University District is a first of its kind in Calgary, as a community built on land owned by an academic institution. This means that the University of Calgary will retain full ownership of the land, leasing property to builders and subleasing to buyers. As such, all net income from the development will go directly to future academic initiatives with the university.
The development of the land will be overseen by the West Campus Development Trust, which consists of a group of industry professionals who will shepherd the project and ensure its benefits the university. The result of this unique arrangement is a community designed to enhance life for all Calgarians and support the University of Calgary as a world-class academic institution.
A University of Calgary Campus Master Plan completed in 2010 confirmed that the lands used in University District will not be required for core academic facilities. Approximately 25 hectares of land can still be developed on the main campus, which will allow for approximately 301,000 square meters of new academic, administrative, student life, residential, library and study space. This means that University District can be developed on land without disrupting campus growth in the years ahead.
University District will offer leases on parcels for a 99-year term. The conclusion of this term will either see an extension of the lease or a purchase back at fair market value. This type of model has been successfully implemented in other communities, including the University of British Columbia and Simon Fraser University.
To own a leasehold home is to own everything on the land but not the land itself, because instead homeowners ‘lease’ it from a developer for a set term. Leasehold properties are registered at the Land Titles registry and can be financed just like any other home. You can buy them, sell them, plant gardens on them - even will them to someone. Homeowners will still pay City of Calgary property taxes and condo owners will pay condo fees as usual. So you have all the same rights and responsibilities as a traditional freehold property owner for the length of the lease, which in the case of University District is 99-years.
While leasehold situations are unfamiliar to many homeowners in Alberta, they are actually quite common in major cities around the world; Hong Kong, much of London, England, and the Town of Banff are all built using a leasehold structure. University District’s model is actually quite similar to what is currently happening at the University of British Columbia, and we’ve been really pleased to see how that project has progressed so successfully. We know we have a lot to be excited about.
To put it simply, the opportunity to create and develop a community on this land was so exciting and beneficial to the city and the University that it had to happen, and traditional freehold ownership options aren’t available to us.
Leasehold development occurs when land cannot be sold in a traditional way because the landowner must retain ownership of the land itself. Most often, this happens when the land is owned by the government (federal, provincial or municipal) or a public authority (like a school board, university, or native band) because often the law prohibits entities like these from offering freehold leases.
In this case, the University of Calgary received this land as an endowment on the condition that it should be used to support the University and could not be sold. University District was born from that vision to grow and enrich the University community and the city of Calgary as a whole, since absolutely anyone (not just University staff and students) can live in and enjoy the community.
University District is quite different, and it comes down the fundamental structure of the lease agreements. The most important differentiators between leasehold situations are the length and conditions of the lease, and who the landowner is.
West Campus Development Trust has pre-paid a 99-year lease for the land, which as been pre-paid by the developer (West Campus Development Trust). This means that our residents will be able to rest with complete certainty that no further lease payments will be due for the balance of the term – no surprise rent reviews, just complete transparency. This is ideal for everyone, because it means we can all get to the business of building the best community possible, long-term.
You also must consider who is leasing the land and I think what’s even more important is the ‘why’ – what is the vision and purpose of the community? In our case, University District’s landowner is the University of Calgary, an institution with roots going back 100 years. University District is less of a real estate project for them as it is an extension of their plans for sustainable community growth and prosperity long-term. It’s not going anywhere, and neither are we as the Trust. So University District’s leasehold opportunity is attractive because the landowner has a vested interest in maintaining the value of their own and community well beyond the 99-year lease.
Right off the bat, this area is extremely attractive. It’s location and proximity to jobs and post-secondary, health centres, recreation, arts and culture, the outdoors – all of it - is second to none in our city. It’s easy to see why people have been wanting to live here for so long.
The tangible benefit of the leasehold structure is that the Trust, as developer, is responsible for the development and maintenance of the community, so streets, infrastructure, and amenities (parks, recreation centres, etc.) will be thoughtfully designed, well taken care of and won’t be completely reliant on government funding or timelines.
At the end of the term, the WCDT can do one of two things —negotiate an extension of the lease or pay the leaseholder fair market value for the residence which sits on the land. In theory, homes could become less valuable near the end of the lease, if the area or developer because less desirable.
However, over the course of the term, and as people continue to move into the area, the Trust and the University have a vested interest to ensure that this community remains a vibrant community and sound investment for homeowners since University District will continue to serve the University of Calgary and support its students and staff for centuries to come. University District will outlive me and everyone I work with, which is a mighty thing to consider.