City of Vancouver Inflates Density Bonus Contributions & CAC rates

The City of Vancouver is about to implement their annual inflationary adjustment to Density Bonus Contributions and target rate CAC’s. The density bonus contributions are basically CAC’s that are specifically intended for density bonuses associated with conditional zoning in a small set of pre-planned areas including: Mount Pleasant, Joyce Collingwood, Marpole and Norquay. 

The target rates for density bonus contributions in these areas are proposed to increase by 11.9%, and will become effective on September 30, 2017. The Mount Pleasant I-1A and I-1B zones are not being adjusted for inflation this year because these areas were only established as new density bonus zones in 2017.

DBCs 2017

For CAC’s the increase is at the same rate, with updated rates as follows:CAC Rate 2017

Expect even further updates to CAC target rates coming in late 2017 and early 2018 as the City of Vancouver seeks to “align with the updated needs identified in the Public Benefits Strategy.”

A full copy of the Policy Report on Density Bonus Contributions can be viewed here: http://council.vancouver.ca/20170725/documents/p8.pdf

The Policy Report on CAC’s is located here: http://council.vancouver.ca/20170726/documents/pspc5.pdf

False Creek Flats Plan Nearing Final Approval

Next week the False Creek Flats Plan goes to Vancouver City Council for final approval of the draft. The plan encompasses 450 acres of land anchored by the future St. Paul’s Hospital and new Emily Carr campus.

FCFPThe False Creek Flats Plan planning process was originally launched two years ago and is now in final draft form after various stages of public input.

Here are a few details:

Existing Zoning

FCFP_1The Plan seeks to divide the plan area into four distinct sub-areas, as follows:

FCFP_2Health Hub

This area will be the main focus of development change; centered around the future St. Paul’s Hospital and will include uses that support health care and job space, as well as some new residential space.

Creative Campus

This area is located around three rapid transit stations and will be predominantly an employment area with some limited residential uses.

Terminal Spine

This area will see some modest density increases, but limited to industrial and employment uses.

Back of House

This area will continue to remain light industrial uses with a focus on food economies and a move away from low-employment uses like auto dealers and mini-storage.

For further information, take a look at the draft of the Plan here: http://council.vancouver.ca/20170517/documents/cfsc1-AppendixA-FalseCreekFlatsPlan.pdf

Top 10 Land Deals of 2016

Residential development site sales in Metro Vancouver topped $4.5 Billion in 2016. It’s a staggering value only made possible by the confluence of a variety of local and international market forces including: incoming capital, a feverish residential real estate market, and a perceived lack of quality land available for sale. Each of these factors seemed to create the perfect storm in late 2015 and early to mid-2016 and have played a large part in driving land values to record highs.

To put the year we’ve had into perspective, the total land transaction value for 2016 almost matches the previous two years combined ($2.5B for 2015, $2.4B for 2014).

Here is a brief look at each of the 10 largest land deals of 2016:

#1 – Oakridge Transit Centre, 949 West 41st Avenue, Vancouver

OTC_3Price:                   $440 Million

Site Area:            13.8 acres

Vendor:                Translink

Purchaser:          Intergulf Developments / Modern Green Development

The goods:         This was by far the biggest land deal of the year – though the deal is structured to be paid over five years. The former bus barn site was declared surplus land several years ago by Translink and the City of Vancouver initiated a planning policy for the site and surrounding area in 2014. The planning policy was approved in December 2015 to allow for over 1,265,000 SF of density in several low and midrise buildings.  

Shortly thereafter the “OTC” site was marketed by Cushman Wakefield. The site secured offers from 14 potential buyers in the spring of 2016 and was ultimately sold to a partnership between Intergulf and Modern Green Development.

A listing video overview can be viewed here: https://youtu.be/GILwlBuOBRQ


#2 – Pearson Dogwood Lands, 650 West 57th Avenue, VancouverPearson_5

Price:                  $299.6 Million

Site Area:            25.4 acres

Vendor:                Vancouver Coastal Health

Purchaser:          Onni

The goods:          This prime site at Cambie and 57th was sold by Vancouver Coastal Health in 2014 as part of a phased deal with Onni. The bulk of the sale formally completed in March. A formal rezoning application has now been submitted which contemplates over 3 Million SF of density, to be completed in five phases with over 10 towers, several mid-rises and a future Canada Line Station. The deal includes replacement of existing VCH facilities on-site.


