Chinatown developer suing City of Vancouver over rejection

Artistic rendering of the December 2016 revised design for 105 Keefer Street, which was rejected by Vancouver city council. (Beedie Development Group)

The saga over the contentious proposal to redevelop the vacant ground-level parking lot site at 105 Keefer Street in Vancouver’s Chinatown district is now continuing as a matter before the court, nearly two years after the City of Vancouver’s Development Permit Board (DPB) rejected the development application for the project.

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A landmark lawsuit by local developer Beedie Development Group against the City of Vancouver was filed in the Supreme Court of British Columbia on August 16, 2019, and it accuses the DPB and city staff of overreaching beyond their jurisdiction — contravening the city’s own bylaws and protocols — in its refusal to grant the project a development permit, effectively acting in bad faith and violating private property rights.

“The administrative process and its outcome were neither legal, nor reasonable, nor fair to the petitioner,” states the suit. “The discretion was neither exercised quasi-judicially by the application of objective standards.”

The developer is now asking the court to overturn the rejection and grant the development permit sought for the project, or force the city to provide the specific changes to the proposal that allow for a development permit to be granted. The city is also being asked to cover costs.

Street view of the undeveloped lot at 105 Keefer Street in Vancouver’s Chinatown. It is used as parking only. (Google Maps)

Following city council’s June 2017 rejection of a rezoning application that pursued a taller building of a height of 120 ft with 12 storeys, containing 111 market residential units, 25 social housing units, and ground-level retail, the developer decided to pursue a development application with a downsized proposal that fit within existing zoning.

The project’s scaled-back fifth design — 90 ft with nine storeys — was accomplished by removing the entirety of the social housing units. As this was a development application, which does not require a public hearing, differentiating from a rezoning, the project was now a consideration of the DPB, and not city council.

But on November 6, 2017, the project was rejected 2-1 by the DPB’s members, with deputy city manager Paul Mochrie voting in support, and chief city planner Gil Kelley and engineering general manager Jerry Dobrovolny voting against.

This was unprecedented in the City of Vancouver’s recent history, apart from the 2006 rejection of the development application for 2995 Wall Street, which was deferred.

The proposal’s design, reviewed by city staff prior to the DPB submission, was approved by the city’s Urban Design Panel unanimously.

“Due to the intensive process of vetting by city staff, the Urban Design Panel, and the Development Permit Advisory Panel to ensure compliance with all appliance by-laws, policies, and guidelines, there had not, in recent memory prior to the DP Board’s refusal which is the subject matter of this Petition, been a single instance of outright refusal of a DP application,” reads the suit.

“Minutes of the hearing Application on November 6, 2017, reflect that city staff reviewed the reasons that both City Staff Committee and the Urban Design Panel had recommended the Application for approval subject to specified conditions, in accordance with the Protocol. City Staff further advised that, in their view, the application was in compliance with existing laws, policies, and guidelines.'”

‘Gross procedural unfairness’

The suit highlights meeting minutes that note Mochrie’s concerns during deliberations that the DPB was considering factors that were outside its jurisdiction, and acknowledged the panel’s “responsibility to oblige the existing laws.”

But it laments the position of Dobrovolny, who expressed the exterior design “has not fully satisfied the designed guidelines,” without specifying “which guidelines he referred to, nor, in what respect he considered there to have been non-compliance.”

According to the developer, the design was modified with the input of city staff, “expressively to ensure compliance with the provisions of all relevant guidelines,” suggesting the proposal would not have reached the DPB for consideration had city staff been unsatisfied with the extent of the changes.

As well, the developer took great issue with Kelley’s comment that the project proponent was entitled to “amend its application to address the issues that have come up.”

The suit alleges this amounted to the creation of a “false rationale… in full knowledge that there is no such thing as an ‘amended application’ and the extent of any proposed changes coupled with the Downsizing Initiative effectively precluded a new development permit application from being filed under” the zoning policies for Chinatown at the time.

In response to activist and community outcry over 105 Keefer Street, city council in July 2018 reversed its 2011 Chinatown Historic Area policies allowing for taller buildings in the district. The scope and height of buildings in the area were downsized, including a significant reduction in allowances for the 105 Keefer Street parcel.

“The lack of specificity means that the decisions was not being made on a quasi-judicial basis through the application of objective criteria but rather, contrary to law, ‘based upon the likes or dislikes of individual [board] members who are [appointed] from time to time,'” reads the suit, adding that the DPB and city staff, despite persistent requests, were allegedly unwilling to provide sufficient direction towards the creation of an acceptable design in the aftermath of the rejection.

