B.C. government’s warranty agency circulates hopes for ‘professionalization’ measures to reduce presence of ‘pickup truck’ builders

Bob Ransford
Sun

The home-building industry in B.C. is about to become more professional and that should be welcome news for anyone out shopping for a new home, and just about everyone else who lives with a roof over their head.

More than once in this column I have pointed out that anyone can become a home builder, without any mandatory qualifications.

A small number of very professional homebuilding firms in this province, who employ a whole range of qualified people involved in the design and construction process, build quite a number of the new homes.

But there are still “pickup truck builders” who may build two or three single family homes per year and are nowhere to be found after you have moved into your new home. They represent what the rest of the industry regards as the “black-market” building activity that gives everyone a bad name.

I’ve been an advocate for a higher degree of consumer protection for new-home buyers, simply because purchasers of many other products, from toys to automobiles, have more protection than what is offered to new- home purchasers who are entering into the single largest transaction most consumers make in their lives.

Finally, that is all about to change.

The Homeowner Protection Office (HPO) has recently floated a sweeping proposal to raise standards in the homebuilding industry.

This is the provincial agency created in 1998 to strengthen consumer protection for new homebuyers and help bring about improvements in the quality of residential construction after the leaky condo crisis. The legislation under which this agency operates offers mandatory warranty protection and some financial protection for purchasers of new homes and little else.

But the HPO has now recognized there is a glaring absence of any meaningful entry requirements for the homebuilding profession. The black-market builder is a problem for all of those trying to promote a reputable industry. Raise the bar to entry and you immediately enhance the reputation of those in the game.

There have been some great improvements in building science and technology since the leaky condo crisis, but the HPO admits that the many training and technical skills programs that exist in the industry are all voluntary in nature. There exists a patch-work of qualifications among the good builders and the fly-by-night builders can still operate out of the back of a pickup truck, so long as they have the financial capacity to qualify for warranty insurance.

The regulators also admit that the Homeowner Protection Act lacks the necessary teeth to respond to infractions and enforce regulations in the industry.

In an effort to “raise the bar”, the HPO has issued a discussion paper that proposes a whole range of new measures to make the industry not only look but also act more professional.

The HPO is recommending mandatory education for any homebuilder acting as a general contractor actually constructing a new home. Those with vast prior experience would need to demonstrate “measurable and relevant knowledge”.

“Vendor developers”, a term the HPO uses to refer to those developers who simply hire general contractors to build their product, would still need to be registered but would not have to meet the same knowledge assessment as general contractors.

Another new twist in the recommendations is mandatory registration for individuals building a new home for their own personal occupancy. This closes a loop-hole through which many pick-up truck builders have tried to skirt current registration requirements.

The HPO is also suggesting that it take on the responsibility for assessing the qualifications for licensing. Today, the only real qualification for licensing is decided by warranty providers who merely assess the financial ability of builders. The financial qualification requirement would remain, but a new point system would be established where the HPO would assess a builder based on things like technical expertise, business expertise, past conduct, and industry involvement.

The HPO is self-financing. Currently, licensing fees and a mandatory assessment on each new home constructed pays for the agency. This new more stringent licensing system will cost more to implement. The HPO is proposing to pay for this by imposing a new system of fines for infractions of the Homeowner Protection Act and also with a new fee for owner-builder registration.

The HPO wants to know what you think before they proceed with raising the bar in the residential construction industry. They are holding a series of public meetings across the province to discuss the proposals. The Vancouver meeting will be held on Monday October 17th. You can access the HPO’s discussion paper and details about the public meetings by clicking on “What’s New” on its websiten hpo.bc.ca

Bob Ransford is a public affairs consultant with COUNTERPOINT Communications Inc. He is a former real estate developer and a director of the Urban Development Institute – Pacific region. Email: [email protected]