#3 – Molson Brewery Lands, 1550 Burrard Street & 1655 West 1st Avenue, Vancouver

Price:                  $185 Million

Site Area:            7.7 acres

Vendor:                Molson Coors

Purchaser:          Concord Pacific

The goods:          Though not the largest deal of the year, this one certainly generated a lot of buzz in the marketplace, and is the only sale on this list that is not a residential land sale – at least based on current zoning policy. The sale closed on March 31 after being listed by Simon Lim of Colliers in 2015. The site is currently zoned M-2 which only allows for manufacturing/industrial uses and is still occupied by Molson on a leaseback basis until their eventual move. Details remain scarce on Concord’s future plans for the site, though it will almost certainly include a substantial commercial component.


#4 – 1444 Alberni Street & 740 Nicola Street

Price:                  $170.1 Million

Site Area:            43,300 SF

Vendor:               Wall Financial

Purchaser:          Landa Global/Asia Standard

The goods:          This full city-block located in the West End of Downtown Vancouver was redesignated as part of the West End Community Plan, adopted in early 2014. The site is currently improved with an office and apartment tower built in the 1970’s. Wall had acquired the site in March 2014 for $83.5 Million and subsequently sold through Simon Lim of Colliers after a bid process in late 2015. The sale closed in April 2016. It is expected that the property will be completely redeveloped with two 40+ storey condo towers.


#5 – Brighouse Square, 6340-6390 No. 3 Road, Richmond

Price:                  $73,500,000

Site Area:            3.6 acres

Vendor:               Sanna Enterprises

Purchaser:          YYH Development Ltd.

The goods:         Brighouse Square is a retail strip plaza at No. 3 Road and Cook Road across from Richmond Centre. The site sold as a potential future residential development play in May 2016 to a Chinese development group. It had been designated as ‘Urban Core T6’ in Richmond’s City Centre Plan to allow for mixed residential and retail. Simon Lim of Colliers acted as the broker in the off-market deal.


#6 – 1745 West 8th Avenue, Vancouver1745 West 8th Avenue

Price:                  $70,000,000

Site Area:           56,550 SF

Vendor:              CIBC

Purchaser:          Delta Land

The goods:         Our team marketed and sold this C-3A zoned, Fairview office building/development site on behalf of CIBC in late 2015, with the sale closing in February 2016. The site achieved 9 offers, with the successful buyer being Delta Land Development. CIBC is leasing the property back until mid-2017 after which time Delta will likely release plans for the property.


#7 – 1059-1075 Nelson Street, Vancouver

Price:                 $68,000,000

Site Area:          17,292 SF

Vendor:              Suncom

Purchaser:          Shan Gao

The goods:         In one of the more interesting sales in recent Vancouver history, this assembly of two non-descript walkup apartment buildings sold three times in just under two years in a series of events documented by Ian Young. Our team acted for Wall Financial in the original assembly and subsequent sale in January 2016. The site flipped in February 2016 for $68,000,000 to a Chinese buyer who remains generally unknown to the market.



1070 - 1080 Barclay_Sold#8 – 1070-1080 Barclay Street, Vancouver

Price:                  $59,000,000

Site Area:          17,292 SF

Vendor:              Two Private Local Investors

Purchaser:         Bosa Properties

The goods:        Just across the lane from #7 on this list, this assembly of two apartment buildings was listed by our team in late 2015 and sold after multiple offers to Bosa Properties. The site was also re-designated in the West End Community Plan to allow for towers up to 550 ft. (subject to shadowing). Bosa also secured the neighbouring strata building at 1060 Barclay. The deal closed in February 2016.


propertyfile-ashx#9 – 1818-1862 West Broadway, Vancouver

Price:                 $56,250,000

Site Area:          37,500 SF

Vendor:              Private Local Investors

Purchaser:         Suncom

The goods:        This assembly of lots on West Broadway near Burrard Street was sold by our team in September 2016. The assembled site comprises 300 feet of frontage and the existing C-3A zoning allows for up to 3.0 FSR residential with retail.


asdfas#10 – 1810 Alberni Street & 703-751 Denman Street

Price:                 $55,000,000

Site Area:          17,292 SF

Vendor:              Local Investor

Purchaser:         Landa Global

The goods:        This West End development site was sold by the Simon Lim team in September 2016 after a listing process. The Property is currently zoned C-5A (West End Commercial), which provides for 2.20 FSR with potential to increase density to 7.00 FSR, and by heritage density increasing up to 7.70 FSR. It is situated in Lower Robson Area A of the West End Community Plan – designation consistent with the amended C-5A Zoning (no rezoning required).


Honourable Mentions:

Below are a couple of notable transactions that formally closed in 2016, but we are not including as they aren’t technically relevant sale deals for the purposes of this analysis.

