding, and there's bad density. And that's, that's a shame, that's the shame that we as urbanists have to wear, is that those poorly planned, and poorly designed, and poorly managed communities, are where COVID is most acute. Bill, can we just talk a bit about—I think, we're going to round up the corner, here, and I need people to start thinking about going forward. If you had to pick two or three priorities though, either for your sector, or for people, for office, office-dwellers, or for the government. What would you say should be the two or three key things we need to focus on in the next couple of months?

Bill Logar
You know, I think we need to focus on the statistics and the reporting, and getting the idea of what is the—you know, to me it's the, what's the risk factor, and what are people prepared to accept? You know, does, does one or two cases make an outbreak? You know, every announcement is an outbreak .and, and not to minimize it, it's important, people are suffering, they've got to take care of that. But every time we hear it, it is, you know, overblown, whether it's vacancy skyrocketing, outbreak here. So, how do we make people feel safe ? And I agree with the comment of getting, you know, I think the workplaces, whether it's job sites, whether it's offices, whether it's factories, they've done a tremendous job to make that as safe as possible. And it's not gonna be perfect—like, let's, we gotta, acknowledge that, it's never gonna be perfect—but they're taking everything they can to make to make it as safe as possible for their employees to come back. Now, it's getting them back, you know? And so, when you're in your own car, it's one story; but if you have to get on public transit, that's another story. And we have to figure out how we make that safe for people, and how people feel comfortable.

Mary Rowe
What about the public sector, Bill? They occupy a lot of commercial space in our cities across the country. Should they be setting an example and coming back and inhabiting their offices?

Bill Logar
I think if they can make it safe, yeah. I think there has to be a balance of—I think where we're stuck, you know, like somebody mentioned earlier, there's going to be a group of people that are going to forever say, I don't feel comfortable, I don't want to go back to the office—whether they really feel uncomfortable, or whether they just don't want to go to the office—and there's going to be a group that says, I'm good to go back, I'll accept whatever risk there is, I just want to get back to the office. And we have to find that balance. And so, I think we have to make people safe and give them opportunity to work. But we shouldn't, you know, I'll say artificially keep them home, if we can make them safe in their in their place of employment.

Mary Rowe
You know, one thorny issue, Bill, and I don't know what the answer is—and then I'm going to go to Mike and ask him—but one thorny issue for you is that you have buildings that still have large parking lots. And, and you have tenants that that provide parking as perks to their employees. I'm always staggered that we have people who live in Yonge and St. Clair and drive to their parking spot. Is there any way, you know, we're getting people who are going to push back on the University Avenue being dedicated to walking, and Yonge Street—I think there are lots of people that feel that those lane, lane restrictions should stick beyond COVID. Is there some way that your sector could be more ambitious, in terms of getting your tenants and their employees to actually vote with their feet, and take transit, and not drive?

Bill Logar
For sure. And I think a lot of us are trying to do that where we can, in terms of, you know, whether it's providing biking infrastructure, shower infrastructure in the base of the buildings, which none of these—well, I shouldn't say none of these, many of the early buildings—were not built with that, and we're retrofitting our buildings to try to accommodate that. And so, you know, that's a way we can help that process. But, you know—and I think I would argue a little bit, though, we don't have tons of parking by any means. But there's always going to be a group that's going to drive.

Mary Rowe
I know.

Bill Logar
But I think yeah, to the extent we can provide infrastructure to support that, I think that's what we should be doing, and many of us are trying to do that.

Mary Rowe
But if the commercial real estate band together and mobilize people to get back on transit. and get on it safely, with all the safety provisions that we all take as individuals and that the system provides, that would be a remarkable thing, I think. Mike, thoughts on the next couple of months, what should the focus be?

Mike Yorke
Well yeah, I wanted to speak about a positive example and maybe an approach. But I just wanted to go back to your earlier point around the lane designations. And I will, I'll use Destination Danforth as an example.

Mary Rowe
Yeah.

