Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

City Council

FROM:

General Manager of Engineering Services and Director of Real Estate Services in consultation with the Directors of Facility Design & Management, City Plans, Development Services, and Financial Planning

SUBJECT:

Gastown Parkade Redevelopment and Amendment to Vancouver Development Cost Levy By-law No. 8149: Parking Garages

 

RECOMMENDATION

COUNCIL POLICY

In 1998, Council adopted the Program of Strategic Actions for the Downtown Eastside, Gastown, Chinatown, Strathcona and Victory Square which included bringing legitimate business back to the area, reducing drug-related crime and improving conditions at the street level. As part of this program, Council has approved the demolition of the Cordova parking structure and redevelopment of the site with a commercial use which will be occupied by WHEX under a long term lease and parking.

The City may fund the construction of parking that would augment or change the location of this basic supply in order to achieve the following public objectives;

On December 8, 1998, Council approved city-wide policies for development cost levies (DCLs) to apply to new development as of January 28, 2000. The interim DCL rate was set at $2.50 per sq. ft. ($26.91 per m²) for all uses except for non-residential uses in industrial zones with rate of $1.00 per sq. ft. ($10.76 per m²); and, daycare and school use at $0.51 per sq. ft. ($5.49 per m²).

PURPOSE

This report requests authorization for the remaining funds to complete a new commercial and parking building on Cordova Street and for the renovation of existing parking and commercial space on Water Street, including office space fronting Water Street and a potential additional 2 ½ floors of parking on Water Street. The report also reviews the DCL requirement for parking garages and recommends a reduced rate for this use.

BACKGROUND

The City is the owner of the Gastown Parkade (Water Street and Cordova Street structures) which, prior to the demolition of the Cordova Street structure, had 1405 parking spaces to serve the Gastown heritage area and any future development on the Woodward's building site. As earlier reported to Council the Cordova Street structure was at the end of its life, and the Water Street structure needed structural improvements, and a facade upgrade to better fit its heritage setting.

On April 9, 2002 Council approved, in principle, the redevelopment of the Water Street parkade structure and the demolition and reconstruction of the Cordova Street structure. Council also approved $550,000 for consulting and management services to development approval stage, and the negotiation of a lease with a potential commercial tenant for use of a portion of the Gastown Parkade. On June 25, 2002 Council approved $3,300,000 for demolition of the Cordova Street structure and necessary site preparation including excavation and shoring. On October 8, 2002 Council approved terms and conditions for a tunnel under the lane between the Water Street and Cordova Street structures.

The City has entered into a lease with WHEX for over 100,000 square ft. of commercial space.This development and the rebuilding of the Gastown parkades should significantly contribute to the future success of Gastown.

The WHEX concept will focus on the history of British Columbia and will include a number of interactive stops along a tour. The tour will focus on early settlement in British Columbia, native history and culture, local trade, the gold rush, and other relevant historical experiences (circa 1800 - 1900). The tour will include a combination of three dimensional models, actors in period costumes, interactive audience participation, historical displays and props. The concept will target tourists to Vancouver as well as local residents. The concept is modeled after an existing venture in Moose Jaw, Saskatchewan, called the "Tunnels of Moose Jaw". This venture has been operating successfully for approximately two years and has attracted over 300,000 visitors to date.

The City has retained Henriquez Partners to provide architectural design services for the Gastown parkade replacement and upgrade including the commercial components, and the potential 2 ½ floor expansion of the Water Street structure.

The City has also entered into a contract with Dominion Fairmile Construction Ltd.(Dominion) for general contractor's construction services. In order to expedite the work on a fast-track basis to meet the parking requirements of Woodward's and commercial requirements of WHEX, the work is being tendered on a sequential basis. Dominion has entered into subcontracts for the demolition and excavation and shoring work.

Design and construction are progressing satisfactorily as scheduled and demolition work is underway with the following major milestones:

Completion of demolition

November 21, 2002

Application for Development Permit

November 12, 2002

Commencement of WHEX fit-up

July 6, 2003

Final occupancy

June 1, 2004

The redevelopment of this facility is essential in order to provide parking for the heritage buildings in the area, and for proposed affordable housing. With new commercial frontage on both Cordova and Water Streets, including the WHEX project, the facility will become more compatible with its neighbours and contribute to the vitality ofadjoining streets. In addition, current plans show a unique design with light wells and internal landscaping. The project should be an asset to its community.

