Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1399

Yesterday Adam Radwanski of the Globe and Mail published an interesting article called, Rust Belt revival: Lessons for southwest Ontario from America’s industrial heartland . 

The article talks about some of the things that the Rust Belt is doing to revitalize their cities and the lessons that many cities in Ontario – which are facing similar fates – could learn from. It’s worth a read.

I’m not going to summarize his article, other than to say that some of the key points were around tax increment financing, tax incentives, University connections, a DIY/entrepreneurial culture, and the American tradition of philanthropy – which Radwanski points out is probably the least imitable for Canada.

And it’s this last point that I would like to focus on first. The US has a deep history of people getting rich and then giving back – certainly more so than in Canada in my opinion.

If you think about the resurgence of cities such as Detroit, you’d be hard pressed not to think of people like Dan Gilbert . He has become the poster boy for Detroit’s resurgence by moving his companies to downtown and buying up most of the office buildings. If and when Detroit comes back (I think it’s a when), Gilbert will easily be one of the biggest beneficiaries.

Now, you could argue that this is made possible because of greater income inequality, but there’s something to be said about powerful individuals acting on intrinsic passion. Gilbert is investing in Detroit because he personally wants to see his home city come back. And that’s hard to replace.

The second point I would like to focus on has to do with this snippet:

With oil’s current slide, Canada really can’t afford for it to remain a drag – and in fact there is some expectation that Ontario will instead reclaim its old role as the leader of Canada’s economic growth. Its premier, Kathleen Wynne, recently expressed optimism that plummeting oil prices and a sinking dollar will prove a boon to manufacturing. “I don’t wish for low oil prices and a low dollar for Alberta,” she said earlier this month. “But at the same time, we want our manufacturing sector to rebound. So if that [low oil price] helps, then that’s a good thing.”

I don’t know what context this was said in, but I continue to feel strongly that we cannot rely on low oil prices and a low Canadian dollar for Ontario’s competitiveness. That is a terrible business model, and an unsustainable one. We need to figure out ways to create value and grow the economy without relying on currency differentials and other macroeconomic factors. Radwanski is right to point that out in his article.

So let’s hope we don’t let any short term benefits go to our head. There’s lots of exciting work to be done.

Image: Old Detroit auto factory via Flickr

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It’s wintertime in Canada and that means  people complaining about the cold  and/or the fact that in our climate there are certain things that simply can’t (or shouldn’t) be done when it comes to city building.

But  I don’t buy that .

A great counter example is  Igloofest in Montreal . Unless you’re into electronic music (OK, fine, young people call it EDM today), you probably haven’t heard of it. But it’s basically an outdoor dance party on Montreal’s waterfront in the middle of the winter.

The opening night is tonight and the overnight low is expected to hit -27 degrees celsius. Take a look at the video at the top of this post though ( click here if you can’t see it). That’s how many people are going to crowd outside in the cold and dance their hearts out this evening.

And so whether you’ve got harsh winters or summers, there are always creative ways to make it work for you. You just have to own it.

If anyone would like to take a trip to Montreal this winter, I promise to stand by my words and dance outside in the cold. Have a great weekend everyone.

The big news in the (Canadian) retail world this morning is that Target has confirmed that it will be shutting down its entire Canadian operation . That means 133 stores will close and about 17,600 employees will soon be out of work. Here’s what the CEO had to say :

“After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021,” said Brian Cornell, who became the new chief executive officer last summer.

I can already hear the keyboards typing as business schools across Canada and the world prepare this case study: Why did Target Canada fail after not even 2 years?

I don’t really want to focus on that in this post, but my initial sense is that they came in too big and too undifferentiated. Maybe they underestimated the particularities of the Canadian market and shopper, but they certainly didn’t come in lean.

They bought up over a hundred Zellers leases and used that platform to obtain a critical mass quickly. But the problem with this approach is that it meant lots of upfront costs and fewer opportunities to adjust as they gained real feedback from the market.

Regardless of what happened, I’m more interested in what the impact will be to the retail real estate industry going forward. Remember, Target is an anchor. And when it entered Canada, it was viewed as an opportunity to refresh some of our tired malls – many of which were already showing signs of dying .

So what happens now? Who comes in to fill their shoes?

Image: Flickr