Vancouver International Airport (YVR) is seeking to generate new revenue by developing several hundred acres of under-utilized parcels of land next to the north and south runways into uses that complement airport activities.
The airport’s land use amendments plans and rationale are explained in a letter notifying the City of Richmond of the proposed changes.
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YVR has been hit hard by the collapse of the global passenger demand over the past year, and it is anticipated it will take years for traffic to rebound to pre-pandemic volumes. This performance is reflected by the airport’s $380 million deficit in 2020.
The Northlands Greenfield Land — a strip of land just north of the north runway — is currently designated for airside developments, but the proposed changes would offer flexibility to enable ground commercial uses as an option. The type of developments eyed for this large site are trade-enabling warehouse and logistics uses, which are in short supply in the region.
Currently, the Northlands is largely unused, with only the Canada Post Pacific Processing Centre and a UPS facility as the tenants.
The much more significant proposed change deals with developing a strip of 257 acres — 161 acres of undeveloped land and 96 acres of leased land — immediately south of the south runway. This entire area is protected for the construction of a third parallel runway, but as a result of the pandemic, YVR anticipates the need for a third runway will be pushed well into the long-term future.
Even prior to the pandemic, YVR anticipated the third runway would be required after the 20-year timeline of the airport’s 2037 master plan, which has seen its future capital projects deferred or cancelled.
The airport is now seeking to allow the “airfield” designated land set aside for the third parallel runway next to the south runway for additional airside uses such as air cargo and aircraft maintenance facilities, which are urgently needed and in short supply on Sea Island.
“Permitting Airside development at Airport South will enable realization of cargo growth potential, supplementing the shortfall in supply at Cargo Village (which is fully occupied) and supporting just-in-time delivery of high value air cargo shipments, critical to Metro Vancouver businesses,” reads the letter.
This site would still be reserved for a future parallel runway, but it is not YVR’s only option for a third runway, as the airport has also developed an alternative concept of building a foreshore runway east of Sea Island through extensive land reclamation. However, this foreshore runway concept is far more costly and could have a greater environmental footprint.
Two smaller sites south of the third parallel runway site would be redesignated from airside uses to groundside commercial uses, such as light industrial, commercial, and retail uses accessed mainly from roadways. City staff are concerned that the retail component will compete with Richmond retailers and draw traffic, but YVR has stated that the retail uses are intended to be local, such as for Sea Island workers.
YVR is also considering repurposing the partially completed central utilities building just east of the main terminal building’s parkade facility.
In September 2020, the airport cancelled the CORE program of constructing a new central utilities building, geo-thermal heating and cooling system, and new parkade, as the additional capacity provided by this ground infrastructure would not be needed for several years due to the decline in air travel.
As of the end of 2020, YVR spent $432 million on the CORE program, with $247 million recognized as a write-down. Half-built concrete structures span the construction site, immediately east of the parkade and Canada Line’s YVR Airport Station, but these projects could resume in the future with the reinfusion of hundreds of millions of dollars to restart construction.
In the meantime, the airport will be repurposing the central utilities building for groundside commercial use.
YVR states these strategies of optimizing the use of its assets serve to diversify its revenue base and improve its financial resilience, while also improving the use and efficiency of existing infrastructure and enhancing operations, and generating new employment opportunities.
The airport is required to consult with the municipal government, but the approving authority for these changes is Transport Canada, which owns Sea Island.