© The Vancouver Sun 2005

Spinoffs from house sales boom

FIONA ANDERSON
Sun

 As the sales of existing homes continue to shoot up, so do the spinoff effects to the other parts of the economy as each sale generates, on average, almost $25,000 in additional spending, a report prepared for the Canadian Real Estate Association said.
   In British Columbia, that number is even higher — $27,873. And when the resale market is as hot as it is in B.C. that translates into a sizzling retail industry.
   Mark Startup, president and CEO of Retail B.C., said retailers have been feeling the effects of the fast-paced resale market for at least two or three years.
   “Furniture and appliance and consumer electronics and household-oriented retailers — increased activity in the home resale and home building markets have led in many months to double-digit sales increases in many of those categories,” Startup said.
   Between 2002 and 2004, the period reviewed in the report, the resale housing industry in Canada generated 120,000 jobs, one-third of them in the finance, insurance and real estate sector. The sales also fueled ancillary spending, including the purchase of furniture and appliances, moving costs, renovations, services and taxes, an average of $10.8 billion annually.
   In B.C., house resales generated an additional $2.5 million per year and created 18,050 direct and 9,670 indirect jobs.
   Between 2000 to 2002 each resale in Canada fueled an average of $19,760 in consumer spending and in 1991 to 1992, $16,200 was generated per sale.
   “The study shows the tremendous economic impact of the housing industry outside of the actual cost of the home,” CREA chief economist Gregory Klump said in a news release. “When Canadians move, they typically buy new appliances or furnishings, and renovate in various ways to tailor their home to their specific requirements.”
   Klump said that the study, originally carried out for the 1991 to 1992 period then repeated a decade later, will now be completed every second year to show the effect resales have on the economy.
   There is a widespread perception that new home construction has such a great economic impact, Klump said. Yet there are three times as many existing home sales as there are new homes constructed.

After months of delays, the Vancouver film fest’s home base downtown gets set to open

Tom Charity
Sun

Moving house is never easy, but when your new home has to be designed from scratch, pitched to corporate sponsors, overseen by city bureaucrats and ultimately justified to the tax-payers, then you might be forgiven for wondering why you got into this in the first place.

The last six months haven’t been easy for VIFF festival director Alan Franey. If everything had gone according to plan, he and his team would have been settling into their new offices at the Vancouver International Film Centre at Seymour and Davie in the spring, with the Vancity Theatre opening to the public some time in the summer.

Instead, building delays kept them out until late July. To make matters worse, when they did get in, the Telus lockout meant they were without phones or e-mail for nearly a week during a critical period for the festival.

As recently as the end of August, festival staffers hadn’t even been permitted entry to the theatre, where work continues apace to get everything ready for the festival’s trade forum, Sept. 28-30, and the first public screenings later that week.

As if all that wasn’t enough, Franey found himself smack in the middle of a Kafkaesque nightmare when the city declared a moratorium on corporate sponsorship of public buildings — specifically, permanent exterior signage along the lines of the controversial “TelusSphere” — some two years after he had inked an $800,000 deal with Vancity promising them just that.

That issue will not be resolved in time for the festival, although Franey is exploring what “wriggle room” there might be for temporary signage — a banner, perhaps? — to acknowledge Vancity’s generosity.

Yes, he has had sleepless nights over it, he tells me. “The timing is bad — and we have so many irons in the fire.” Yet he seems genuinely without rancour, and is at pains not only to praise “supportive, patient and cooperative” Vancity, but to express his gratitude to the city too.

His equanimity becomes easier to understand when he takes me for a tour of the theatre, which is a peach. The 175-seat capacity may not sound impressive, but the 33-by-19-foot screen is surprisingly large, and what the venue lacks in “techno Zen” (and junk-food outlets) it more than makes up for in comfort. Seats and legroom are strictly executive class. Projection and sound are state-of-the-art. Film buffs are going to find this place a home away from home.

Back in his office, Franey shows me the festival scheduling board. Not that you could miss it — the patchwork of multicoloured index cards takes up an entire wall. Dates run along the top, theatres (five this year with the addition of the Vancity) along the left-hand axis. Each screening gets its own card. Different program strands are colour-coded, and yellow and green stickers signify the print format and whether the filmmaker will be in attendance.

“We’ve spent a lot of time and money over the years trying to get a computer program to cope with the scheduling, but we’re still doing it by hand like this,” Franey says. “There are just too many imponderables. You can’t program a computer to identify a “Saturday night”-type film. You need to weigh how many seats a theatre has, where it is, when the print is available, if the filmmaker is coming — and you want to avoid clashes with films of similar appeal.”