PARKING PROVISION

The current development proposal is for1432 parking spaces. There would be 626 parking spaces in the new Cordova Street structure, a reduction of 199 from the previous building, and above commercial space occupied by WHEX. On Water Street, the existing parkade would be renovated and have 546 parking spaces, a reduction of 34 from the existing building. These parking spaces would be adequate to meet the needs of the Gastown community and WHEX. However, when re-use of the Woodward's building proceeds there is expected to be a need for additional parking. The City has a commitment to the Woodward's building to provide up to 500 spaces to meet their development needs if the building is re-used. If this commitment is exercised, then 2 ½ floors can be added to the Water Street structure, which would add 260 parking spaces. Any parking provided for the Woodward's building site would be rented at market rates by the building users.

Due to the City's commitment for parking to support the retention and re-use of the Woodward's building it is recommended that the added 2 ½ levels of parking, estimated at $5,000,000, be planned for; however, because of the uncertainty regarding the retention and re-use of the Woodward's building, and its ultimate parking needs, the construction of the addition on the Water Street structure should wait until the needs of the Woodward's building are confirmed.

OFFICE SPACE ON WATER STREET

The current parking structure on Water Street is set back from the street above the first floor and does not fit well within the heritage context of the street. As part of the renovations to the building it is recognised that a change is needed to improve the facade by creating a false front and/or developing some use to bring the building to the street. A proposal has been developed which would have office space fill this gap and commensurately address the facade shortcomings. Preliminary plans are attached as Appendix A. Combined with some reduction in the parking area, a 4000 sq. ft commercial space floor plate can be created. The $1,200,000 cost for 3 levels (12,000 sq ft.) of office space is justified from a business perspective, and is recommended by the Director of Real Estate Services. It is also highly supported by the community.

TIMING/ DEVELOPMENT PROCESS

An aggressive fast-track construction schedule is required for this project in order to meet the completion dates in the lease with WHEX. A detailed time line is attached as Appendix B. This schedule minimizes the disruption to the community, which is dependent on the parking, particularly through the summer, and fits with the needs of WHEX, which requires the building be ready for fit-out work by July 06, 2003, and projected final occupancy by June, 2004. This schedule also meets the potential parking requirements for the Woodward's building.

Both development and building permits will be required. However, to meet the aggressive construction schedule it is necessary for the Chief Building Official and Director of Planning to depart from the norm and issue permits for some stages of building work ahead of `complete' development permit issuance. It is anticipated this will be accomplished through issuance of a series of partial development/building permits to cover work below grade. Construction above grade would proceed only after a full development permit is issued.

The Zoning and Development By-law and Building By-law contain provisions of co-dependence and support, essentially requiring that when a development permit is required it be issued before a companion building permit may be issued. In responding to infrequent circumstances where a compelling public purpose has posed constraints in seeking strict adherence to this, a building permit for site excavation and shoring has, on occasion, been issued by the Chief Building Official, in advance of the "complete" development permit. This has only occurred upon receipt of support from the Director of Planning, with confirmation that a development application has been in process, obtained approval, and is nearing issuance in terms of satisfying conditions of approval. The Director of Planning has, in these circumstances, issued a development permit for `excavation and shoring' to accompany the building permit.

In order to achieve the desired timing for delivery of the Gastown Parkade redevelopment project, building permits must be issued for excavation and shoring, and construction to grade, prior to "complete' development permit issuance. This will necessitate the Director of Planning issuance of corresponding "partial" development permits for these two phases, in advance of "complete" development permit issuance. To achieve permit issuance in this unusual manner, the Chief Building Official and Director of Planning seek Council approval. This is embodied in RECOMMENDATION C.

PROJECT BUDGET

On the basis of the current design for secured residential parking for the Woodward's building, business agreements with WHEX, and the facade upgrade, a breakdown of costs is as follows, DCL's and GST excluded:

Cordova Street Structure:

$ 21,800,000

  

    Parkade

$ 16,300,000

  

    Commercial Space

$ 5,500,000

  

Water Street Structure:

$ 10,200,000

  

    Offices

$ 1,200,000

  

    Parkade Upgrade

$ 6,200,000

  

    Commercial Space

$ 2,800,000

  

Water Street Parkade expansion

$ 5,000,000

subject to report back

Source of Funding:

    

    Parking Site Reserve

Previously funded
Additional funding required
Water St. addition

$ 21,450,000

$ (2,150,000)
$ 19,300,000
$ 5,000,000

to be reported back

    Property Endowment Fund

Previously funded
Additional funding required

$ 9,550,000
$ (1,700,000)
$ 7,850,000

  

    Woodward's Development

est.$800,000

does not include overpass

    WHEX

est.$ 400,000

  

FINANCIAL IMPLICATIONS

Funds for this work would be provided from both the Parking Site Reserve for the parking portion of this project, and the PEF general fund for the commercial components.

