In 2012, landlord John Davis was viewing a potential investment property in Calgary’s Beltline when a striking red-brick apartment building with white balconies and turreted corners caught his eye.
Located at 129 15 th Ave. S.E., the Colgrove is one of the oldest apartment buildings in Calgary; built in 1912 by Robert J. Colgrove and styled on a New York City apartment block. It was a residence for the city’s gentry with carpets imported from England and one of the first electric door entry systems in Alberta.
“I was viewing the property next door, the Colgrove wasn’t actually for sale but I just fell in love with it. We made some enquiries, the ball was put into play, and a few months later I bought it,” he says.
The purchase took Mr. Davis and his wife Suzanne Dryzmala’s rental portfolio to 90 units, the majority of which are older buildings in the neighbouring community of Mission.
Mr. Davis paid $2.7-million for the 18-unit, fully tenanted property which he describes as “a living, breathing entity with a century of stories between its walls.”
Then, in June, 2013, catastrophic flooding across southern Alberta submerged 26 low-lying communities in Calgary, including the Beltline and, with it, the Colgrove.
“It was devastating really,” says Mr. Davis. “I remember going to look at the damage and I couldn’t even get close to the building. I’d have needed a canoe for the last block and a half.”
The damage was significant, included the three basement suites and all of the mechanics, and the ensuing remediation process was long.
“It’s taken three years for the insurance company and the city to do what they needed to do,” laments Mr. Davis. “It wasn’t easy because we wanted to stay true to what the building is and what it deserved in the work that was done. It’s been onerous and I feel like all the excitement for the building’s been blown out of me.”
He admits it’s part of the reason why he’s decided to sell, the rest is simply down to workload.
“We have a lot on our plate with 90 units to look after,” he continues. “I call myself the janitor and my wife handles viewings and marketing. If we had a few less units to look after it wouldn’t be such a bad thing.”
The Colgrove is on the market for $3.15-million and features 14 one-bedroom apartments between 470 square feet and 700 square feet and four two-bedroom apartments between 740 square feet and 910 square feet. It has had a full basement renovation, new electrical system and boiler plant. Mr. Davis says rental income ranges from $900 to $1,500 a month, depending on the unit, and claims the building is always fully rented, despite apartment vacancy rates in Calgary currently being at a 25-year high.
“All of our units are rented all of the time because demand for rental properties with heritage character outweighs supply in Calgary,” he says.
“That’s why [The Colgrove] is an investment that makes financial sense, especially in Calgary’s boom or bust economy. It’s a good niche to be in.” he adds.
His real estate agent, Sano Stante, agrees.
“Even now, we still get calls from people enquiring if there are rental units available in the Colgrove. It’s a lifestyle that people seek out and there aren’t many buildings in Calgary that satisfy it.”
Remarkably, the Colgrove doesn’t have a heritage designation, despite being on the city’s heritage inventory list, and available for designation, since 1982.
“I didn’t take out a designation on it because it would be like having the city as a partner but I’d be putting up all the money and they’d be calling the shots. I didn’t want to do that,” admits Mr. Davis.
Without a heritage designation The Colgrove, and buildings like it, have little protection from developers.
“Alberta is unique in North America in that owners must give their explicit consent for a building to be designated and therefore protected. We don’t have the legislation to do it without the owners’ consent,” says Clint Robertson, the city’s senior heritage planner. “There’s also currently very little dollar incentive for owners to take out a designation. These are both huge challenges for us in heritage preservation.”
But Mr. Robertson hopes this could be about to change.
“There’s a bill being debated in parliament right now which would be a generational game changer here in Canada. It’s a 20 per cent federal income tax credit for protected buildings considering restoration costs. It’s a tax credit that’s been in place in the United States since 1976 which is why so much preservation occurs there,” he says.
Heritage Bill C-323 passed its second reading on March 9 and will proceed to the Environment Committee for debate on March 22. Mr. Davis says it’s the kind of incentive that would “definitely” make him reconsider taking out a heritage designation. But while monetary incentives remain modest, there are benefits to heritage designated building owners in terms of density transfer.
“You can transfer density from one building to another or sell it,” explains Mr. Robertson. “In the case of The Colgrove, there’s very little residual density to transfer because that area of Beltline isn’t zoned for a lot of height. But you could generate transferable density by investing in the building, that’s one way to use a heritage designation to your advantage.”
Heritage designation or no heritage designation, Mr. Robertson is confident the Colgrove has a future, due to the good fortune of it’s location.
“Area redevelopment pressures can put pressure on buildings like the Colgrove, but where the Colgrove is, the set densities are quite low and, because it’s already built out to it’s maximum density, it wouldn’t be economical to redevelop it without getting a land-use redesignation in place,” he explains.
“And even without a designation, we do have policy that speaks against incentivizing the destruction of heritage buildings,” he adds.
Mr. Stante is confident the property is priced to attract a buyer.
“Fourteen months ago, we were selling apartment buildings for $210,000 a door, now we’re looking at $175,000 a door which is what the Colgrove is priced at. It’s a reflection of the declining market in Alberta,” he says. “But it’s hard to peg a number on something so unique, there really is nothing like this in Calgary.”
Mr. Davis says there have been offers on the property since it came to market six months ago but nothing in the right price range. “I don’t need to sell it,” he says, “and I might not sell it. It has to be the right buyer and the right price.”
“I don’t believe you choose buildings like this,” he continues, “I think they choose you. You’re just the caretaker for a while. I’m pretty sure the Colgrove will be here long after I’m gone.”