  • 508 Helmcken Street – this site, more commonly known by its project name “8X on the Park“, is part of a land exhange that was negotiated back in late 2012 with the City of Vancouver. The completion of the Jubilee House social housing replacement project triggered the land exchange so that Brenhill Development can move forward with the construction. The sale value was $83,500,000.
  • 1166 W Pender_Sold1166 West Pender Street – our team acted in this $71,400,000 sale, closing in April 2016. The site is currently improved with a 15-storey office building that the Purchaser, Reliance Properties, intends on redeveloping, though we have not considered it a pure land play as with the transactions above.

Some notes from the above list:

  • 9 of the 10 largest land deals in Metro Vancouver took place in the City of Vancouver
  • 8 of 10 were sold by market bid process (the other 2 were ‘off-market’)
  • 3 of 10 were bought by well-established ‘local’ development groups, the other buyers were offshore or ‘new-entrant’ development companies
  • 8 of 10 will require a rezoning process before development can occur

New Metrotown Downtown Plan Draft Released

The City of Burnaby has released a draft of the new Metrotown Downtown Plan, to be considered by City Council prior to adoption. The new plan comes after years of anticipation of finalizing planning efforts in Metrotown, which has seen rapid redevelopment following the City’s revision of the four town centre areas several years ago, and the creation of the ‘s’ zoning designation in 2010 that facilitated many of the highrise rezoning applications that have occurred in the past five years.

metrotown-planThe Metrotown Plan was originally drafted in 1977 and has been amended many times since. Planning efforts have been ongoing but the formal planning process got underway in the spring of 2016 with a draft report on the proposed changes in the plan area. The new plan seeks to designate Metrotown as the true core of Burnaby’s four town centre areas; essentially calling it Burnaby’s Downtown.

Core principles in the plan include:

  1. Creating an Official Downtown
  2. Establishing Neighbourhoods and Community
  3. Providing Greater Connectivity
  4. Enhancing the Public Realm
  5. Providing New Amenities

Of primary interest to those in the development industry are the proposed updates and changes to the land uses within the plan area.The changes will create some new density, but more importantly will clarify potential zoning and urban design possibilities in some of the peripheral areas of Metrotown that had been in limbo for several years. The plan also shapes potential large-scale rezonings in the core area for big sites along Kingsway.

The general land use map and zoning designation framework is included below (click for greater detail):

metrotown-plan_1metrotown-plan_2

Other highlights:

  • high density mixed-use sites will require a minimum site area of 1.5 acres and will require a minimum commercial use of 1:3 per residential uses. (1 commercial SF per 3 residential SF)
  • Core downtown sites with RM5s/C3 designation allowing density up to 11.0 FAR
  • Large scale sites such as Metropolis at Metrotown, Sears, Old Orchard Shopping Centre and Plaza 5000 will require Master Plans prior to rezoning enactment
  • Sites in the Maywood area (south of Beresford), subject of rampant speculation over the past few years, will become a mix of RM5s and RM4s, allowing heights of 12-30 storeys South of Beresford, and 4-storeys along Imperial
  • new highrise opportunities North of Kingsway between Boundary and Halley Avenue
  • the creation of Central Boulevard as an ‘entertainment and garden street’ with new retail opportunities
  • a significant new open space in a redeveloped Metrotown Mall site
  • minimum frontage of 200 feet and minimum site area of 24,000 SF for a single tower project
  • minimum frontage of 400 feet and minimum site area of 48,000 SF for a two tower project (minimum 80 foot tower separation)
  • 6 ft minimum front and side-yard setbacks for commercial/mixed-use developments, and 15 ft front and side-yard setbacks for residential developments
  • larger floorplates for residential buildings over 50-storeys only (8,100 SF max floorplate) – office towers exception

The plan does not contain a unique set of community benefit policies. The City of Burnaby’s Community Benefit Bonus Policy would apply to any rezoning being brought forward.

The full draft of the Metrotown Downtown Plan can be downloaded here: https://burnaby.civicweb.net/filepro/documents/?preview=16934

Market Spotlight: Burnaby Rezoning Applications

A number of rezoning applications head to Burnaby City Council this week. Below is a brief summary of some of the larger projects planned.

4460-4482 Juneau Street

4460-juneauSolterra owns this three-lot assembly of older M1 zoned industrial buildings along Willingdon Avenue at Juneau Street in the Brentwood area. The plan for the site is a 25-storey tower with townhouses under the RM-4s designation. There is a 23-storey tower just across Juneau Street at second reading.