The $19,300,000 to be provided from the Parking Site Reserve would be made up from funds totalling approximately $16,000,000 available at the end of 2002, and anticipated revenues from operations during the construction period.

The $7,850,000 for the commercial components, $6,650,000 to complete the commercial space and $1,200,000 for the new office space on Water Street, are available in the PEF fund general.

GENERAL CONSTRUCTION CONTRACT

Through public tenders, fixed prices were received for demolition work, excavation and shoring work and general contractor's services. Dominion tendered the lowest fixed price for general contractor's services ($ 1.078 M) for the Cordova Street structure and Water Street structure and facade upgrade. Dominion has since entered into a subcontract for the demolition and excavation work and is currently managing this work.

Given the tight time-line for completing the work, a sequential tendering process must be implemented, whereby Dominion will seek tenders by a public process for the remaining subcontract work (structural, mechanical, electrical, architectural, etc.) once design for each subtrade work is completed. With the approval of the City, each subcontract price will be added into a fixed-price contract with Dominion.

DCLs AND PARKING USES

City staff are reviewing city-wide DCL policy as part of a Financing Growth study, including parking uses. However, due to the timing and magnitude of the City's Gastown parkade redevelopment, this issue is brought forward to Council's consideration in advance of the Financing Growth report back.

City policy(City Plan, Transportation Plan) promotes walking, biking and transit rather than expansion of private automobile use. Because of this, the City controls the amount of parking and through zoning strongly encourages below grade parking. It is only in exceptional circumstances that parking is provided above grade, and for a heritage area such as this proposal is a prime example.

DCLs are established so that anticipated development will contribute to the costs of growth. DCL projects include: sewer, water, drainage and street facilities; park land; daycare; and, replacement housing. DCLs are applied to all approved floorspace, pursuant to the Zoning and Development By-Law, at building permit issuance.

Staff analysis of growth impacts due to parking uses indicate that this use places a significantly lower burden on DCL-eligible capital projects than other uses. Staff also note that most parking is now DCL-exempt, as it is primarily either underground or surface parking which is excluded from floorspace calculations. Under current DCL By-law requirements above grade parking in "Parking Garages" (as defined in the Zoning and Development By-law) would pay DCLs at the $2.50 per square foot rate, with the floorspace calculated at 0.7 of total floorspace. This creates an inequitable situation between parking uses. Based on the lower demand for DCL projects, and the inequitable DCL treatment of parking uses, staff recommend that a reduced DCL rate of $0.10 per square foot be applied to parking garages.

CONCLUSION

The balance of funds totalling $27,650,000 is required to build a new commercial/parking building at 125 Cordova Street, and to upgrade the existing parkade at 130 Water Street, to meet current building codes, to create space for WHEX, and to provide separate office space fronting Water Street. There may also be a need for an additional 2 ½ levels of parking, at an estimated cost of $5,000,000, which would be added to the Water Street structure to meet the City's commitment for parking for the retention and re-use of the Woodward's building. Funds for this work would be provided from the Parking Site Reserve and the Property Endowment Fund.

Timing of the development is critical to the community, both to meet the parking needs of the Gastown heritage area and for the City's tenant WHEX. Because of this, staff request Council's approval to issue permits to allow construction of the Cordova Street structure to grade, prior to issuance of a complete development permit. It is also recommended that the Director of Facility Design & Management and General Manager of Engineering Services be authorized to approve contracts for building construction within the approved funding.

Due to the magnitude and timing of this development, a review of DCL's for parking uses is included. Analysis of growth impacts due to parking uses shows that parking places a lower burden on DCL-eligible capital projects than other uses. Therefore, staff recommend that a reduced DCL rate of $0.10 per square foot be applied to parking.

* * * * *

ag021105.htm

APPENDIX B

GASTOWN PARKADE MAJOR MILESTONES

Cordova Street Parkade:

  

    Demolition

Sep 16, 2002 - Nov 21, 2002

    Development Permit

Nov 12, 2002 - Feb 28, 2003

    Excavation/Shoring

Nov 22, 2002 - Jan 30, 2003

    Below-grade Structure

Jan 31, 2003 - Mar 13, 2003

    Commencement of WHEX fit-up

Aug 06, 2003

    Substantial Completion

Mar 01, 2004

    Occupancy

Jun 01, 2004

Water Street Parkade:

  

    Seismic Upgrade

Jan 13, 2003 - Oct 21, 2003

    Facade and Offices

Oct 14, 2003 - Dec 29, 2003

    Additional Parking Levels

Dec 29, 2004 - Jul 19, 2004

    Commencement of WHEX fit-up

Jul 06, 2003

    Substantial Completion

Mar 01, 2004

    Occupancy

Jun 01, 2004

* * * * *

ag021105.htm

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