Mike Yorke
What a great, what a great development up there. Really healthy for the neighbourhood. I think it goes a long way around biking infrastructure and for the restaurants as well. So that's, to me, that's a very positive example. And then, in fact, actually, another one that I'd like to mention around getting folks back in at the community colleges, city halls, and other community centres—because that's one of the primary issues that came out of the OCS study and survey, was about 50 of employers are saying they can't get access to the permit, the planning departments of city hall. So, a positive example that we're using at our college for our 2500 young apprentices is a Citizen Care Pod. And that's a made-in-Ontario solution, where screening is done on a daily basis by an individual in a safe working environment. It's a retrofitted c container that's been put together by WZMH Architects and PCL Construction, and we placed one at our trade, at our College of Carpenters. We're saying that's a positive example that maybe could be used at city halls, or other community colleges, other community centres. So, I think we need a few examples out there of a safe return to work that allows for confidence and safety for the workers that are returning to work. So, we're trying to come up with, like I said, something that's a positive example out there. And we want to use that to have others take a look at it, maybe emulate that. Because we won't get people back to the offices unless they feel safe. And so, we have to look at specific mechanisms to do that. One is a screening process and maybe testing, and the other is, like we said earlier just, you know, safety protocols on the job sites, whether it's the construction site or an office facility.

Mary Rowe
Right, last word to you Mark and then I'm going to pass back to Kelly—and then I'm just going to acknowledge I think there's a number of questions in the chat that are coming up, and I think we need to follow on session, particularly to talk about what the role of government should be, in terms of setting some targets and goals, and also regulatory changes, and maybe some investment how they could actually catalyze. Because you, you folks have memberships and constituencies that can move mountains, and we get it, labour and industry are critical, as is the advocacy sector that Mark represents, an independent business, and then maybe we have to talk about the third leg of the stool, or the fourth leg of the chair, or whatever it is. Mark, last comment to you, in terms of what you think we should be doubling down and prioritizing to get the downtowns back.

Mark Garner
Well, I think it definitely is to your original point, Mary. I think transit, as we know, there's a lot of people that commute from Peel, Durham and, you know, York on a day-to-day basis to get into the downtown core to their jobs. So, obviously, transit safety is key. Because if not, we're going to potentially see, you know, satellite offices in Hamilton, Guelph, and Waterloo, based on those sectors. I think your point around the government—I'd always love to talk about the political situation, because it's ,there's a time to either follow or to lead. And it is time for our politicians to lead. We have to have all three levels of government working together on a cohesive strategy to—and again I can't compliment CUI enough for the work that you've done around the value of investing in in downtowns in Canada, all the work you've done with Bring Back Main Street. The solutions are before us. And then, obviously, the new project that you're working on is very critical.

So, how do we sustain our neighbourhoods? How do we keep them viable? Because we know we're going to have potential increased vacancy. We will see, instead of having eight coffee shops in your neighbourhood you're going to have five. Instead of 20 restaurants you're going to have 14. There is going to be that evolution. And then how do we focus on that retail high street? And what is its evolution is going to be the key focus. So, government working together, safe transit, get the employment cluster back, and then how do we keep and sustain our neighbourhoods in this new evolution.

Mary Rowe
Thanks Mark. And I just want to say, a number of years ago, Mayor Daley ,that the father, the first Mayor Daley of Chicago was asked why did he spend so much time investing in downtown ,why was it so important to him to do that? And his response was, "an apple rots from the core." And I feel very strongly that we need to continue to invest in our assets in our core, which is why we're committed to restoring the core. And I appreciate having Mark, and Mike, and Bill on this session, and thanks Phil for putting it together and inviting us, and we look forward to what the Empire Club, following the tradition of Winston Churchill, is going to continue to carve the future for us here, and get us all engaged. You know, we can do that, and restore the core. Thanks everybody. Over to you, Kelly. Thank you.

Kelly Jackson
Thanks, thanks Mary. And thanks to all the panellists. As you noted, there could definitely be a sequel to this, for sure. You know, the club, obviously, we're very serious about trying to have the conversations that are critical at the moment, that we all need to be having them, and to really make sure that we continue to engage. So, look forward to finding other opportunities to continuing this piece. I'd like to introduce, now, Phil Gillies from the Ontario Construction Consortium to provide appreciation remarks. Phil?

