Agenda Index City of Vancouver



Standing Committee on Planning and Environment


Director of City Plans in consultation with the General Managers of Engineering Services and the Park Board, and the Directors of Finance, Social Planning, and Legal Services


Grandview Boundary Industrial Area - Area-Specific Development Cost Levy





· On December 8, 1998, Council approved city-wide policies on Community Amenity Contributions and Development Cost Levies (DCLs) to apply to new development as of January 28, 2000. For DCLs, the interim rate was set at $26.91 per m² ($2.50 per sq. ft.) for all uses except for non-residential uses in industrial zones with rate of $10.76 per m² ($1.00 per sq. ft.); and, daycare and school use at $5.49 per m² ($0.51 per sq. ft.).

· On April 13, 1999, Council resolved to establish an area-specific DCL for the Grandview Boundary Industrial Area if required.

· On July 22, 1999, Council resolved that no Community Amenity Contributions be charged on rezoning applications to I-3, station precinct commercial, or highway oriented retail in the Grandview Boundary area, where the maximum allowable floor space ratio achieved through rezoning does not exceed the currently permitted 3 FSR.


The purpose of this report is to establish an area-specific DCL for the Grandview Boundary Industrial Area (GBIA), including a boundary, rate and allocation strategy.


A DCL is a charge levied by the City on new development to finance the costs associated with growth. It is frequently charged on a per-square-metre or foot basis for floor area added
through new development but the Vancouver Charter does not restrict the City to this basis for charging DCLs. The collected money can be used to fund growth-related costs of infrastructure, park, childcare facilities, and replacement housing. Under the currentVancouver DCL By-law, an interim rate of $1 per sq. ft. is charged for all new non-residential development in the City's industrial zones.


Grandview Boundary is an area of primarily warehousing and Highway Oriented Retail uses. Like False Creek Flats, it is anticipated that higher intensity uses such as the Broadway High-Tech Centre, currently being developed, will gradually replace many existing uses. It is estimated the area will eventually accommodate about 10,000 additional employees (there are currently an estimated 4000 employees). Much of the existing underground infra-
structure is at capacity and there are no employee amenities. In addition, the road network in the south-east quadrant of the area is inadequate to accommodate additional development. The costs of underground services, roads, sidewalks, parks and daycare for the area would total an estimated $10.3 million.An area-specific DCL is proposed for the GBIA to add a levy on top of the city-wide DCL. The area-specific money is pooled in a reserve fund like the city-wide DCL, but it can only be allocated to capital projects within the I-2, I-3, Still Creek CD-1 and other CD-1 zones of the Grandview DCL Area Boundary. (See the proposed Grandview Boundary DCL boundary in Appendix A).

For industrial uses, an area-specific DCL rate of $2 per sq. ft. in addition to the $1 per sq. ft. city-wide rate is recommended. For non-industrial uses a $.50 per sq. ft. rate is proposed in addition to the $2.50 per sq. ft. city-wide rate. The resulting combined total $3.00 rate would apply to both industrial and non-industrial uses. Childcare and school uses would have a reduced rate of $0.10 per square foot, the same rate as set in the False Creek Flats for these uses. In total, $4.2 million is projected to be collected over the next 20 to 30 years, $2.5 million in area specific DCLs. It is proposed that 90% of this amount be allocated to infrastructure requirements and 10% be allocated to park to accommodate the increased population.

An economic analysis to assess financial impacts of an area-specific DCL on industrial development in the GBIA was conducted by Coriolis Consulting Corp., the same consultant who advised on DCLs in the Flats and the Financing Growth Study. The economic analysis examined what an appropriate rate would be by considering:

· the estimated cost of the infrastructure needed to service growth in the area;
· land and levy costs in competing areas and GBIA's relative advantages/disadvantages;
· the financial viability of projects and the ability of I-2 and I-3 projects to pay;
· DCL costs relative to other development costs; and
· the impact on the high-tech market.

The consultant was also requested to estimate the timing and amount of development that could be expected to occur in the GBIA in order to assist in forecasting demands for services.

The consultant reached similar conclusions for GBIA as in the False Creek Flats. These are summarized below and the full study is available for review at the City Clerk's office.

1. Can future property taxes fund required upgrades?

The consultant notes that about 20% of collected property tax goes to infrastructure, and of this, only a small portion is available for new infrastructure or other growth-related capital projects. In Grandview Boundary, there would not be significant tax revenue increases. And since these go into the general fund, it is difficult to say how much of future Capital Plan programs will be allocated to the specific needs of Grandview Boundary. An area-specific DCL is a much more focussed financing tool which will provide more certainty that the planning upgrades will be implemented.

