A significant rental housing project in downtown Vancouver’s West End neighbourhood, which would have produced 276 purpose-built rental units, has been cancelled.
The high level of development fees that were saddled onto the project by the City of Vancouver forced project proponents Hollyburn Properties to withdraw its rezoning application for 1640-1650 Alberni Street, which would entail constructing a 385-ft-tall, 42-storey tower. Forty percent of the units would be suitable for families, with two or more bedrooms.
The site is currently occupied by the existing 14-storey, 66-rental unit Brockton House building, and the proposal included providing displaced residents with the first right-of-refusal on new rental units and various types of compensation for their relocation.
“It was largely approved, but there was a hiccup in the negotiations with the community amenity contributions (CACs) that Hollyburn was unable to come into an agreement with the City,” Hollyburn Properties spokesperson Olivia Brown told Daily Hive.
“And after that, the City decided that the highest and best value for the property would be to build luxury condominiums.”
However, the developer’s business model revolves around rental housing; it says it is not in the business of building luxury housing.
Hollyburn Properties subsequently listed the property for sale in October 2017, and it has since been sold for its luxury condominium redevelopment potential.
But they are unable to disclose the identity of the buyer at this time. According to BC Assessment, the property had an assessed value of $69.3 million in July 2017 – up from $34.7 million the previous year.
The rezoning application for the redevelopment was formally withdrawn in April 2018.
“It’s not really in Hollyburn’s best interest to sell property,” added Colleen Kae, the marketing manager for the company. “When it came down to the numbers, it was best for us to sell the property instead of rezoning and redeveloping it ourselves.”
They were also unable to share the dollar figure amount of CACs the municipal government was enforcing, but it was likely valued in the tens of millions given the size of the project and the site’s location bordering on Coal Harbour – right across from the White Spot site (sold last year to a Chinese company for $245 million) and the Chevron gas station site (sold in 2017 to Anthem Properties for $72 million).
But Hollyburn Properties says the sale of the development site has allowed the company to diversify its portfolio into different assets.
Earlier this year, it purchased the 10-storey office building at 1155 West Pender Street for $80 million, and this building is set to become their new head office in early-2020.
This is the third major application to be withdrawn in Vancouver this year due to reasons that relate to CACs, which goes towards funding municipal projects such as new parks, public spaces, community and recreational facilities, public art, social housing, and childcare.
In June 2018, after seven years of planning, the Kettle Boffo project on Commercial Drive was cancelled after the City requested an additional cash-only CAC of between $6 million and $16 million. This was on top of the $39 million in committed in-kind value CACs from a new and expanded drop-in facility for the Kettle Boffo Society and 30 homes of supportive housing for individuals with mental illness.
To fund these significant benefits, the developer was proposing to build a modestly-sized 12-storey building with 200 units of market housing and 18,000 sq. ft. of retail.
Then last month, the developer behind a 46-storey ‘flat iron’ tower at 1445-1455 West Georgia Street withdrew its rezoning application just days before it was scheduled to go through a public hearing for approval.
“We are not withdrawing the project from the rezoning process, we are only withdrawing our current application so that we can have a better understanding of the current changing market demands in relation to the current CAC valuation,” project architect James Cheng previously told Daily Hive.
Daily Hive has reached out to the City of Vancouver for comment on the withdrawal of the application of 1640-1650 Alberni Street.