Cost escalation leads to design changes for rentals at Royal Oak SkyTrain

Cost escalation leads to design changes for rental towers at Royal Oak SkyTrain

Artistic rendering of the 2023 revised design for 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

BC General Employees’ Union (BCGEU) has identified a path forward to realize its mixed-use development of building secured rental housing projects and the organization’s new office space amidst skyrocketing construction costs due to rampant inflation.

Their rezoning application for the project at 6877-6945 Palm Avenue — immediately adjacent to SkyTrain Royal Oak Station — was approved by the previous makeup of Burnaby City Council in April 2022.

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The project as originally envisioned calls for two secured purpose-built rental housing towers above BCGEU’s new offices, as well as a cafe and a childcare facility. The towers will reach a height of 214 ft with 20 storeys and 189 ft with 15 storeys.

There would be a total of 292 rental homes, with half of the units at rental rates below the market median rate.

Previous 2022 approved design:

6877-6945 Palm Avenue Burnaby Royal Oak BCGEU

2022 artistic rendering of 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

Revised 2023 design:

6877-6945 Palm Avenue Burnaby BCGEU Royal Oak Station SkyTrain 2023

Artistic rendering of the 2023 revised design for 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

Since then, according to a new City of Burnaby staff report, the “market conditions have changed, and financing construction costs have escalated significantly,” and “the original design intent and non-market affordability considerations which were presented at [a] public hearing are no longer economically feasible without modifications to the project.”

It is estimated home construction costs in Canada escalated by 51% between early 2020 and Spring 2023, with most of the cost escalation occurring since Spring 2022 when the BCGEU project reached a public hearing. Furthermore, builders and developers are finding their construction financing options increasingly strained by the Bank of Canada’s decision to continue increasing their policy interest rate.

The union is returning to the municipal government with a revised design concept in order to produce “reduced costs and the ability to meet the stated [housing] affordability targets.”

Overall, the project has now been scaled back, with the most significant change being the complete elimination of the four-level rental housing base podium connecting the two towers above the office space. These base podium levels held 34 rental homes in the previous design.

Previous 2022 approved design:

6877-6945 Palm Avenue Burnaby BCGEU Royal Oak Station SkyTrain 2022

Original 2022-approved design for 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

Revised 2023 design:

Revised 2023 design for 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

However, the total number of homes and mix will be the same as previously, accomplished by converting amenity spaces into residential uses. This includes converting most of the double-height fitness gym on the fourth level of the small tower into two levels of residential uses, which results in a floor increase for the shorter tower, now 16 storeys instead of 15 storeys.

As well, the taller tower’s terraces on levels 18 and 19 will now be replaced with residential uses.

Other design changes include reducing the footprint of the commercial office link between the commercial podium and the taller tower, and increasing the building heights slightly to accommodate infrastructure and the enhanced livability of the homes.

There is a reconfiguration of the building’s floor spaces, but the overall total floor area will decrease very slightly to just over 300,000 sq ft.

Layout of the 2023 revised design for 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

Artistic rendering of the 2023 revised design for 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

Furthermore, there will now be three underground levels, accompanied by a substantial reduction in vehicle parking stalls — from 375 vehicle parking stalls in the previous design to 265 vehicle parking stalls in the revised design, including 128 stalls for residents. The number of secured bike parking spaces remains the same at about 600.

To compensate for the reduced vehicle parking capacity, the project has added various transportation demand measures, such as providing a two-zone monthly transit pass and car share memberships for all homes for two years.

Other modifications relate to minor design changes to the exterior facade.

Artistic rendering of the 2023 revised design for 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

Artistic rendering of the 2023 revised design for 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

City staff have endorsed the revised design without having to repeat the public hearing process as the project still provides the same affordable housing component, it is a transit-oriented development, and there are no changes in uses or an increase in density.

BCGEU acquired the land assembly in 2019 and submitted the rezoning application in 2020. DA Architects & Planners is the design firm.

BCGEU previously told Daily Hive Urbanized the project’s rental homes will be available to the general public — not exclusively for the union’s members.

The union represents over 80,000 members in 550 bargaining units in both the private and public sectors, including in health care, education, transportation, casinos, credit unions, municipal governments, and regional districts. About one-third of its members work in the direct government service.

Site plan of 6877-6945 Palm Avenue, Burnaby. (Google Maps)

Site plan of 6877-6945 Palm Avenue, Burnaby. (DA Architects & Planners/BCGEU)

Site plan of 6877-6945 Palm Avenue, Burnaby. (Google Maps)

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