2. Who bears the costs of DCLs?

In a competitive marketplace, developers cannot add the cost of levies onto the price of commercial or industrial floor space because, unless a monopoly exists, no supplier can unilaterally determine price simply because costs are higher. The principle is analogous to a case where construction costs are higher because of poor soils. The selling price will not be higher simply because costs are higher. Something else must "give". This something else is land cost. Hence, a developer faced with an increased cost in the form of a levy, should lower the bid price for the land by an amount equal to the DCL.

3. Would an area-specific DCL in the GBIA cause businesses which would otherwise locate here to go to other areas, such as Burnaby and Richmond?

The GBIA is a competitive location to the industrial parks in Burnaby and to a lessor degree, Richmond. Vancouver land prices are higher than Burnaby and Richmond prices. Since Burnaby has no DCLs for industrial land while Vancouver has been charging them, one can argue that firms are willing to absorb higher costs to be in Vancouver.

Other evidence suggests that locational decisions are independent of DCLs. In Burnaby there is no DCL, while in Richmond the rate is $2 to $3 per sq. ft. Yet, Richmond has significantly higher industrial growth and almost double the rate of office growth (mostly high tech) than Burnaby. When considering overall financing costs for high-tech developments, the impact of a DCL was found to be relatively minor weighed against other factors. It is also important to note that improvements to the area, through redevelopmentand from DCL-financed infrastructure upgrades, should result in an increase in land values over time.

4. What lands should be included in the DCL boundary?

Staff recommend that all sites zoned either I-2, I-3 or CD-1 for HOR or industrial uses be included within the DCL boundary. Two parcels zoned C-1 that are within the GBIA boundaries would be excluded from the DCL boundary and charged the city-wide rate of $2.50 per sq. ft., consistent with adjacent C-1 parcels. These sites will not contribute in any measurable way to the growth-related infrastructure needs anticipated for the GBIA and therefore should be excluded.

5. What should be the area-specific DCL Rate?

An appropriate rate for the area is not only a function of ensuring that it remains competitive with other industrial areas but also that new infrastructure costs can be recovered and Council's land use objectives for GBIA as a future high tech node achieved. These factors are discussed below.

Recovery of Infrastructure Costs

Staff estimate the costs of required underground service upgrades, road improvements, and other capital improvements at approximately $10.3 million. Appendix B provides a breakdown of this figure. Based on an estimated rate of development of 50,000 sq. ft. per year over 20 years, a total combined DCL rate of $10.30 per sq. ft. would be required to fully recover these costs.

Rate of Redevelopment

Unlike False Creek Flats where much of the land is vacant or underdeveloped, most GBIA sites are improved with good quality industrial buildings. Consequently, there are few short-term redevelopment opportunities where property values supported by redevelopment are higher than those supported by the existing use. Applying a DCL rate that is too high could affect development economics, prolong existing uses, and thus reduce the rate of high-tech redevelopment in the area.

I-2 versus I-3 development

Because I-3 high-technology builds at densities 2 to 3 times higher than typical I-2 uses, DCLs would be proportionally higher for an I-3 building. Hence, beyond a certain level, DCL rates will favour I-2 developments over I-3 in the GBIA. And the higher the rate, the more development would skew toward I-2. The consultant estimated that based on current lease rates for office versus industrial space, total DCL rates (city-wide plus area-specific) above $3 per sq. ft. could tend to discourage I-3 development.

Considering the above, and balancing the infrastructure requirements with the City's desire to remain competitive in the marketplace, the consultant recommends and staff concur that the area-specific DCL rate for industrial uses in the GBIA be $2 per sq. ft. (in addition to the current city-wide levy of $1). If the city-wide rate increases after the Financing Growth review is completed, staff recommend monitoring the impacts on development in the GBIA and reporting back to Council if there is a need to adjust the area-specific rate.

6. Should the rate vary by use within the area?

As in False Creek Flats, staff recommend that the rate not vary between GBIA's I-2 and I-3 zoning districts because:

· they share a number of uses;
· they have the same maximum density; and
· regardless of the zoning, the DCL is calculated on development size, so higher density projects (which generate more infrastructure demand) will pay more, while lower density projects will pay less.

Staff also recommend that the combined rate for Highway Oriented Retail ( HOR) and other non-industrial developments in GBIA be the same as I-2/I-3 to provide consistency within the area. The recommended combined City/GBIA DCL rate ($3 per sq. ft.) is 50 cents more than the City-wide non-industrial rate ($2.50 per sq. ft.). So HOR uses in the GBIA would be paying $.50 more than those elsewhere in the City. However, HOR densities are low (about 0.4 FSR) and the consultant found that HOR uses would have the same ability to pay as I-2/I-3 uses. Therefore it is reasonable to maintain a consistent rate across the area and set a non-industrial (principally HOR) rate of $.50 per sq. ft. in addition to the $2.50 city-wide rate. The combined rate would then be $3 per sq. ft. for both industrial and non-industrial uses.

