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Mayor Dianne Watts leads a tour of the new City Hall in Surrey, B.C., Feb. 18, 2014. She says the new debt the city has taken on is worth it. (Rafal Gerszak for The Globe and Mail)
Mayor Dianne Watts leads a tour of the new City Hall in Surrey, B.C., Feb. 18, 2014. She says the new debt the city has taken on is worth it. (Rafal Gerszak for The Globe and Mail)

Surrey seeks spotlight with shiny new City Hall Add to ...

Mayor Dianne Watts unveiled the latest addition to her big bet on a future downtown in Surrey this week, one that has pushed the city into new debt as it races against a half-dozen other suburban municipalities trying to become the region’s second metropolitan core.

Ms. Watt’s trump card in this round was the striking new glass-fronted, ultra-modern $97-million City Hall. It’s aimed at definitively establishing the area around the Surrey Central SkyTrain station – now dominated by large malls, enormous parking lots and small fast-food operations – as the city’s new urban heart.

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The City Hall is part of a series of heavy investments Ms. Watts has made that have turned Surrey from a city that until a few years ago had no long-term debt into one carrying close to $150-million, with interest payments alone amounting to $5-million a year. The payoff, Ms. Watts says, is that developers have invested back in the future downtown, with $3-billion in condo and office buildings under construction. She maintained steadily, to many questions from the media who arrived for the opening, that it’s worth it.

“It’s very important to us. The economics of it is really positive,” the mayor said.

Under her leadership, her council has approved spending on not only the glitzy new City Hall, but the $32-million parkade under it, a $36-million library next door, and a substantial investment in a hotel, office and condo project planned for the third side of the plaza in front of the hall. Developers and commercial real-estate experts applaud what the mayor has done.

“Surrey is one of the most forward-thinking municipalities in the Greater Vancouver area,” said Darrell Hurst, an Avison Young commercial broker in Surrey.

The city’s efforts are attracting office development, he said, such as the Coast Capital Savings Credit Union head office currently under construction.

Major developers in the area say condos are selling steadily, which should help boost the downtown population toward the target of 85,000 – an extra 50,000 – that Surrey is hoping for by 2041.

But those developers, brokers and others note it’s going to be a long, hard slog to build a place with more than just condos, a couple of civic buildings and a plaza and create the envisioned downtown with 43,000 jobs and three million square feet of offices.

“Private-sector office space is a tough one and it’s a fairly small pie that every municipality is fighting for,” said Surrey’s community-planning director, Don Luymes. “There’s a competitive landscape out there.”

At the moment, only about two million square feet of office space is in Surrey’s city centre, according to a recent Metro Vancouver report. That’s about the same as Richmond and a little less than Burnaby.

Both of those cities, along with New Westminster, Langley, North Vancouver and Coquitlam, are eager to attract new office buildings and tenants. So is Vancouver, which has seen some major suburban tenants gravitate to the city in the past few years. There are 32 million square feet of office (nearly half the region’s total) in Vancouver’s downtown and Broadway areas, and a dozen new projects are under way.

A sign of the stiff competition is the sudden spike in Surrey’s office vacancy rate recently, as Coast Mountain Bus offices decamped to a new TransLink building in New Westminster.

Besides offices, the new downtown needs retail.

“We’ve just moved 750 of our own staff and one of the things they’re wondering is ‘Where do we go for lunch?,’” Mr. Luymes said. Restaurants, shops, small bars, places to wander around – all of those are part of a downtown too. “That is a real ingredient in city-building.”

At the moment, the city’s plan is to see how much retail develops organically as the thousands of condos in the area get built. But, if it doesn’t, the city will be looking at whether it needs to intervene to encourage more. “We will carefully assess whether we’re getting the qualify-of-life retail we want,” Mr. Luymes said.

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