Only $2 million in CACs offered in high density downtown tower proposed for 1070-1090 West Pender. A fair value?

1070 W Pender

Big density, small community amenity contributions proposed for this tower at 1070-1090 West Pender. Bentall Kennedy, 31 storeys, 562,135 square feet of office space. Public Hearing likely within weeks.

Are our elected officials at Vancouver City Hall “giving away the farm”? Are taxpayers being short-changed — by about $17 million? Time for a spotlight, when this comes to Public Hearing in the next several weeks.

On February 3, 2015, Vancouver City Council decided to refer a very high density tower proposal to go ahead to a Public Hearing. What is peculiar about this referral is the modest $2 million of Community Amenity Contributions (CACs) that are being offered in return for a huge increase in overall density on the site.

A total area of 562,135 square feet of office space is requested; this is over the maximum 353,342 sq ft maximum allowed under Downtown District zoning. The requested floor space ratio is 17.5; in contrast, the allowed FSR is 11, so the proponent is asking for an increase of 62.8%.

The last two pages of the staff report show that the City has determined that a total CAC of $2 million be put forward for “Childcare Facilities”. The other components of the “Public Benefits” table are required components: Development Cost Levies ($7,234,677) and a Public Art contribution ($1,017,464).

1090 West Pender location, VanmapIs the City of Vancouver (i.e., the taxpayer) being shortchanged? Or is the CAC calculation fair for the very large jump in density for this proposed 31-storey commercial office building in the downtown core? Staff did the negotiations and recommendation (ultimately responsible is General Manager of Planning and Development Services Brian Jackson, but the case recommendation was presented by Kevin McNaney, Assistant Director of Planning), but our elected officials are responsible to cast a critical eye on behalf of the public and ensure the citizens they represent are getting a good deal.

It’s critical to note that Vancouver City Hall has no transparency in the determination of a CAC. Apparently the CACs are “negotiated” but at the same time they are considered “voluntary” (further details are available from City Staff in the Council video clip for February 3, 2015). Council members asked interesting questions for staff to report back on during the Public Hearing (actual height proposed in meters, view cones, carbon reductions, calculation of CACs, etc.) (From the questions apparently even other businesses are wondering about the CACs on this project.) The City has released reports for CACs for projects in 2011, 2012 and 2013. How does the proposal for 1070 West Pender compare?

The development seeks a density increase of 208,793 square feet (19,397 sq metres). For a commercial project at 475 Howe City Council approved a density increase of 149,275 sq ft, with a CAC valued at $14,042,595. By simple math ($94 per square foot), this rezoning at 1070-1090 West Pender would produce over $19,641,000 in CACs for the taxpayer, so on the surface, it looks like being short-changed $17 million or more. That could do a lot of good to address community needs, so a high level of scrutiny is needed at the Public Hearing when this topic comes up.

While the DCLs (Development Cost Levies) paid by developers are fixed, CACs are determined site by site. Further information on this topic is contained in the following post: Community Amenity Contributions in Vancouver – flowchart into the murky world of CACs (CityHallWatch, Nov 19, 2013).

It’s expected that Council will review this project at a Public Hearing later this month or in early March (likely February 24 or March 3rd). Bentall Kennedy, the developer behind the project, is a regular contributor to Vision Vancouver (in both 2011 and 2014). The firm bills itself as “one of North America’s largest real estate investment advisors,” and “Canada’s largest property manager,” and also grabbed attention recently when it bought one of the Olympic Village buildings, solving a major financial headache for the City and hangover from hosting the 2010 Olympics. Corporate CEO overall is Gary Whitelaw, while Remco Daal is President and Chief Operating Officer  for Bentall Kennedy Canada.

Are CACs arbitrary? Where do the Community Amenity Contributions originate from in the first place? The CACs appear to meet a condition set forth by the Vancouver Charter, in Section 565A. Council may consider changing the zoning (maximum height, density or use) for a single property as long as it meets one of the following conditions:


565A. Council may make by-laws

(e) providing for relaxation of the provisions of a zoning by-law or a by-law prescribing requirements for buildings where

(i)   enforcement would result in unnecessary hardship,
(ii)   Council determines that the proposed development would make a contribution to conserving heritage property,
(iii)   Council determines that the proposed development makes provision for public space or activities,
(iv)   Council determines that the proposed development makes provision for low cost housing for persons receiving assistance, or
(v)   the proposed development is in relation to a special event, as designated by Council by by-law or resolution.

Changing the zoning for a specific property (as opposed to an area-wide rezoning) can be of significant benefit to the landholder. Zoning can be considered a “social contract” and the elected officials are the protectors of that social contract. “Rezoning” to allow for greater height and density than permitted is like “a license to print money,” and can result in windfall profits for the property owner. The CAC appears to be a way for the developer to make a contribution back to the community in exchange for a modification in zoning (or more specifically, for a change to the Zoning and Development Bylaw).

The overall density of 17.5 FSR is very high and not currently permitted in the current Downtown District zoning. The FSR of 11 is the absolute maximum density that would be normally allowed under the zoning for this part of the downtown (11 FSR is also the most density allowed anywhere in the Downtown District). The current regime at City Hall has been approving ever-increasing densities for the downtown core. This topic of maximum density is another matter for a future post.

References

The following staff report was referred on February 3, 2015 to Public Hearing:
http://former.vancouver.ca/ctyclerk/cclerk/20150203/documents/p4.pdf

Further information on the rezoning application at 1070 – 1090 West Pender can be found on the city’s website:
http://former.vancouver.ca/commsvcs/planning/rezoning/applications/1090wpender/index.htm

Aside: Olympic VIllage story – Investors group acquires Olympic Village apartments (Bula, Globe and Mail, 20-Aug-2013), So who actually owns all that land at the Olympic Village? (Howell, Vancouver Courier, 2-May-2014), Large part of Olympic Village bought by Bentall Kennedy (News1130, 20-Aug-2013)1070 W Pender St report page 48

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