The only rate differential would be land used for childcare and school uses (K to 12) where a rate of $.10 per square foot would be charged as per the precedent set in the False Creek
Flats. In addition, temporary buildings would be charged a rate of $10.00 per building permit, the same rate as in other DCL areas.


The projected 1.4 million sq. ft. of development within the proposed DCL boundary, would recover $2.5 million in area specific DCLs and $1.7 million in City-wide DCLs at current rates ($4.2 million total) over the next 20 to 30 years. Staff note that the Financing Growth review is in progress and may result in an adjustment to the city-wide DCL rate. If this were to occur staff may need to report back with adjustments to the area specific rate as already noted.


The GBIA was developed as a light industrial and warehousing area. Underground pipes and roads were designed accordingly and outdoor amenity space for desk-bound workers was not considered.

1. Sewer and Water
The higher worker densities of high-tech development, will require increased sewer line capacity, and fire-fighting needs for larger, taller buildings will require increased water capacity. In addition, two stormwater retention ponds and wetlands recommended in the Still Creek Enhancement Study would provide temporary stormwater storage, reduce water velocity in the channel, and create amenity space for area workers. These features would provide downstream benefits in stormwater management and water quality. In terms of area, the GBIA includes about 10% of the Still Creek watershed that will benefit from the proposed wetlands. However, since the GBIA area workers will benefit from the passive recreation space provided by the wetlands, it is recommended that 25% of the total wetlands costs ($1,250,000) be attributed to the GBIA. Future study will determine more detailed costs and benefits of these features, more precise design and location and review additional funding sources and mechanisms.

It is estimated that this sanitary sewer, storm sewer and water works will total $4.7 million. The first major project in the area may trigger a major upgrade to water and sanitary sewer services. DCLs collected to that point may be insufficient to pay for the entire DCL portion of costs. Alternate bridge financing may be necessary until sufficient DCL funds are recovered.

2. Roads and Pedestrian Links
The traffic consultant recommends a new road connection between Cornett Road and Rupert Street to improve access and egress from the south-east sector of the area. The new road will require acquisition of private lands and construction at an estimated $2.1 million. Sidewalks are missing along many internal streets, and enhanced intersection lighting and pedestrian improvements, like that which will be part of the Skeena and Grandview Highway intersection improvements, is planned for major intersections at opportune times as future road improvements occur. Where possible, adjacent development will be required to install sidewalks but there may be situations where the City needs to build missing links between developments. This remaining pedestrian and lighting work is estimated at $530,000. In addition, road relocation estimated to cost $300,000 is planned for East 12th to rationalize the road network and provide a small public open space when the Revy site redevelops.

3. Park Requirements
With more worker intensive development happening over the next couple of decades, the Grandview-Boundary Industrial Area is anticipated to eventually have a working population of about 14,000 employees. A significant portion of these workers will seek recreational opportunities, mostly at lunchtime and after work. Some of their demands will be met with indoor recreational facilities (e.g. exercise rooms in office buildings, the swimming pool at Renfrew Community Centre), some will be met by outdoor facilities on-site (the Broadway Tech Centre is incorporating basketball and volleyball courts) some will be met with existing nearby parks (e.g. Falaise Park, Sunrise Park and Renfrew Community Park), and some will be met with a handful of smaller passive open spaces planned for the area. While not dedicated park, these passive spaces will be included as part of major developments to provide usable employee and public space at key locations along the Central Valley Greenway, near Skytrain Stations or along major roads. The 2nd phase of Bentall's Broadway Tech Centre on Broadway is a good example of this concept where a sizeable public space is planned for the northwest corner of the development, and a smaller one on the southwest corner.

In addition, it is recommended that a realignment of 12th Avenue when the Revy Store site redevelops will provide a passive recreational space. Landscaping costs of $150,000 for this space is included in the estimated costs for the GBIA.

In addition to these opportunities, Park Board staff believe it is necessary to provide one or several larger green spaces within the GBIA (there are currently no parks within the area). In examining the opportunities available, staff have concluded that the focus for additional green space should be the transformation of Still Creek into an important recreational feature. This would also support the other initiatives to improve stormwater management and enhance the natural qualities of the Creek advanced in the Still Creek Enhancement Study.

This would also support the other initiatives to improve stormwater management and enhance the natural qualities of the Creek advanced in the Still Creek Enhancement Study.

Although only possible over the long-term, the provision of a continuous, linear walking path parallel to Still Creek will give workers a wonderful place for walking and jogging - a role that is not dissimilar to the role played by the seawall downtown. By coordinating efforts with the City of Burnaby, it is possible to eventually create a continuous 10 km Greenway from the intersection of Grandview/Nootka to the east end of Burnaby Lake Regional Park.
The amount of green space provided in a 25 metre wide corridor in GBIA would be as follows:

a) Still Creek watercourse (1,300 m @ 15 m): 1.95 hectares
b) Still Creek Greenway (1,300 m @ average of 10 m): 1.30 hectares
TOTAL: 3.25 hectares

A large portion of the Still Creek Greenway will be constructed as part of the stream enhancement work including construction of the stormwater retention ponds. The remaining portion of the greenway will require construction at an estimated $300,000.