“Furthermore, the DP Board’s reasons without any specificity of direction did not clarify what should be done for any new DP Application to succeed to ‘address the issues that have come up.’ Even in the absence of the Downsizing Initiative, both the petitioner and city staff would then be put in the position of having to guess wildly at what the DP Board might have considered acceptable from a design perspective and be put to the time and considerable expense of preparing a new application ‘in the dark.’ The result was gross procedural unfairness to the petitioner.”

Precedent, the suit states, has been set in similar legal cases in 1997 and 2009 in other BC municipal jurisdictions, with the provincial courts siding with the complainant and petitioner on the arbitrary nature of the respective municipal decisions.

City acted in ‘bad faith’ in failed land swap negotiations

In the controversy’s aftermath, both city staff and the developer “explored options in a collaborative attempt to compensate for the loss” from the DPB’s rejection and city council’s subsequent downzoning of Chinatown.

The developer’s lawyers, in the suit, indicated there were “many” meetings and discussions with city staff “with a view to reaching [a] mutually acceptable land swap deal” — a scenario where the city would own the highly-sensitive 105 Keefer Street property, and the developer receiving one of the city’s properties of the same value in exchange.

“As part of these discussions the city commissioned appraisals of the property and of potential swap sites for which, the city advised, it wished to designate its own selected appraiser. The petitioner agreed,” the suit continues.

“Upon receiving and reviewing the appraisals in draft the petitioner was optimistic that a land deal could be reached, and continued to negotiate in good faith based on the values therein.”

But then in September 2018, the developer alleges the municipal government “suddenly” decided that it would only permit a land swap based on an assessed value 105 Keefer Street, if it were designated only for use as a lower-value social housing redevelopment.

“The city’s position was in bad faith, and not based on any zoning applicable to the property” or any previous or current policies relating to zoning in Chinatown, asserted the suit.

“By the outright rejection of the application, the petitioner has suffered and will continue to suffer serious hardship by reason of the inability of the petitioner to make effective use of the property, monies thrown away in consulting fees and other professional costs as well as internal staff costs, and losing the opportunity to develop the property in accordance with the zoning in place at the time of the DP Application,” the suit added.

None of the lawsuit’s allegations have been proven in court, and the municipal government has yet to file its response.

BC Assessment’s July 2018 assessed value for 105 Keefer Street’s two-parcel, 18,300-sq-ft lot is about $21 million.

Decisions made in a climate of hostility

The developer also provided context over the “very politically charged environment” of the project’s public consultation, suggesting this influenced the DPB’s decision that allegedly contravenes city by-laws and protocols.

City council’s rezoning public hearing for the project attracted nearly 300 public speakers, who expressed their opposition to the permitted developments under then-existing zoning, and their opinion that there should be no further development on the vacant lot or any other property in Chinatown.

The suit described one of the public open houses for the rezoning application, organized by the municipal government in September 2017, in the following way: “The charged environment evident during the Prior Rezoning Application continued throughout the proceedings related to the application. At the Open House, members of the public entered and vandalized the Open House boards and building model.”

Members of the public were also invited again to speak on the application in the DPB hearing on October 30, 2017, with many opponents expressing the same disagreements and opinions that were outside of the DPB’s mandate:

Disagreement with the existing zoning
The desire to impose a social housing requirement for the property
Perceived impairment of the potential UNESCO designation
‘Threat of gentrification of Chinese people of working class in the neighbourhood’
Desire to convert the property into a historic site
Concerns that the government does not listen to people of Chinese descent
Urging that construction ‘be pursued at another site’
The opinion that ’50-100% of the site’s housing should be devoted to seniors housing’
The opinion that the proposed number of floors was excessive
The opinion that the site will ‘set back food security’ and the intended units will be unaffordable to local residents
The opinion that new local businesses ‘rob the low income community of their dignity’
The opinion that the DPB lacked representation from the Chinese community
The opinion that the project is ‘a white supremacist project’ and ‘part of a larger issue of development and colonization’
The opinion that the proposal is a threat to the right and safety to a home in the neighbourhood’
The opinion that the ‘apparent lack of concern from the city [in the context of] language barriers that took away the right of the community to participate’

Previous designs

August 2015

August 2015 revised design for 105 Keefer Street. (Merrick Architecture / Beedie Development Group)

April 2016

April 2016 revised design for 105 Keefer Street. (Merrick Architecture / Beedie Development Group)

December 2016

Artistic rendering of the December 2016 revised design for 105 Keefer Street, which was rejected by Vancouver City Council. (Merrick Architecture / Beedie Development Group)

November 2017

The new design that was recently submitted as a development application to the City of Vancouver. Three floors have been removed to reduce height, sacrificing all social housing. (Merrick Architecture / Beedie Development Group)

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