Agenda Index City of Vancouver

POLICY REPORT
URBAN STRUCTURE

TO:

Vancouver City Council

FROM:

Director of Current Planning, in consultation with the
General Managers of Engineering Services and the Park Board,
and the Director of Social Planning

SUBJECT:

Area-specific Development Cost Levy (DCL) for False Creek Flats

 

RECOMMENDATION

GENERAL MANAGER'S COMMENTS

CITY MANAGER'S COMMENTS

COUNCIL POLICY

· On December 8, 1998, Council approved interim city-wide policies on Community Amenity Contributions (CACs) and Development Cost Levies (DCLs) to apply to new development as of January 28, 2000. For DCLs, the rate was set at $26.91 per m² ($2.50 per sq. ft.). For all uses except:

· On February 25, 1999, Council passed a Resolution, "THAT a Development Cost Levy district boundary and rates be established for the area in False Creek Flats proposed to be rezoned I-3 prior to the public hearing to rezone lands to I-3."

· On April 13, 1999, Council resolved to establish an area-specific DCL for the area proposed for I-3 zoning in False Creek Flats.

PURPOSE

The purpose of this report is to establish a general boundary for an area-specific DCL in the False Creek Flats area; identify the maximum costs for infrastructure, park and daycare; and propose a work program and timing to bring an area-specific DCL bylaw for the Flats to Council for consideration.

BACKGROUND

Due to concerns over the costs of providing infrastructure necessary to accommodate the growth expected in the False Creek Flats, Council asked staff to report back on an area-specific DCL for the proposed I-3 zone in the Flats.

DISCUSSION

1. Boundary

The initial approach adopted was to establish an area-specific DCL for the I-3 zoned area only. While this makes sense in terms of intensity of use, staff believe the boundary should reflect the systematic approach to providing infrastructure, and the overall open space and park requirements of the Flats basin.

To this end, in order to decide upon a boundary, staff have identified a set of principles, as follows:

Based on these principles, a general boundary is recommended as indicated on the map in Appendix A for an area-specific DCL bylaw for False Creek Flats. This boundary will be refined and finalized during the analysis process described below.

2. Costs

All properties within the False Creek Flats area will be included in the general city-wide DCL. For industrial zones, all industrial and non-industrial uses, with the exception of residential, will be required to pay an interim rate of $10.76 per m² ($1.00/sq. ft.), prior to building permit issuance, as of January 28, 2000.

Due to concerns over the costs of upgrades to the infrastructure that are necessary in False Creek Flats, if development were to proceed, the preparation of an area specific DCL was also called for by Council. This would be an additional cost, layered on top of the general city-wide DCL.

In April, general infrastructure requirements were identified and roughly estimated at
$28 million. When combined with very roughly estimated park and child care costs, the maximum DCL rate estimated for just the I-3 zoned properties was estimated at about $53.82 per m² ($5.00/sq. ft.). In the interim, further work has been done to qualify these costs.

(a) Infrastructure - Total: $14.3 million

As noted, the combined total for infrastructure improvements will go to $14.3 million. A new storm trunk will be required to serve the Flats as well as some sanitary sewer facilities at an estimated cost of $4 million. Reconstructions of Industrial Avenue, Station Street, and Glen Drive with some realignments, signal modifications, bike lanes, left turn bays and median improvements on adjacent streets are also required at an estimated cost os $10.3 million. There is no upgrade anticipated at this time for the water system.

(b) Park - Total: $8.7 million

Vancouver's park standard is intended to provide residents with sufficient recreational opportunity. Workers use parks as well, but typically outside the hours of residential park usage. Traditionally, the City has therefore not imposed park requirements on industrial areas in the consideration that the recreational needs of workers can be met within the existing park system.

The dramatic increase in industrial workers in the False Creek Flats will result in increased demand for adjacent park and open space. This is particularly true given the nature of the high-tech worker, typically young, single and involved in recreational pursuits. Consequently, many high-tech firms foster a work culture reflective of their employees' active life style, and include both park and recreational amenities in their high-tech campuses. To create a high-tech precinct that is attractive to employees and employers, additional park space close to work places as well as additional amenities in existing parks are needed.

In a study completed for Burrard Slopes, it was identified that commercial workers use park about one-third as much as area residents. Given the ultimate anticipated worker population in False Creek Flats is somewhere between 15,000 and 20,000 workers, it would not be unreasonable to provide park for about 17,500 workers at one-third of the City average of 2.75 acres per 1,000 people. The net result would be a park requirement for False Creek Flats of 6.5 ha (16 acres).

Considering that Thornton Park and the new park proposed to the east of the Trillium site total almost 4.5 ha (11 acres), it would be reasonable to expect the area-specific DCL to provide the difference of 2.0 ha (5 acres) . At $322.80 per m2 ($30 per sq. ft.) for land acquisition and $107.60 per m2 ($10 per sq. ft.) for park improvement, this would generate a DCL total of $8.7 million. While China Creek Park is also within the boundary, it has not been deducted, due to the shortage of park space in the Mount Pleasant community, particularly on the east side of Main Street.