It takes Franey and his programming team (PoChu AuYeung, Diane Burgess and Mark Peranson) about three weeks to get the schedule right. And if some mischief-maker stole into Mr Franey’s office and swapped the cards around? “Now it’s done we have it transferred to the computer,” he says with a smile. “Two weeks ago, that would have been a problem.”

VIFF is screening about 240 features this year, about the same as the Toronto International Film Festival if you exclude Toronto‘s retrospectives. Yet save for the Canadian titles and a handful of art-house heavyweights from Cannes, there is very little overlap between the two festivals. “Even if you look at Montreal, where they’re in this crazy position of having three festivals within a month, we have completely different films here. I’d say our lineup is as distinctive as it has ever been.”

Why do all Canada‘s film festivals come on top of each other?

“Because we’re all here to serve Canadian filmmaking, and it’s become a harvest crop. Films are completed in time for the fall festivals — to show to North American distributors in Toronto, and to open here before the end of the year to qualify for the Genies.”

He dismisses the inevitable comparison with Toronto, with its Oscar hopefuls and red-carpet premieres. “To complain that we’re not like Toronto would be like complaining that Canadians aren’t American. The only fair comparison you can make is between us and all the other North American film festivals because Toronto is unique.

“VIFF is here to show international films to the citizens of Vancouver. TIFF is a completely different animal, and much more a part of the Hollywood industry.”

VANCOUVER INTERNATIONAL FILM FESTIVAL FACTS AND STATS

Total number of films this year: 330

Total number of features: 240

Number of screenings: 567

Number of countries represented: 53

Number of world premieres: 8

Number of Canadian premieres: 59

VIFF attendance in 2004: 151,000

Cost of the new Vancouver International Film Centre and Vancity Theatre: $5 million

Number of seats in the Vancity Theatre: 175

Number of images of a Calgary realtor figuring in artist Donna Akrey’s mandala in the VIFC atrium: More than 1,000

Total number of films showing at the Toronto International Film Festival: 335

Total number of features at TIFF: 256

— Tom Charity

© The Vancouver Sun 2005

Bridge will connect 44-storey tower to trade and exhibition centre

Ashley Ford
Province

The last major development site on Vancouver‘s inner harbour has been acquired by Westbank Developments for construction of a major hotel-condominium project. The site, between the Shaw Tower and Burrard Street, will be one of the largest developments in the city at 800,000 square feet and cost approximately $500 million, sources told The Province yesterday. It is the final piece in the ongoing development of the convention centre and the redevelopment of Coal Harbour stretching all the way to the entrance to Stanley Park. The 44-story building is being designed by Vancouver architect James Cheng and will consist of 415 hotel rooms on the first 19 floors and a further 200 condominium units on the remaining upper floors. The glass-curtain wall building will rise approximately 140 metres, similar in height to its neighbour the Shaw Tower. Westbank applied for a development permit from the city earlier this week. Fairmont Hotels & Resorts issued a statement late yesterday indicating that it had a sale agreement with Westbank to develop the hotel-condominium complex, which it will manage. In essence, it will be the convention hotel for the new Vancouver Trade and Exhibition Centre now rising across the street from it. The two will be connected by a bridge that will run beneath Canada Place Way, also under construction. The hotel’s main entrance will be a shared plaza with the Shaw Tower. Westbank hopes to begin construction by July 1, with completion targeted for mid-2009 in time for 2010 Winter Olympics. Headquartered in Toronto, Fairmont is North America‘s largest luxury hotel management company. The firm grew out of a marriage between Canadian Pacific Hotels & Resorts and Fairmont Hotels which it acquired in 1999. Fairmont operates the Fairmont Hotel Vancouver, Fairmont Waterfront and Fairmont Vancouver Airport hotels. This latest success firmly establishes the Vancouver-based Westbank as one of the pre-eminent developers in the city. It currently has projects under way exceeding $2.8 billion in value, including redevelopment of the Woodward’s store site on the eastside and hotel/condominium Living Shangri-la, a 640-foot tower in the downtown core on West Georgia. It will be the city’s tallest tower when completed. © The Vancouver Province 2005

