POLICY REPORT
Urban Structure

Date: January 8, 2002
Author/Local: D. Mikkelsen/ I. Smith /604.871.6168/604.873.7846

RTS No. 02411

CC File No. 8206

P&E: January 24, 2002

TO:	Standing Committee on Planning and Environment
FROM:	The Director of Current Planning
SUBJECT:	Southeast False Creek: Zoning Considerations For Privately Held Lands

RECOMMENDATION

A. THAT Council direct the Planning Department, in consultation with the land owners, to develop new mixed land use zoning for the private properties generally between 1^st and 2^nd Avenues from Wylie Street to Main Street that were included in the Southeast False Creek Policy Statement.

B. THAT Council endorse the strategy of a City initiated rezoning for the designated area and during that process, private rezoning applications for sites within the area will not be separately considered.

C. THAT Council authorize staff to develop an area specific Development Cost Levy for the designated area with funding for an economic analysis to be taken from the Southeast False Creek account.

D. THAT Council endorse an urban design study of the designated area to help set density, height, and streetscape parameters with funding to be taken from the Planning Department operating budget.

E. THAT Council reaffirm the approved policies in the Industrial Lands Policy (1995) so that the Mount Pleasant I-1 Industrial Area will be retained for light industrial and city-serving uses south of 2^nd Avenue according to the existing zoning.

GENERAL MANAGER'S COMMENTS

The General Manager of Community Services RECOMMENDS approval of A through E.

COUNCIL POLICY

· In March 1995, Council approved the Industrial Lands Policy framework to guide future decisions on the use of industrial land. Section 2.4 of this Policy states:

"To retain Mount Pleasant for industrial use, excluding the lands north of 2^nd Avenue. (Note: The area north of 1^st Avenue was released in 1990 to allow redevelopment of the shores of False Creek, east of Cambie Street. Preliminary investigations show that 2^nd Avenue is a more practical boundary than 1^st Avenue.)"

· In October 1999, Council approved the Policy Statement for Southeast False Creek. It includes specific provisions for the redevelopment and zoning of the privately owned lands within the study area (see Appendix B for specific references). The key reference to the vision for the lands between 1^st and 2^nd Avenues is found in Part A, Section 1.4:

"On the blocks between 1^st and 2^nd Avenue, a new land-use zone should be created, in consultation with the property owners, which introduces residential and live-work uses and mixes with non-residential uses, including those already present. This zone should permit clean industrial uses and promote a mixture of land uses at a density that encourages redevelopment of those buildings needing replacement, but encourages the retention of viable, existing industrial buildings and uses."

PURPOSE

This report proposes a strategy to develop and apply a new mixed-use zoning for the privately owned lands between 1^st and 2^nd Avenues and Wylie and Main Streets in the Southeast False Creek (SEFC) study area (see Appendix A). It also notices the potential impact of higher density development immediately adjacent to industrial lands and reaffirms the City's position to retain the I-zoned lands south of 2^nd Avenue for city serving industries in proximity to the downtown.

BACKGROUND

The area under consideration is currently zoned M-2 and in 1990 was designated as a "let go" industrial area and consequently not included in the I-zone initiatives in the mid to late 1990's. Property owners opted to leave this land as M-2 in consideration of its future potential as a mixed use area as part of the City's redevelopment of SEFC.

In March 2000, Council approved the continued planning process in the Official Development Plan (ODP) phase including a zoning process for the private sites. When approving the Policy Statement, Council was receptive to allowing private sites to serve as a catalyst for redevelopment in SEFC.

Currently, there are three serious rezoning inquiries within the designated area (see Appendix C). The proponents for these sites are eager to move ahead, and are prepared to submit individual CD-1 rezoning applications.

DISCUSSION

1. Work required:

In August of this year Council approved both the budget and work program to complete the environmental plans promised for Southeast False Creek. Consultants have now been hired and work is underway. When these plans are completed, their recommendations will be merged with the basic site structure, leading to a preliminary design which would form an ODP submission for SEFC.

As promised, before undertaking an ODP for SEFC, staff will report back to Council for both approval of the work program and required funding. We are currently anticipating that this report will be brought before Council for consideration later this year.

Whether or not Council decides to proceed with the ODP, staff believe that we should complete the work promised in the policy statement to develop a new zoning for the privately owned lands between First and Second Avenues. Expediting this work at this time, will also respond to the immediate development pressure in a much more efficient manner than the significant staff commitment necessary to process several independent CD-1 rezoning applications.