(c) Child care - Total: $7.7 million

According to the data collected in staff's study of the high tech industry (September 1998) 'on-site' or 'close proximity' childcare is a commonly provided amenity for high tech industrial parks (eg Fred Hutchinson Cancer Research Centre, Immunex Corporation, and Microsoft.) While further study is needed prior to finalizing the childcare space requirement, preliminary estimates using the commercial calculations for the False Creek North and Marathon ODP's, suggest that the demand would not exceed 256 spaces. This would result in a cost of $7.7 million.

When the requirements for infrastructure, parks and child care are combined, the maximum total for the costs of the area-specific DCL is $30.7 million. Considering the development potential of about 6,000,000 square feet in the I-3 zoned area and about 600,000 square feet in the I-2 zoned area, this would result in a maximum DCL of $50.05 per m² ($4.65 per sq. ft).

This represents the maximum cost for all identified DCL fundable items but it is not the value suggested for the area-specific DCL as that will be determined by the process set out below.

3. Process to Determine a DCL Rate and Establish a DCL Bylaw

Once the area boundaries have been decided upon and the maximum costs have been determined, there are a number of steps which must be followed to determine the ultimate DCL rate and implement a Bylaw.

(a) Economic Analysis

In proposing the I-3 zoning, the City is attempting to respond to the changing nature of industry, specifically to create an area linked by transit and, in the case of the Flats, near the downtown core where high-tech industry can locate. The intention is very much to retain those jobs from businesses which are currently incubating in the city and which may leave

due to a lack of appropriate zoning and available land. As well, we are hopeful that Vancouver, with its livability, amenities, and educated workforce, will be seen as a desirable location for high-tech industry.

In the high-tech market, we are competing with cities all over the world, and more specifically in our context, the I-5 corridor, including Seattle and Portland and, locally, Richmond and Burnaby. Vancouver has been at a disadvantage due to the lack of both appropriate zoning and land. In trying to gain an advantage, we must be careful not to layer on costs which are so excessive as to limit or restrict development. As a result, before determining any area-specific DCL costs, an economic analysis is required to determine what costs the market will bear so the City can achieve its objectives of developing high-tech industry and jobs in Vancouver.

This is a fairly complicated analysis, as we are comparing many factors including: brown fields versus green fields; suburban versus urban; high density versus lower density; underground parking versus surface parking, and the constraints imposed by a high water table. With respect to the I-2 zoned area, we must be cautious in imposing costs so as to not discourage other allowable development. The general city-wide DCL of $10.76 per m² ($1.00 per sq. ft.) must also be considered as it will be collected on all properties in False Creek Flats, independent of any charges determined by the area-specific DCL.

(b) Public Benefit Strategy

The public benefit strategy considers the defined area's needs, establishes priorities between those items which can be funded by DCLs, considers other funding scenarios and, with consideration to the economic analysis, sets the rate. It should be expected that the rate will not exceed the overall cost estimate of $50.05 per square metre ($4.65 per sq.ft.), and could be significantly lower upon consideration of the economic impacts on competitiveness of Vancouver's high tech areas with other jurisdictions.

(c) Preparation for Council Consideration

Once the rate has been established, a report will be prepared along with a draft by-law and the affected property owners and the public will be notified.

(d) Council Consideration

A date is set for Council's consideration which will allow for public representation, in particular the affected property owners. If the DCL is approved, enactment follows at the earliest opportunity.

(e) Timing

The entire DCL process is estimated to take about six months, because of the amount of work which has already been done in determining the area boundary and the maximum overall costs. A proposed work program is set out in Appendix B. It shows the economic analysis, which, in this case, is the most complex part, taking about three months. Following that, the preparation of a public benefit strategy, the public notification and the preparation of the report can be completed in an additional three months.

If work on the economic analysis were to commence immediately, we could expect a report to Council in early January of 2000, thereby permitting the area-specific DCL to be put in place at about the same time as the general city-wide DCL.

While there was initially some hope that the area-specific DCL could be prepared before the enactment of the I-3 zoning, this has not been possible, due to the complexity of the work. Also it would have been impossible to start an economic analysis and determine a rate while there was still potential for private property owners to opt out of the I-3 initiative.

Noticing that decisions have had to be made by property owners as to whether they are going to be involved in the I-3 initiative, prior to complete information on the area-specific DCL, staff have prepared a statement of intent relating to the proposed DCL. This was available during the public hearing process and is attached as Appendix C. To help allay concerns, it assures property owners that there will be: no double charging; a comprehensive economic analysis which will allow input from land owners; a public discussion at Council; and for large sites that may propose their own DCL-fundable amenities on-site, there is a possibility for contribution of DCL funds to these Capital Projects.

Responses from the property owners and the development community indicate that there is general support for the I-3 zoning initiative and the area-specific DCL, providing that it takes place with the outlined process and with full consultation.

CONCLUSION

Based on our initial analysis and the consideration of general principles regarding the boundary, staff are recommending a general boundary for the area-specific DCL Bylaw for False Creek Flats and a work program which should bring the final DCL Bylaw into operation early in the year 2000.

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False Creek Flats DCL Strategy APPENDIX B
R:\CC\REPORTS\COUNCIL\1999\990720\DCLFCFL2.WPD

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