4. Childcare Requirements
Increasing area employment creates the need for childcare spaces. The City's Childcare Co-ordinator reviewed childcare demands of urban high-tech developments and confirmed the City's standard of one childcare space per 100 employees. The demand projected for the GBIA is equivalent to one 60 space childcare centre costing nearly $2.5 million. Given that total DCL recoveries for the area are anticipated at about $2.5 million, only a small DCL childcare allocation could be made. The City's Childcare Co-ordinator concludes that in the absence of alternative funding sources, allocating DCL funds to childcare in GBIA is not advisable.

Alternatives for funding childcare in the future could include city-wide DCL funds if this area is judged to be a priority area. In addition, under current childcare policy, major rezonings generating sufficient need are required to provide a self-contained childcare centre. Thresholds for this requirement are currently being reviewed by staff and will be reported to Council. Although anticipated redevelopment sites would not likely generate demand sufficient to warrant a daycare at average densities, it is possible that some sites may if they are developed to their maximum density.


The total DCL eligible cost is estimated at $10.3 million while area specific DCL recoveries are estimated at $2.5 million. It is recommended that given the extensive water, sewer, road and sidewalk work required, 90% of recoveries or $1.80 per sq. ft. be allocated to infrastructure and 10% or $.20 per sq. ft. be allocated to park. In total, this represents a 32% cost recovery of the estimated $7.8 million required for this work.

This cost recovery could increase since in addition to DCL funding, some infrastructure costs may be recovered through servicing agreements for future rezonings and developments within GBIA. Projects that are specific to a particular rezoning or development are generally funded by that development. For example, the Broadway Tech Centre will be funding the watermain and sewer upgrade along Hebb Avenue from Renfrew to Nootka Streets, and these projects have been excluded from the infrastructure costs for the GBIA DCL.

Traditionally, water, sewer and road improvements for large developments are cost-shared with developers. The developer pays the portion for the increased demand resulting from the development (such as new traffic signals and expanded watermains), and the City pays the portion for upgrading aging facilities to current standards. Also, if the improvements provide benefits outside the development area, the City typically funds that proportion of the costs. The developer's cost-share typically varies from 25% to 100%, averaging about 50% for water and sewer work and higher for road work.

The numerous smaller properties and owners in the GBIA make it difficult to attribute many of the required improvements to specific sites. The area-specific DCL will help recover some of the infrastructure costs, but the anticipated recovery will be less than the City has typically obtained for large redevelopments by single owners.

The remainder of the required funding would come from the Still Creek Enhancement Fund which could contribute to the storm water retention ponds and the Still Creek Pedestrian path; city-wide DCL funds for works other than water and sewer ($1.7 million is projected to accrue from the GBIA at current rates); and future Capital Plan budgets for the remainder of the water, sewer and road work. Additionally, in some cases the costs for required sidewalks, underground services, and a portion of the road works could be recovered from adjacent development sites depending on the scope of the redevelopment. A future Local Improvement Program is another possible source of funding for a portion of these improvements.


On February 28, 2002, an open house was held with property owners within the proposed GBIA area-specific DCL boundary to discuss the draft area plan, guidelines and the area specific DCL. Over 170 letters of invitation were sent out and 7 property owners attended the meeting. Most of the discussion related to proposals in the area plan and guidelines. There were no specific comments or concerns expressed about the introduction of an area specific DCL bylaw or the proposed DCL rate.


After assessing infrastructure, park and childcare requirements, and examining worker densities along with the goals for the GBIA as expressed in the Area Plan, staff recommend that the area-specific DCL be set at a rate of $2.00 per sq. ft. for industrial uses and $.50 per sq. ft. for non-industrial uses to be allocated 90% to infrastructure upgrades including improvements to water, sewer, roads and sidewalks and 10% to parks.

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Underground Infrastructure

Roads -
Cornett Rupert Connector -

12th Avenue Relocation -

Sidewalks - $150,000
Intersection Lighting -$80,000

Parks -
Still Creek Greenway3 $300,000
Revy Site Pocket Park $150,000 Total Parks $450,000

1 Stormwater retention ponds benefit the GBIA and the larger Still Creek watershed. The ponds also will provide passive recreation space for area workers and environmental benefits. Two ponds are planned and the demand attributed to the GBIA is estimated to be 25%.
2 Daycare is not proposed to be provided in the GBIA.
3 Central Valley Greenway through the GBIA will be funded from the provincial Skytrain budget.

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