Back in February, CityHallWatch wrote to Council to express a concern that the recommended sale of public land adjacent to 5025 Arbutus Street (2,736 sq. ft. of closed lane) for $1.1 million was significantly below market value. The letter included a comparison to another site near Dunbar and Marine Drive, also for rental building development, which had recently sold for one-third more at $225 per buildable sq. ft. compared to the $168 recommended for this sale.
At the subsequent Council meeting, the item was pulled from the consent agenda for Q&A with staff. Jerry Evans, Director Real Estate Services, stated that there had been an independent third-party appraisal for this sale, but provided no details. Council unanimously approved the staff recommendation for the land sale.
Four months later, the land sale has been completed and the development site has been consolidated into a single parcel. But it’s only now, in response to an FOI request, that the so-called “independent” appraisal has finally been released, allowing the public to view and critique it – too late to have any effect.
It’s not really an independent appraisal at all, since Real Estate staff gave specific instructions to the appraiser to ignore the rezoning in process and the resulting highest and best use of the land. As intended, this resulted in a low valuation as the basis for the sale.
The following passages of the appraisal make this clear (bolding emphasis from the original).
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p.1 Highest and Best Use
For residential purposes, pursuant to the applicable land use controls as per the proposed rezoning application received April 28, 2022. We have been asked to ignore the rezoning and value the subject site based on a RS-5 zoning, which restricts development to a maximum density of 0.75 FSR or 0.85 FSR for infill in combination with retention of a character house.
p.19
In April of 2022, a rezoning application was submitted for the larger subject site (2126 W 34th Ave, 5025 Arbutus St, & 2109-2129 W 35th Ave) to rezone the property to RR-2B (Residential Rental) district to permit up to a 5-storey apartment building where all units are secured as market rental; a floor space ratio (FSR) up to 2.4 and a maximum building height of up to 16.8 m (55 ft.). The application is being considered through the City’s Secured Rental Policy.
p.20
Conclusion
Based on the above, the highest and best use of the property is for residential purposes, pursuant to the applicable land use controls as per the rezoning application submitted in April of 2022.
I have been asked to ignore the proposed rezoning and value the subject site based on its RS-5 zoning, which restricts development to a maximum density of 0.70 FSR or 0.75 FSR to facilitate converting a character house to a multiple conversion dwelling, or 0.85 for infill in combination with retention of a character house.
p.42
The subject site has a good west side location, but this assignment requires that any additional density available through avenues such as the City’s Secured Rental Policy for Low-Density Transition Areas not be considered.
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The Analysis on pp.41- 42 most of which has been redacted, possibly includes further discussion of the constraints staff imposed on the appraiser.
It is extraordinarily unbusinesslike for a vendor to deliberately seek a low valuation to set the price for a sale of land. It is utterly incomprehensible in the current context of Vancouver’s tight finances, with the Council majority seeking all ways to increase revenues, including naming rights for public property.
We do not know whether Council is aware of how Real Estate staff obtain low valuations for the sale of public land to developers. We do know, however, that staff responsibility sits squarely in City Manager Paul Mochrie’s office, where Deputy City Manager Armin Amrolia also acts as General Manager, Real Estate and Facilities Management.
This suggests that any initiative for reform of the current approach of undervaluing City land for sale to developers would have to come directly from members of Council or possibly the Auditor General.
Following are links to two previous CityHallWatch articles about sales of City land to developers for less than market value, which also resulted from staff instructions to appraisers.
Link – https://cityhallwatch.wordpress.com/2024/02/25/appraisal-cressey-discount-1775e18th-conrad-renger/
Link – https://cityhallwatch.wordpress.com/2024/01/22/city-sale-vancouver-house-westbank-part2/
Robert Renger
2024 June
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Addendum
At the Council meeting Councillor Bligh specifically asked staff about the difference in land values per buildable sq. ft. for the recommended lane sale and the sale at Dunbar and Marine. Director Real Estate Services Jerry Evans responded that he didn’t have details of the other sale, but that the appraiser would have looked at comparables.
A forthright answer would have been that in staff’s view the other sale was irrelevant because their appraisal and recommended sales price were based on ignoring the proposed rezoning and redevelopment (valuing it solely on the existing RS-5 zoning). Obviously Evans’s reference to an “independent third-party appraisal” was also misleading, since staff had given the appraiser specific instructions to ignore the proposed rezoning and highest and best use of the land.
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ShapeYourCity – rezoning page – https://www.shapeyourcity.ca/5025-arbutus-st
CityHallWatch: Tools to engage in Vancouver city decisions 
this is exactly why the city can’t be trusted.
City Hall is corrupt as it gets. There should be an inquiry launched to get to the bottom of this. And all those involve terminated with cause and no severance etc.