6525-6585 Sussex Avenue

6525-sussexThe plan for this 57,116 SF Metrotown site at Sussex and Beresford is for a mixed-use high-rise and low-rise market residential apartment building including retail and office uses. The project will also include a separate non-market housing building developed in conjunction with B.C. Housing. The proposed density is 5.0 FAR per the RM-5s and C2 guidelines. The site was acquired by Thind Properties in May 2016 for $32,680,000.


7422-7470 Buller Avenue

7422-bullerThis 132,000 SF site is currently occupied by a multi-tenant warehouse building and is located next to a section of former rail line in the Royal Oak area. The site is designated for medium-density residential development, and the application is for a mix of stacked-townhouses and traditional townhomes with full underground parking to a density of 1.1 FAR.


5180 Lougheed Highway

5180-lougheedAnother highrise condo tower is being planned for the Brentwood area; this one at the corner of Lougheed Highway and Springer Street. The 51,204 SF site is currently occupied by two older industrial buildings owned by Beedie Living. The plan calls for a 269,000 SF tower with 250 to 300 residential units. The concept includes “breaks” throughout the building to add visual interest to the massing and scale of the tower.

Market Update: City of Vancouver Adjusts DCL & CAC Rates

Next week the City of Vancouver will consider recommendations to revise DCL and CAC rates. This comes following a decision earlier this year to allow increases to CAC (Community Amenity Contribution) target rates that did not have an inflation mechanism similar to Development Cost Levies (DCL’s – which allowed inflation starting back in 2009). The intent of the increase rates is to keep revenues in line with inflation in property values and construction costs.

DCL Rate Adjustments

The City currently has a City-wide DCL District (which accounts for the majority of land area and development in the City). The proposed 4.6% annual inflationary rate adjustment would result in the following rate changes:
  • $0.60 per SF increase for higher density residential (>1.2 FSR) and commercial developments;
  • $0.20 per SF increase for industrial development; and,
  • $0.14 per SF increase for lower density residential (≤1.2 FSR) development.
  • For residential and commercial development over 1.20 FSR, the DCL rate equates to $13.91 per SF

DCL Target Rate Adjustments

For CAC Targets, the proposed inflationary increase includes a one-time catch-up for inflation not captured since target rates were first established. In the case of Southeast False Creek, the adjustment extends back to 2007 while in Little Mountain Adjacent, Norquay and Cambie the adjustment extends back to 2013, and in Marpole the adjustment dates back to 2014. The magnitude of the rate increase which includes the one-time rate catch-up ranges from 8% in Marpole, 11% in Cambie Corridor, Norquay and Little Mountain Adjacent, and 25% in Southeast False Creek ( as previously noted, the % increase is much higher in areas where the catch-up period is longer).
dcl-cacThe changes come into effect September 30th, 2016.

City of Vancouver Preparing Plan for False Creek South Land Leases

The City of Vancouver Council will receive a staff report this week providing an update and high-level strategy to deal with the long-term land leases covering much of the False Creek South neighbourhood. What will likely follow is a multi-year planning process that will pave the way for redevelopment of some portions of the land.

False Creek South covers 136 acres extending along the waterfront from the Burrard Street Bridge to the Cambie Street bridge (excluding Granville Island), and it includes 23 acres of parks. About 80% of the land is owned by the City and was developed primarily in the 1970’s as either market strata, rental apartments, or co-ops.

FCS

Most of the housing on City-owned land are on ground leases, the majority of which are set to expire between 2036 and 2046 (with one co-op expiring as early as 2022. This includes 669 residential strata units and 48 commercial strata units.

FCS_1 FCS_2

The City is now proposing to work over the balance of 2016 to establish a foundation before a new community plan is developed in the coming years. Overall work includes:

1. Lease-end Payment Methodology
City staff continue to work with the provincial government and to consult with False Creek South strata leaseholders to clarify the methodology for determining the fair market value of each strata leaseholder’s interest in the strata lot upon expiry of the strata lot lease.
2. Co-op and Non-profit Residential Leases
The GM, Community Services report back to Council in Fall 2016 with a timeline for negotiating False Creek South co-op lease renewals in context of a broader non -market housing end- of-lease strategy framework.
3. Landowner Due Diligence
In its role as the major landowner in False Creek South, the City will evaluate the costs, benefits and implications of various renewal, extension and redevelopment options while recognizing the importance of providing certainty for leaseholders.
4. Affordable Options to Remain in Neighbourhood
City staff work with the False Creek South Neighbourhood Association, to explore affordable housing options for False Creek South residents to remain in the neighbourhood, in line with the City’s affordable housing policies and programs.