Fairmont plans 3rd downtown hotel Derrick Penner Vancouver Sun September 16, 2005 The development group behind the monolithic Shangri-La project, Shaw Tower and the ambitious Woodward’s redevelopment is now buying one of the last lots on Vancouver‘s downtown waterfront to build another luxury hotel and condominium complex. Fairmont Hotels & Resorts, owners of the property adjacent to the Vancouver Convention and Exhibition Centre expansion, said Thursday that it has struck a deal to sell the lot for $68 million to Vancouver’s Westbank Projects and Peterson Investment Group. Fairmont spokeswoman Laura Fairweather said Westbank plans to develop the site as a 43-storey, 800,000-square-foot mixed use tower with a 415-room, five-star hotel and 200 units of luxury condominiums. Fairweather, Fairmont‘s executive director of public relations, said the company has negotiated a contract to manage the hotel, which will be the company’s third downtown Vancouver property after the Hotel Vancouver and Waterfront Hotel, and its fourth in the Lower Mainland. Fairmont‘s corporate strategy, Fairweather added, is to divest itself of the real estate portfolio that the company inherited when it was spun off from Canadian Pacific and increase the number of hotel management contracts that it holds. Fairmont expects to earn between $30 million and $36 million from the deal, which is expected to close in November, 2006, with the hotel to open in 2009. In a news release, Fairmont CEO William Fatt said the new hotel will strengthen Fairmont‘s presence in the top segment of the hotel market in what he characterized as “a key gateway city.” Fairweather said the new Fairmont hotel will work cooperatively with its existing Vancouver properties. “We maintain a very positive outlook for the city,” Fairweather said. “Obviously with the new convention centre opening in 2008, we’ll have a good idea of the business on the books for that new facility, and with 2010 [Olympics] coming, there are going to be a lot of opportunities.” Westbank principal Ian Gillespie refused to comment on the deal Thursday. Westbank and Peterson Investment, however, are not unfamiliar with development in downtown Vancouver. Westbank developed the Shaw Tower, and is in partnership with Peterson Investment to build the 60-storey, 196-metre-high Shangri-La tower, which will be the cities tallest building. It will also house a five-star Shangri-La hotel. Fairmont is a leading owner and operator of luxury hotels and resorts. Its managed portfolio consists of 88 luxury and first-class properties around the world. © The Vancouver Sun 2005

Supply in some areas may outstrip demand

Fiona Anderson
Sun

The hot condominium market in the Greater Vancouver area is showing signs of stabilizing, which may mean good news for purchasers but bad news for developers planning to build in some over-supplied areas, an adviser with PricewaterhouseCoopers says.

The recent upward pressure on prices should ease as pent-up demand for condominiums is being exhausted, Neil Atchison said at a presentation of PWC’s Greater Vancouver Condominium Market Review Thursday morning.

Atchison said if he were in the market for a condominium he would wait 12 to 18 months before buying. At that time, when the new units are ready for occupancy, many of the investors may be selling.

“Our view is that the large leaps that have occurred over the last 24 months have probably been dissipating and that we will be looking at more normal, rate- of-inflation-type, price increases going forward, at least in the short term,” Atchison said.

Add to that the increasing number of condominiums coming onto the market in the next two years and that means more choice for purchasers.

“Particularly looking at the downtown, a sizeable number of those are investors and the question is are they flippers or are they long-term investors. If they are flippers there is going to be a lot of resale product on the market, there is going to be a lot more competition. There’s going to be choice.”

While supply is catching up with demand in many areas, the number of proposed units in Burnaby/New Westminster, which are grouped as one area in the PWC report, and Richmond, may actually outstrip demand and create an over-supply, the report said. In Burnaby/New Westminster, the number of projected units was five times more than what was necessary for normal growth.

But that’s only if developers follow through with their current plans, Atchison said.

While developers should rethink decisions to build in Richmond and Burnaby/ New Westminster, there are opportunities in the Port Moody to Maple Ridge area and in east Vancouver, where there is still unsatisfied demand, the report said.

