Legal saga over Plaza of Nations redevelopment reaches a climax

2020 artistic rendering of the Plaza of Nations redevelopment. (James Cheng Architects/Canadian Metropolitan Properties)

Local development giant Concord Pacific has lost its latest legal battle against Singaporean billionaire Hong Leong Oei and his local entity, Canadian Metropolitan Properties (CMP), after its appeal to the BC Court of Appeal on a previous trial decision was rejected.

The appeal ruling issued on Tuesday indicates two of the three judges overseeing the case sided with Oei and CMP.

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In a statement to Daily Hive Urbanized, Concord has indicated that it intends to send the dispute to a higher level of appeal in the Supreme Court of Canada.

The dispute centres on the redevelopment of the Plaza of Nations on the Northeast False Creek waterfront in downtown Vancouver.

In 1989, just a year after Hong Kong business magnate Li Ka Shing acquired the Expo ’86 lands, Concord sold this 10-acre parcel, the former BC Pavilion, to Oei for $40 million for an eventual redevelopment over the long term.

false creek bc place stadium plaza of nations concord

Northeast False Creek, with the Plaza of Nations site, BC Place Stadium, and Concord lands. (Kenneth Chan/Daily Hive)

2020 artistic rendering of the Plaza of Nations redevelopment. (James Cheng Architects / Canadian Metropolitan Properties)

In 2015, Concord CEO Terry Hui negotiated an agreement with Oei to acquire a 50% ownership of the equity shares, not only as an investor, but to provide the redevelopment project with the experienced local know-how that Concord possesses. This is CMP’s only major asset in Canada.

Based on the property’s valuation of $500 million in 2015, the equity value of the shares at 50% is $250 million, which means Concord would pay $125 million for half of the available equity — effectively a 25% ownership of the property.

The payments to Oei were to be made in three stages: $10 million within three business days of the agreement’s signing, $40 million within 60 days, and the final $75 million after the rezoning application’s approval by Vancouver City Council, but no later than one year after the agreement’s signing.

In adherence to the agreement’s terms, Concord paid $10 million to Oei. But according to Concord legal advisor David Gruber, this $10 million payment was not returned to Concord after Oei cancelled the agreement.

Gruber adds that during trial, it was discovered that Oei had already sold a large interest of the Plaza of Nations project to offshore investors, which brought Terry Hui onto the path of pursuing Concord’s financial losses in court.

2020 model of the Plaza of Nations redevelopment. (B+B Scale Models)

2020 artistic rendering of the Plaza of Nations redevelopment. (James Cheng Architects / Canadian Metropolitan Properties)

In a previous counter lawsuit in the High Court of Singapore, says Gruber, Oei swore that the agreement with Concord was binding. But in the BC trial, which saw its legal proceedings begin in 2015, he contradicted his earlier claims by stating it was not binding.

In 2019, the trial court found the agreement was too uncertain to be binding, and deemed one of Concord’s witnesses to be problematic. It dismissed Concord’s claim, and ordered the developer to pay approximately $5 million in costs.

All the while, the original court ruling also deemed Oei was not upfront when he used Concord’s agreement as a loan scheme with a European bank, which would have doubled Concord’s financial risk and put Oei in breach of the agreement.

This subsequently led to Concord’s appeal in a higher level of provincial court, which has now failed.

“I do not agree the judge made an extricable legal error in his interpretation of either the Heads or what terms were essential. The appellant’s arguments do not engage an extricable legal error,” explained BC Supreme Court Justice Harris, who ruled against the appeal.

“It is, in substance, an attack on the judge’s findings of fact or mixed fact and law about the nature and purpose of the Heads within the relevant factual matrix, as well as on the judge’s interpretation of the Heads.”

2020 model of the Plaza of Nations redevelopment. (B+B Scale Models)

2020 artistic rendering of the Plaza of Nations redevelopment. (James Cheng Architects / Canadian Metropolitan Properties)

In contrast, Justice Stromberg-Stein, who supported the appeal, states the trial court’s earlier decision could set highly detrimental precedent to business workings.

“The standard set by the judge in this case could have an enormous impact on the business community. Parties working on complex, multi-million/billion-dollar, multi-year deals often start with a narrow contract that contemplates future incremental contracts,” she wrote.

“The majority’s decision in this case could render such agreements, which serve a vital commercial purpose, meaningless or, at the very least, uncertain, and frustrate complex deals or arrangements. This is untenable.”

Daily Hive Urbanized has reached out to CMP for comment on the appeal ruling, and the latest timeline for their Plaza of Nations project.

In July 2018, the outgoing city council approved CMP’s rezoning application for the Plaza of Nations, which entails a redevelopment with a total floor area of 2.1 million sq ft, including 1.4 million sq ft of residential uses, and 400,000 sq ft of commercial space, such as retail and restaurants for a new stadium-anchored entertainment district, as well as a 34,000 sq ft community centre and childcare facility, a 17,000 sq ft music venue, and a 30,000 sq ft indoor ice rink with 400 seats.

2020 model of the Plaza of Nations redevelopment. (James Cheng Architects/Canadian Metropolitan Properties)

2020 artistic rendering of the Plaza of Nations redevelopment. (James Cheng Architects / Canadian Metropolitan Properties)

The community ice rink was originally conceived to serve a double purpose as the new main practice facility for the Vancouver Canucks, but the partnership with NHL franchise owner Aquilini Investment Group fell apart in Spring 2021 — when the team struct a deal with the City of Abbotsford to operate Abbotsford Centre, as part of their plan to relocate their AHL affiliate, the Utica Comets, to the region.

CMP is still required to deliver a new ice rink, as part of their community amenity contributions (CACs) agreement with the city in exchange for the allocated density in the rezoning.

Altogether, the committed CACs reach a total value of at least $326 million, including 380 units of on-site social housing, the various community and recreational facilities, childcare, and the public outdoor spaces.

In 2019, CMP submitted the development permit application for the project, and indicated construction would occur in three phases — beginning with the westernmost half of the site. At the time, it was indicated the entire redevelopment could reach full completion in the early 2030s.

According to Gruber, “regardless of the ultimate outcome of this legal dispute, Concord’s hope is that development of the Plaza of Nations site will soon proceed in the interests of the community at large.”

Artistic rendering of the redevelopment of the Concord lands in Northeast False Creek. (Concord Pacific)

Artistic rendering of the redevelopment of the Concord lands in Northeast False Creek. (Concord Pacific)

As for Concord’s upcoming major development within Northeast False Creek, the site spans the waterfront area from east of the Plaza of Nations to Quebec Street. Their redevelopment, which is comparatively larger, has yet to reach city council for rezoning approval. The previous city council was scheduled to deliberate and review Concord’s rezoning application just weeks before the 2018 civic election, but the agenda item was abruptly withdrawn.

Concord says it is in the process of completing the application process for this site.

When fully built, both redevelopments of CMP’s Plaza of Nations and the Concord lands will obscure BC Place Stadium’s landmark roof and nighttime lighting display from the False Creek skyline.

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