This report seeks Council's approval of this work program to develop a new zoning and identifies the necessary resources to do so. As part of the analysis, an urban design consultancy is necessary to resolve issues around building density and height. This area is an important transition between the heights contemplated in the Policy Statement for the Citysite, lands north of 1^st Avenue, and the lower buildings permitted on the industrially zoned land to the south. This study will allow the zoning to be tailored to both the needs of the landowners and the City goals as set out in the SEFC Policy Statement. The resulting guidelines will ensure the success of this transition as well as guaranteeing the quality and cohesiveness of development. The $15,000 estimated for the urban design consultancy will come from the Director of Current Planning's 2002 consultants budget.

Other issues to be resolved focus on whether exclusions and/or bonuses should be incorporated in the zoning to respond to heritage retention and cultural amenities. If Council approves the recommendations in this report, an additional report identifying issues with exclusions and bonuses will be brought forward for consideration prior to the finalization of the new zoning.

2. Process

Council's endorsement is sought in regards to the urgency of developing a new zoning schedule covering all of the privately owned lands under consideration. There are currently three rezoning inquiries in the study area, each of which are likely to come forward with individual CD-1 applications if this zoning schedule is not developed. These inquiries are:

a. Polygon/Progressive Engineering: mixed use development with substantial

residential component.

b. Playhouse Theatre: mixed use development including a theatre and a

substantial residential component.

c. Opsal Steel: mixed use development with a substantial residential component.

Each of the three potential applicants will likely seek to tailor-fit the vision provided in the SEFC Policy Statement to a CD-1 application that will best suit their needs. To process these three applications would forego a coherency in urban design that would result from undertaking an urban design study. Moreover, the processing of individual applications would drain resources from City staff, giving less time and effort to a quality form of development. This methodology also opens the door for speculation in the study area, as more land owners will seek similar CD-1 applications, adding to the patchwork fabric of the study area. Clearly, this process can be averted with a careful analysis and drafting of a district zoning schedule. A draft of this zoning schedule and guidelines will be taken through a public process that seeks to involve all property owners and affected parties. For success, it is imperative that this process is done cooperatively between the land owners and staff, with the support of Council.

While staff are working through this process, it is important that Council not consider individual CD-1 rezoning applications for the privately owned lands. It is only through this comprehensive approach that the highest quality of urban design will be realized.

3. Zoning Options & Area specific Development Cost levy (DCL)

At the conclusion of the process, the City could either (a) initiate a rezoning of the entire area; or (b) hold the new district schedule in reserve and encourage the private owners to apply on a site-by-site basis. Option (a) is recommended as it would lead to more consistent and comprehensive redevelopment. This approach is supported by the property owners, who feel a better product will result in a more timely manner.

With this approach, one concern may be the loss of a community amenity contribution (CAC), which is normally collected with private rezonings. While this opportunity would be lost, the funds can be replaced by initiating an area specific DCL. While more work is required to develop and implement option (a) and its associated DCL, the extra work will assure that these funds are clearly designated for the SEFC study area (a summary of the pros and cons of each option are found in Appendix D). It is important to note that while all sites will pay toward the community amenities, the majority of these are likely to be located on the City-owned lands. An area specific DCL will provide this flexibility. Also, an independent analysis will result in a fair rate with respect to the City's needs and the property owners' ability to pay. The $5,000 estimated for this analysis is available within the existing SEFC planning budget already approved by Council.

4. Proposed Work and Timing
The work will be done as set out below.

* If ODP is underway at this time, the public process will be coordinated.

5. Adjacent Industrial Zoning

The Industrial Lands Policy and the Mount Pleasant Community Plan designate that the Mt. Pleasant I-1 Industrial Area (between 2^nd and 8^th Avenue, and Main and Yukon Street) be retained for service industrial activity. The I-1 zoning permits light industry, a range of commercial service uses, advanced technology, and some office uses. Many businesses in the area provide services such as automobile repair, equipment supply and repair, cleaning services, and catering. The area is also attractive to more contemporary businesses such as laboratories, production studios, and radio stations. At the same time, small-scale and specialty wholesalers and manufacturers continue to locate there.

As the City's population and employment base expand, demand for support services will grow. In addition, many businesses in Downtown South and other non-industrial areas will seek to relocate in the City when their present locations are redeveloped for housing. These factors, combined with a strategic location near the Downtown, indicate that the Mt. Pleasant industrial area will grow in importance as a city-serving industrial area. Considering the importance of this area and the impact that a rezoning of the lands North of Second Avenue could have on speculation and property values, Council is asked to reaffirm its long-term policy for this area.