Jennifer Podmore, of Vancouver-based MPC Intelligence, which has created an online subscription database that tracks condominium developments in the Vancouver area, agrees that east Vancouver and the Port Moody area are great places to develop. But she wouldn’t rule out Richmond, New Westminster or Burnaby yet.

“While there is a significant amount of development that’s going into the Burnaby/New Westminster area there is also a lot of demand for that area as well as a lot of demand for the Richmond market which is helping fuel the developers’ interests in those areas,” Podmore said in an interview.

© The Vancouver Sun 2005

Fiona Anderson
Sun

Sales of “luxury” homes in the Greater Vancouver area increased 18 per cent, from 627 to 739, in the first six months of this year compared to the same period last year, a Royal LePage Real Estate Services report released Thursday said.

The increase in the number of luxury homes sold — which in Vancouver is defined as over $1 million — is due to several factors, said Bill Binnie, owner of Royal LePage Northshore.

“There are a lot of people out there who have either done well in a previous home and they are moving up to what would be considered a luxury home with their equity,” Binnie said. “And there also have been people who have moved into the area that have brought wealth with them.”

Continued confidence in the economy also plays a role.

“People are saying ‘well okay, I’ve got confidence that my business is going to do well [or] I’m going to continue being employed, so we’ll take the big step,” Binnie said.

There are also people from outside Canada who think Vancouver prices are a steal.

“If you take a look at other cities on the Pacific Rim, like San Francisco, our prices are far less and people will move from those cities and see us as a bargain,” Binnie said.

Luxury homes were in high demand across the country with sales increasing more than 40 per cent, year-over-year, in the first two quarters of the year, the report said.

In oil-rich Calgary, luxury home sales, ($900,000 or more), tripled year-over-year during the period, with 110 units sold compared to 37 — more than were sold in all of 2004.

Sales of Toronto homes priced at $1.5 million or more jumped 48 per cent, year-over-year, in the first six months of 2005 to a historical high of 288 units from 195.

Sales of properties in the high end of the market in Winnipeg — those at $300,000 or higher — more than doubled.

Sales in Ottawa declined seven per cent for houses at $750,000 or more, while homes priced at $400,000 and up in Halifax increased by 46 per cent per year on average between 1995 and 2004 while overall sales grew by four per cent, the report said.

Meanwhile, the Vancouver real estate market set another record in August for existing home sales, a report by the Canadian Real Estate Association released Thursday said. Seasonally adjusted sales activity through the Multiple Listing Service recorded 3,800 sales in the Vancouver area, up 45.7 per cent from last August. Sales for the first eight months of the year were up 9.2 per cent over the same period in 2004.

“It is something we are seeing across Canada in that activity remains very strong. In fact many markets achieved record highs,” the association’s chief economist, Gregory Klump said.

Georges Pahud, president of the Real Estate Board of Greater Vancouver, said what is unusual is the volume in August, traditionally a slow month.

People believe in the market, Pahud said. Confidence in the economy and lower interest rates continue to have an impact.

Demand curve:
PricewaterhouseCoopers has analyzed where they see market demand versus planned condo supply.

© The Vancouver Sun 2005

‘Risky’ Woodward’s project gets approval

David Carrigg
Province

Vancouver council last night backed the redevelopment of the Downtown Eastside’s abandoned Woodward’s building despite a staff warning it is an “expensive and risky undertaking.”

Sam Sullivan was the only councillor who voted against the $280-million project — which is now $32 million over budget.

“It’s irresponsible to expose taxpayers to a multimillion-dollar risk,” Sullivan said.

The Woodward’s building, on the 100-block West Hastings, has been empty since the early-1990s.

It was bought by the NDP government in May 2001 for $22 million, after which several million dollars were spent on repairs.

In March 2003, the building was sold to the City of Vancouver for a basement bargain $5 million as part of a deal with the COPE councillor Jim Green to support the 2010 Winter Olympics.

Council believes the Woodward’s project will help revitalize the troubled Downtown Eastside.

The proposal is for 500 units of market housing in a 40-storey tower on the Cordova Street side of the property and 200 units of social housing on the Abbott Street and Hastings Street side.

There will also be a drugstore, child-care centre, Simon Fraser University satellite campus and space for non-profit societies.

Last September, council selected a consortium between Westbank Projects and the Peterson Investment Group to develop Woodward’s on the condition it included social housing.

The social-housing component has long been advocated by Green.

However, council was told last night that the cost of providing that social housing has jumped from $27 million to $48 million over the past two years.

Council then agreed to contribute $7 million to that increased social-housing cost, on the condition the federal and provincial governments agree to do the same.

The city will also chip in an additional $6.5 million to deal with other cost increases, creating a total commitment of $13.5 million.

Green said Sullivan did everything he could to stop the development and threatened to kill it if Sullivan’s NPA party got into power again.

“It’s expensive, there’s no doubt, but the financing is in place and the only risk is a political one — that the NPA will cancel the project if they get back into power,” Green said.

Sullivan has been challenging Green over the project since last year, when Green was appointed to the committee overseeing the project.

“I’ve always complained about him being on what should be a staff-only committee,” Sullivan said.

City council’s other NPA councillor, Peter Ladner, said he supports the project in principle but believes it needs to be scaled back.

“We are trying to do too much and aren’t willing to rein it in,” he said.

“For $13.5 million we could have a new library in Strathcona or could finish off the Renfrew Community Centre pool. We shouldn’t be covering the developers’ risk on Woodward’s.”

Sullivan said he expects the Woodward’s redevelopment will become a key election issue in the upcoming municipal election.

According to city staffer Michael Flanigan, the risks involved with the project are outweighed by the benefit the redevelopment will have for the Hastings Street corridor east of Main Street.

Green said he expects work to commence on the project by fall next year and it should be complete by the 2010 Winter Olympics.

© The Vancouver Province 2005

Ashley Ford
Province

A private Seattle-based real estate investment company has purchased the heritage Hotel Georgia and neighbouring development site on Howe Street for $65 million from Allied Holdings Ltd. of Vancouver.

Goodman Real Estate Inc. of Seattle, a specialist in heritage renovations, says it will bring a new design for a possible

50-storey mixed-use hotel and residential development to one of the downtown’s most prestigious property corners.

Steve Schnieder, spokesman for Goodman said in a phone interview from Seattle that the company already has property investments in Vancouver and says, “We really liked the location and, although it is a challenging site because of its tight confines, we intend to do it right and create a landmark for the city. It’s an important corner and we want to do it right.”

Schneider said the highrise will be completely redesigned and “we are not certain at this stage what will happen with the hotel, but we will probably complete its renovation.”

He said the company would like to get into the ground by the end of next year with the object of getting it completed in time for the 2010 Winter Olympics.

The property already has approved zoning for a 375,000-square-foot tower.

Jim Mouzourakis of NAI Goddard & Smith, who handled the sale, said there was a great deal of interest from many parties and, although a complex project, it was perfect for Goodman.

Bob Rennie of Rennie Marketing said it is an excellent location and comes with the highest density allocation for the downtown.

“But the developer is going to have to be extremely creative to build on such a restrictive site.”

Bing Thom, a well-known Vancouver architect, had designed a spectacular crystal tower for a parking lot adjoining the hotel for Allied.

© The Vancouver Province 2005

Goodman Real Estate plans to build a high-rise next to the historic building

Fiona Anderson
Sun

The historic Hotel Georgia in downtown Vancouver has been sold for a reported $65 million to Seattle developers that plan to build a 47-storey high-rise next to the existing hotel.

Goodman Real Estate Inc., along with an undisclosed partner, purchased the 12-storey hotel, built in 1927, along with the adjacent parkade, from Allied Hotel Properties Inc. and its majority shareholder, Allied Holdings Ltd.

Goodman representative Steven Schneider refused to disclose the amount, but said the $65 million reported earlier Monday was close.

The current plan for the property, which is still in the concept stage, is to dedicate the top 35 floors of a new complex to condominiums, with the use of the bottom 12 floors still to be determined, Schneider said.

