City of Vancouver offers to renew 669 strata leasehold homes in False Creek South

False Creek South. (Google Maps)

False Creek South residents living in strata leasehold properties on land owned by the City of Vancouver have been in limbo on their long-term future for years.

A total of 1,849 homes in strata leasehold, co-op, and rental arrangements, plus strata commercial properties, are located on 80 acres of City-owned land on the south side of False Creek between Burrard Bridge and Cambie Bridge.

All of these properties on former industrial lands were built in the 1970s and 1980s, with the strata leasehold properties falling under a 60-year lease with the City. Currently, these leases are set to expire between 2036 and 2046.

You might also like:

The municipal government’s negotiations are engaged with Strata Leaseholders Society (SLS), which formed in 2018 to represent False Creek South residents seeking to renew and remain in place in their homes. The makeup of the SLS membership represents 70% of the 669 strata leasehold residential units across 13 strata residential buildings.

As a result of negotiations, the municipal government is now offering these residents a longer runway to give them some greater certainty over their future — a 20-year lease extension.

The City of Vancouver owns 80% of the False Creek South neighbourhood. (City of Vancouver)

False Creek in Vancouver. (Google Maps)

The lease agreements for Stamps Landing, 658 and 666 Leg In Boot, Market Hill Terrace, Creek Village, Heather Pointe, Marine Mews, and Spruce Village will be the first to expire in 2036. The renewal would push the expiry to 2056.

Alder Bay Place and Fountain Terrace will be the second group of properties entering an expiring lease. Instead of expiring in 2040, the leases would end in 2060.

Harbour Terrace would have its lease expire in 2060, instead of 2050. It previously successfully negotiated a 10-year extension on its original 2040 expiration.

In 2046, the leases for Mariner Point and The Lagoons will expire, but an extension would push it off to 2066.

If the full 20-year lease extension term is used, this would bring the buildings to an age of 80 years old. Provisions in the agreement would allow owners to potentially end the lease extension early if they collectively determine they are not interested in the buildings any longer due to their condition.

False Creek South. (Google Maps)

September 21 will be a crossroads date for these leasehold strata homes, as the SLS members will convene to vote on the package being offered by the City. At least 75% of the members must vote in favour to trigger the municipal government to prepare lease extension and renewal offers to all 669 individual strata leaseholders, with the acceptance of the offer entirely at the discretion of the individual leaseholders.

Those who accept would be required to provide a rent prepayment based on a formula of an annual rental rate of 2.25% multiplied by land value, an annual rent escalation of 3,5% to the annual rental rate and the net present value of the rent for the extension using an annual discount rate of 5%.

The 13 strata properties carry a combined aggregate land value of about $370 million, according to the City.

This package framework was developed during negotiations that took place between November 2021 and July 2022. The negotiation process was triggered by Vancouver City Council’s October 2021 decision to reject the City of Vancouver’s real estate division’s proposal to end the leases as originally timed, and redevelop the 80 acres into over 6,660 units of market strata leasehold, market rental housing, and non-market and co-op housing — roughly a one-third share for each housing type.

Existing condition:

Existing condition of False Creek South. (City of Vancouver)

Rejected plan for the full buildout of future redevelopment:

Potential concept for the future of False Creek South. (City of Vancouver)

There would be a mix of low-, mid-, and high-rise buildings, including a 500 ft standalone tower next to Granville Island. The total floor area on City-owned land would grow from 1.86 million sq ft today to 6.6 million sq ft. The redevelopment of the entire neighbourhood would be completed by the 2040s.

But City Council rejected this proposal, sent the planning process for the neighbourhood’s future back to the drawing board, and directed City staff to immediately begin a formal negotiation process on expiring strata leasehold leases.

The City’s 80 acres of False Creek South are amongst its most valuable assets within the municipal government’s Property Endowment Fund, which is worth north of $6 billion.

At the westernmost end of False Creek South is the future Senakw redevelopment on the Squamish First Nation’s 11-acre reserve at the south end of Burrard Bridge. Earlier in the planning process, it was stated that up to about 30% of the over 6,000 homes at Senakw could be strata leasehold condominiums, but it was recently finalized that the entire residential component will be 100% market and non-market rental housing.

You might also like: