Opinion: South Campbell Heights plan offers economic solutions for Metro Vancouver

Opinion: South Campbell Heights plan offers critical economic solutions for Metro Vancouver

Aerial view of the recently built Walmart Distribution Centre in Campbell Heights North, Surrey. (Stuart Olson/RiteTech Construction)

There is an increasingly apparent urgency for Metro Vancouver’s 23 local governments to think more holistically when it comes to land use, and that has been the driving force of Metro Vancouver Regional District.

Much of the region’s land use attention centres on residential uses, given there is unquestionably a dire housing affordability crisis.

But the other land use crisis that only sees a tiny fraction of housing’s attention deals with industrial land supply.

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It is far from being a sexy urbanism issue, but industrial land supply and the type of building developments they allow are absolutely crucial — yet we are on the verge of completely running out of it. The regional district is now forecasting Metro Vancouver will run out of industrial land supply sometime between 2028 and 2035.

According to CBRE’s third quarter 2021 report, Metro Vancouver has effectively run out of industrial space, with overall availability dipping to a record low of 0.9%, which is also pushing up rents.

There is currently 6.3 million sq ft of industrial space under construction, but 74% is already pre-leased with over half of the remaining space in some stage of negotiation. Businesses in need of industrial space have few options except to secure design-build facilities for their space needs.

This level of pre-leasing, along with limited suitable industrial land supply, has left large format industrial spaces in short supply; there are no existing or available opportunities for lease over 50,000 sq ft. More new supply construction is needed to fulfill short- and long-term demand.

On Friday, the regional district’s planning committee will have an opportunity to recommend a substantial increase in the region’s land supply by supporting the City of Surrey’s proposal to allow industrial and commercial developments in South Campbell Heights. Further reviews will then be made by the regional district’s board later this month, with a final decision possibly next year.

What is at stake here? It is a re-designation of 618 acres of largely undeveloped land south of 20 Avenue, along the border with the Township of Langley. While it is surrounded by the agricultural land reserve (ALR), it is not part of this provincially protected farmland designation.

The municipal government’s proposed plan, necessitating regional district approval, would allow 418 acres of South Campbell Heights to become employment-only lands. The remaining 200 acres would be set aside for conservation areas.

Proposed industrial and commercial land uses, and protected conservation areas in the South Campbell Heights. (City of Surrey)

According to the Surrey Board of Trade (SBOT), there is potential to build over 8.5 million sq ft of building floor area on the developable portion of this site, employing as many as 20,000 people. And already, 135 businesses and companies have expressed interest in moving into these employment lands when they are available.

“The proposed development of South Campbell Heights in Surrey is important to the Metro Vancouver region because of industrial land creation, new jobs and businesses as well as international co-location opportunities,” said Anita Huberman, president and CEO of SBOT, adding that “this benefits all cities.”

“Having the opportunity to provide an additional 300 to 400 acres of employment land through the Campbell Heights South Land Use Plan, while protecting the Little Campbell Creek watershed, is important for the City of Surrey and Metro Vancouver region. This is imperative to the region’s growth and competitiveness.”

There is a high demand for warehousing and logistics space, which are critical for constants like the region’s food supply and goods. If these spaces are located further away from the region’s population centres, such as deep in the Fraser Valley, it could cause food and goods costs to soar from increased transportation costs, which also results in greater emissions from the longer distance of travel.

As the result of the global shipping backlog, the costs for food and goods have already seen steep upward climbs over the past year due to transportation issues before these imports even arrive in Metro Vancouver. Never mind the local backlogs within the region.

Everyday consumers see real direct impacts when industrial businesses are forced to pay higher transportation costs and higher industrial lease costs — from longer trucking distances between warehouses located in the outskirts of the Lower Mainland and retail businesses in the city, and the upward pressure in rents from the sheer shortage of suitable space.

And industrial businesses, including those in manufacturing, also provide mass employment.

All of this amounts to improving regional affordability; it allows businesses to remain in Metro Vancouver, it creates employment that supports residents and their families, it reduces the costs passed down to consumers, and it vitally supports a diversified economy for Metro Vancouver. These are aspects of what it means to be a livable region, which has to date been overshadowed by narrower considerations and factors for what defines livability.