Conclusion

At this time, City staff and consultants are completing Environmental Plans that will inform the preliminary structure plan so that the City can enter into an ODP process for the City-owned SEFC lands in the spring. Whether we are able to achieve this goal or not, it is important to expedite the rezoning of the adjacent privately owned lands that are also identified for redevelopment in the SEFC Policy Statement. This urgency is highlighted by serious development proposals that will likely bring about separate, individual CD-1 rezoning applications if a coherent overall zoning is not brought forward in a timely manner. Staff have had ongoing discussions with the land owners and, with their support, recommend a City-initiated rezoning of the area as a whole, to a new district schedule. In order to do this, Council is asked to approve the process, work program, and the development of an area specific DCL. As well, Council is asked to not entertain any individual rezoning applications while these studies are underway and to reaffirm the retention of the existing Mount Pleasant I-1 Industrial Area.

* * * * *

Appendix A - Site Identification Map

Appendix B - SEFC Policy Statement - excerpts regarding privately owned lands
Adopted by Council October, 1999

Section 1.3 Objectives and Intent

To set densities in the sub-areas of SEFC so as to integrate with the adjacent context, recognizing that, over the next 50 years, the surrounding neighbourhoods will likely redevelop to higher densities.

Section 1.4 New Policy

On the blocks between 1st and 2nd avenues, a new land-use zone should be created, in consultation with the property owners, which introduces residential and live-work uses and mixes with non-residential uses, including those already present. This zone should permit clean industrial uses and promote a mixture of land uses at a density that encourages redevelopment of those buildings needing replacement, but encourages the retention of viable, existing industrial buildings and uses.

The privately owned lands should be a mixed-use area. Existing clean industrial use is encouraged and can remain and/or be gradually replaced by retail and service, live-work or residential uses.

Section 4.4 New Policy

Retail and service uses should be permitted on portions of 1st and 2nd avenues.

2nd Avenue should have commercial or industrial use at grade.

Section 9.4 New Policy

Height and massing should be integrated with what is proposed on the City lands to the north as follows:

a. Higher buildings to the east of up to 76.2m (250 ft); and
b. Medium heights to the west of up to 45.7m (150 ft).

All street edges in this area should be defined with lower building elements having a minimum height of two storeys along 2nd Avenue.

Section 9.4 Heritage

The retention of privately owned, economically viable buildings with heritage merit should be encouraged. The City should explore methods to achieve this by supporting a mixture of use, including live-work, and by considering building code relaxations and the use of Heritage Density Bonuses.
Appendix C - Current Development Inquiries

Appendix D - Zoning Options Analysis

Option (a) -- Develop FC-2 zoning and we rezone the land

Pros

Cons

· This will establish a consistent level of zoning and development throughout the site; no mixed zoning parcels adjacent to one another · Creation of an area specific DCL would bring the city money on all development, not just on new uses as per CAC's · Allows the easier assembly of multiple small and often less desirable/developable parcels into larger parcels · More land will likely redevelop due to ease of process (especially for small parcel owners), thereby increasing the money taken through DCL's via increased development numbers · Development may occur more quickly, as an area-wide zoning would make the development application process easier with less paperwork · Limits the intrusion of land owners on tenants in existing structures for preliminary soils testing and groundwork · Current property owners prefer this form of zoning · An area-wide zone makes more sense logistically and economically for City staff than the processing of large numbers of CD-1 applications

· The process to bring about an area-specific DCL is longer and more involved on the City side · Community Amenity Contributions (CAC's) are easier to acquire and have a larger availability of spending options than DCL's · The City loses the ability to collect CAC's and some of its control over roads, lanes, and right-of-ways · May hinder the desirable notion of incremental growth due to ease of development and land consolidation -- an integral part of sustainability · The City will forego individual fees assessed to each zoning application using a traditional zoning strategy

Option (b) -- Develop FC-2 zoning and property owners apply to rezone each parcel

Pros

Cons

· The City has more control over each individual development application to ensure growth is consistent with zoning and SEFC Policy Statement · The City extracts an application fee for each individual development application · CAC's are much easier to implement and have more options available for spending · Limited City process is required to enact such a zoning, as it is administered on a site-by-site assessment · Slows the development process, allowing more incremental growth

· Individual development applications may slow growth in the area, as small land owners may sit idle in their M-2 zoning -- not feasible to redevelop · Consolidation of lands into economical parcels is more difficult · CAC's only apply to new use developments, therefore there is potential for less monetary gain · If less development occurs, it could ultimately result in less CAC income · Existing land-owners will find it onerous to apply for new zoning, due to the need for additional time, paperwork, and reports · Contamination reports must be completed, which will clearly effect the security of existing renters

(c) 1998 City of Vancouver