Note of Appreciation by Phil Gillies, Executive Director, Ontario Construction Consortium
Thank you, Kelly. If I may, the obligatory plug for the sponsoring organization. Formed in 2018, the Ontario Construction Consortium is an organization dedicated to strengthening the construction industry through advocacy, education, networking, and workforce development. The OCC is a voice for quality work, a robust training sector, and safe workplaces. And as evidenced by this webcast, we support initiatives to better the overall well-being of our communities. I would like to join with you, Kelly, in thanking our panellists. Mark Garner, Downtown Yonge BIA, under Mark's leadership, is the leading voice for progress in the downtown core. Not just in terms of business advocacy, but also working at the street level on social issues, and legal issues. And Mark, we owe you a debt of thanks for your ongoing work in that regard. Bill Logar, thank you from KingSett. It was very encouraging to hear some of the news that you brought us today, and some of the statistics and forecasts that maybe aren't as gloomy as are generally thought. Mike Yorke, from the Carpenters Union. Mike, thanks so much. It's only a couple of weeks ago, actually, that Mike and I first discussed putting together an event like this one today. And the fact that it came together so well, so quickly—and with so many hundreds of people watching—we're absolutely delighted, and keep up the good work on behalf of your members.

And to the Empire Club, Kelly, thank you so much for providing the platform for this, for allowing it to happen, to MJ Perry, your hard-working board member, who worked with us on bringing this forward, thank you. And to your wonderful staffers, Jehan Karsan and Ashley Gregory, thank you. And to thank all of you for joining us. I know we had many members of the Empire Club, supporters of the Canadian Urban Institute, concerned citizens who saw the event online, and guests, including people I know who are with us today from Queen's Park and from City Hall. Thank you all.

One thing that maybe we didn't discuss as much as I would have liked is the recognition that we have to give to the downtown businesses, the storefronts, the restaurants, the stores, who are struggling to survive right now. Men and women who are watching their life savings and years of hard work hanging by a thread. We must recommit to supporting them in every way we can. So, to everyone on today's webcast, you can show your appreciation for today's discussion by ordering your dinner tonight from a downtown restaurant. When we sign off, pull up an online menu, and order your dinner from a downtown restaurant. I'm going to be doing that, and I hope a lot of you will be too. The challenges are great, but we have overcome great setbacks before. And we will post-COVID. The statistics look a little grim, and the forecast could be better. But remember the crumbling condition New York City was in in the 1970's, or the East End of London, England was, a couple of decades ago. And look at them now. Toronto, Ottawa, and our downtown centers across the country will come back, benefiting from the innovations and programs, only some of which have even been thought of at this point.

And Mary, thank you so much for making time to act as our moderator. We know you're not just working on Toronto or even Ontario issues; you're advising and leading municipalities across the country. The demands on your time for many, and your joining us today is much appreciated. So, thank you, one and all. I hope you took away something positive from this and thank you for joining us.

Concluding Remarks by Kelly Jackson
Great, thank you so much, Phil. And I think a really important reminder for all of us, right, that at the end of the day, talking about the core, the core is filled with people. And it really comes down to how we're all going to be able to continue to just support each other, and try to be creative, and pivot—perhaps to Mary's funny comment—and find ways to make sure that we do restore that vibrancy that we all know and love.

Before we close, I just want to take a moment to highlight a few upcoming events that we have next week. Next week is actually "Power Week," at the Empire Club of Canada, because we have four amazing events happening all in one week. All sorts of interesting conversations happening. On October 27th at noon, we have Ambassador Bob Rae, Canada's Permanent Representative to the United Nations, in conversation with Dr. Bessma Momani, all about "Diplomacy in a COVID World." On October 28th, we have Michael Medline, the President and CEO of Empire Company and Sobey's Incorporated. On October 28th, as well, in the evening, we have a Special US Presidential Election Panel, with a number of commentators who are going to look at potential impacts of the election results, in terms of Ontario and Canadian economic and trade policy. And finally, on October 30th, we are going to be delighted to host the Honourable Lisa MacLeod, Minister of Heritage, Sport, Tourism, and Cultural Industries. So, please join us next week. I'm sure at least one of those conversations is going to be one that is of interest to you. This meeting is now adjourned. Thank you again for joining us and have a great day. Thank you.