A healthy industrial land supply also provides the capacity for economic opportunities and innovation, which might otherwise go to other jurisdictions elsewhere in Canada and the United States.

Earlier this week, local startup Damon Motors announced it is turning an industrial site in Surrey into a 110,000 sq ft plant for manufacturing its electric-battery motorcycles. By 2025, the new plant will employ 800 people, including 300 high-tech manufacturing jobs and 500 high-tech office jobs.

Over the past year, major homegrown biotechnology companies that are designated as some of Canada’s future vaccine and therapeutic antibody treatment suppliers announced they are opening manufacturing facilities on industrial properties in Vancouver; AbCellera and Precision NanoSystems are constructing 130,000 sq ft and 75,000 sf ft facilities, respectively, in the False Creek Flats that will support hundreds of high-paying jobs.

Artistic rendering of the Damon Motors manufacturing hub at 12850 112B Avenue, Surrey. (Damon Motors/Bosa Properties)

AbCellera Good Manufacturing Practices 900 Evans Avenue Vancouver

Artistic rendering of the AbCellera Good Manufacturing Practices facility at the 900 block of Evans Avenue in Vancouver’s False Creek Flats. (Chernoff Thompson Architects/AbCellera)

BC’s film and television production industry also relies on industrial space, both for the zoning required to construct brand new purpose-built studio facilities and for securing existing warehouse space to convert into studios. Correspondingly, the film industry competes with other high-demand uses for logistics and warehousing.

Industrial and commercial land use designations in South Campbell Heights could potentially even allow for a major new film production studio.

The local film industry is strong and remains a leader in North America, but it is quickly losing its competitive edge due to a lack of existing studio space and the sluggish pace in building additional space that fills the demand. Production credits are very helpful, but they can only go so far if there are physical limitations. BC is increasingly forgoing business opportunities to film industries in Georgia and especially Ontario, which has been building major new studio facilities in recent years. This is a vicious cycle as it allows the talent in Georgia and Ontario’s industries to become more experienced, narrowing the advantageous gap in expertise, knowledge, capacity, and infrastructure that BC once had, just behind California and New York.

The regional district should take all of these economic factors into account, especially under the advice of its recently launched InvestVancouver — the regional district’s new economic development and investment attraction agency, which is the regional equivalent of the Vancouver Economic Commission.

In 2018, the regional district rightly rejected the City of Surrey’s request to allow residential uses in South Campbell Heights. But there is now a compromise to be made, as this site is not part of the ALR and is clearly a natural southern extension of the Campbell Heights North business park, which spans 1,900 acres and is home to numerous major regional businesses, including construction companies, retail chains in need of warehousing, and manufacturing enterprises.

It makes sense to increase the region’s industrial land supply by expanding an existing industrial land supply cluster, and this location already has major road network connections to support commercial vehicle traffic.

Over the past 20 years, according to the municipal government, Campbell Heights North has developed at an accelerated pace. It is now estimated it will be fully developed before the end of this decade.

More broadly, the region can meet some of the industrial space demand through the intensification of existing land supply, such as vertical industrial spaces, which are generally more suitable for smaller, non-logistics businesses. Additional vertical industrial buildings for smaller businesses could free up land supply for large businesses in need of flexible, standalone structures.

But fundamentally, addressing the region’s industrial space shortage, now and over the long term, centres on increasing land supply for these uses, and protecting existing industrial land supply from being repurposed, especially for residential uses. This requires local governments to exercise some discipline.

Metro Vancouver is a major urban region, but it is also one of North America’s smallest in terms of geographical size.

Obviously landlocked, this region, as of 2016, has a land base of 2,870 sq km, with only 837 sq km allowed for development, including 701 sq km for urban areas and 136 sq km for industrial and mixed-employment areas. Metro Vancouver’s total developable area is not much bigger than the City of Toronto’s entirety of 630 sq km.

The vast majority of Metro Vancouver’s tiny geographical land base is deemed undevelopable, including 554 sq km for the ALR, 1,347 sq km for conservation and recreation areas (North Shore mountains and reservoir watersheds, regional parks, floodplains, and other ecologically sensitive areas), and 114 sq km for rural areas.

If areas like South Campbell Heights are unsuitable for industrial land supply, then where?

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