St. Paul's Hospital sale price to Concord Pacific was $850 million: Auditor General

Oct 26 2021, 8:50 pm

The Auditor General of British Columbia has provided new insights into the 2020 sale of the historic St. Paul’s Hospital campus to Concord Pacific.

According to the Auditor General’s (AG) newly released report examining the finances of the provincial public sector during the 2020/2021 fiscal year, the 6.6-acre hospital at 1081 Burrard Street, on the westernmost edge of downtown Vancouver’s West End neighbourhood, sold for $850 million.

Providence Health Care’s agreement to sell the property to the major developer closed on July 31, 2020, and an announcement on the sale was made on August 12, 2020. At the time, it was stated the deal was worth about $1 billion.

The AG describes the deal as a “significant, complex transaction.” The title of the property will be transferred on July 31, 2027, after the scheduled completion of the new St. Paul’s Hospital campus currently under construction near SkyTrain Main Street-Science World Station in the False Creek Flats.

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A lost size comparison of St. Paul’s Hospital on Burrard Street from the sales brochure. (CBRE)

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Lights of Hope at St. Paul’s Hospital. (St. Paul’s Foundation)

The AG recommends the sale proceeds received to date and at the anticipated July 2027 date should be deferred until the completion of the new hospital’s construction.

As of March 31, 2021, there is an outstanding amount owing of $725 million, which the AG states should be recorded as a “loan receivable, discounted as appropriate.”

The hospital is currently operating at the site under a sale-leaseback agreement. The AG states lease payments from Providence Health Care to Concord Pacific for using the existing hospital should be recorded as “operating lease payments.”

Providence Health Care’s proceeds from the sale will directly go towards covering a substantial portion of the $2.2-billion cost of building the new and expanded state-of-the-art hospital. The provincial government is covering $1.158 billion of the cost, while St. Paul’s Foundation is covering $125 million through fundraising efforts.

Upon the closure of the century-plus old hospital, the facilities are expected to be largely demolished for redevelopment into high-density residential uses. Concord Pacific previously indicated it is looking to partner with MST Development Corporation — the for-profit developer arm of the Musqueam, Squamish, and Tsleil-Waututh First Nations.

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2021 rendering showing the final design of the new St. Paul’s Hospital. (Providence Health Care)

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Artistic rendering of the new St. Paul’s Hospital campus and the public plaza. (Providence Healthcare)

The new hospital in the False Creek Flats will have a capacity of up to 548 beds, representing a net gain of 115 new beds. It will be the home of several leading provincial programs and referral centres, including for heart and lung care, renal, eating disorders and specialty surgeries and transplants.

In addition, it will offer a diverse range of general and specialized care, including HIV/AIDS, chronic disease management services, emergency and critical care, mental health and addictions beds and programs, ambulatory services and outpatient clinics, end-of-life care, Indigenous health, maternity, colorectal and gastrointestinal services, and community care and community outreach programs.

Supporting spaces of the campus, such as office towers and a hotel, will be completed in future phases. When the campus is fully complete, it will be the place of employment for about 10,000 people.

The existing Burrard Street campus has a very poor seismic code rating and is a hodgepodge of buildings that are inefficiently merged together. Major additions were made to the hospital in 1931 and 1945, and more recently a 10-storey tower in 1983 and a second 10-storey tower in 1991.

Providence Health Care, with the support of the provincial government, previously determined that a new purpose-built hospital would be preferable to concepts that rebuilt the hospital at the existing location. It would also open up the hospital to a larger service area, given that much of its current visitation comes from areas beyond the downtown Vancouver peninsula.

Kenneth ChanKenneth Chan

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