Previous plans by Vancouver architect Bing Thom, while attractive, were unworkable, Schneider said, so Goodman decided to go back to the drawing board.

Developing the site will be challenging given that the Hotel Georgia’s facade and parts of its interior have historical designations, Schneider said. But that won’t deter Goodman.

“We like historic buildings. We recognize the value to the community [and] we think we do a good job of protecting them while making them viable,” Schneider said.

Goodman is eminently qualified for the task. A few years ago it purchased and developed the Dexter Horton building in Seattle, a building designed and built by the same people who built the Hotel Georgia almost 80 years ago.

But before shovel can hit dirt, Goodman has to work with the city to define what the project will be and Schneider expects that to be a year-long project. Goodman hopes to start building in early 2007.

“We’re excited about it. We like the property. We’re excited about being apart of the history of Vancouver with the Hotel Georgia. and hopefully we can develop that into something that’s worthy of that corner,” Schneider said.

Allied Hotel Properties will continue to manage the hotel on behalf of Goodman, Allied Hotel’s president Michael Chan said in an interview.

Chan said Allied Hotel was happy with the deal.

“We think [Goodman] will do a great job on the development of that site,” Chan said.

Allied bought the Hotel Georgia eight years ago for an estimated $45 million and has spent more than $10 million refurbishing the hotel since then.

The sale will enable Allied Hotel to repay approximately $42 million of debt, the company’s Management’s Discussion and Analysis for the six months ended June 30, 2005 said.

Goodman has been in the real estate investment business for 25 years in the U.S.

It is a partner in the Royal City Centre mall in New Westminster and the Boitanio Mall in Williams Lake, its first forays into Canada.

“We like Vancouver a lot,” Schneider said. “I think it’s a real solid economy. I think it’s got a good future.”

© The Vancouver Sun 2005

Francis Bula
Sun

Vancouver’s most ambitious urban-renewal project ever — the development of the former Woodward’s department store in the city’s troubled Downtown Eastside — is coming to council for final approval Tuesday, a year after the bid from a private developer was okayed.

The project is now 50 per cent bigger, at 1.1 million square feet, with a total price tag of $280 million, and a $32-million shortfall largely caused by the rising construction costs that are hitting hard everywhere.

Along the way, it has also gone through an extensive redesign process that will now see the project incorporate 200, instead of 100, social-housing units, add two new lots to the west, build two towers on the site instead of one, and include several urban plazas, along with the already-planned 500 condo units, SFU School for Contemporary Arts, commercial space, daycare space, and offices for non-profit organizations.

Woodward’s project manager Mike Flanigan warns in his report to council that the development “remains a complicated challenge in an environment of consistent and unprecedented construction cost escalation.”

Just over $22 million of the $32-million shortfall comes from the increased construction cost for the social housing and child-care space. As well, there are added costs for hazardous-waste clean-up that have appeared in the last year. The city is also stuck with costs for some infrastructure work.

Flanigan’s report says that staff thought the developer should have paid those costs, which Westbank Projects/Peterson Investment hadn’t included in its original bid.

But, he wrote, “it is the Woodward’s steering committee conclusion that the [shortfall] challenges are all of the project partners’ problems to solve collectively in order to move forward and achieve the public benefits council has envisioned.”

The provincial and federal governments have each committed $7 million more to cover the social-housing costs. Developer Westbank/Peterson has also agreed to put in $5 million. That leaves $13 million to be covered by the city.

Coun. Jim Green, who has worked for 20 years as a housing advocate, provincial government bureaucrat and city politician to redevelop Woodward’s, said the report brings together all of the complicated partnership arrangements for the building.

“If council approves this, we will know exactly what we are doing.”

Green also praised the partnership work that went into the project.

“This has worked so well — the free market, the unions, the non-profits, the developers, the city.”

The SFU board of governors still has to give its final approval for the 120,000-square-foot School of Contemporary Arts at a Sept. 29 meeting.

The city bought the site from the provincial government for $5 million shortly after the Coalition of Progressive Electors came into power in 2002. It will be selling the site to Westbank/Peterson for $6.3 million. It will get back a 31,000-square-foot space for city use.

© The Vancouver Sun 2005