POLICY REPORT

DEVELOPMENT AND BUILDING

TO:

Vancouver City Council

FROM:

The Woodward's Steering Committee

SUBJECT:

Woodward's Redevelopment Update - 101 West Hastings Street:
Request for Expressions of Interest

 

RECOMMENDATION

A) THAT Council authorize the Woodward's Steering Committee, through the Director of Real Estate Services, to issue a Request for Expression of Interest ("EOI") for the Woodward's site located at 101West Hastings Street (the "Site"), to invite submissions from interested developers, tenants, non-market housing sponsors, and others that describe interest and capacity to participate in the redevelopment of the Site, in accordance with the terms set out in this report.

B) THAT Council endorse the Principles for the development of the former Woodward's store as set out in this report.

CITY MANAGER'S COMMENTS

The City Manager RECOMMENDS A and B. Furthermore, the City Manager recommends that the Expression of Interest document clearly stipulate that developers will be short-listed to participate in the Request for Proposals (RFP) process and only those developers short-listed will be eligible to respond to the RFP.

COUNCIL POLICY

On July 28, 1998, Council confirmed principles to provide general guidance to actions and planning in the Downtown Eastside, Chinatown, Gastown and Strathcona areas whichincluded encouraging legitimate commercial activity, improving conditions at the street level, improving or replacing existing Single Room Occupancy ("SRO's"), reducing crime, and helping community people to find allies and seek a common future.

The Heritage Policies and Guidelines (reaffirmed by Council in April 1991) outline a procedure to be followed in applying the heritage bonus provisions as permitted in the Downtown Official Development Plan. The Transfer of Density Policy and Procedure (amended by Council in August 2002) provide that heritage density from a "donor" site may be transferred to a "receiver" site(s). On August 1, 2002, Council approved, in principle, a property tax exemption program for upgraded buildings in the Gastown (HA-2) area. The Woodward's building is outside, but adjacent to the Gastown area.

PURPOSE

This report serves to updates Council on the outcome of the Community Workshops and Ideas Fair held throughout May, 2003. Further, this report recommends that City Council move forward with a call forformal Expressions of Interest to invite participation in the development of the Woodward's site from potential developers, commercial tenants, non-profit tenants, and sponsors of non-market housing based on general principles recommended in this report. This request is not an RFP call, which will be subject to a separate call.

BACKGROUND

In March 2003, Vancouver City Council purchased the former Woodward's department store at 101 West Hastings from the Provincial government. The Province agreed to provide funding for 100 units of non-market housing. On April 22, 2003 Vancouver City Council adopted a Project Framework for the redevelopment of Woodward's to evaluate potential civic and other uses for the project, to consider design options and address financing and financial oversight and to develop an inclusive public consultation process. Council also approved the Woodward's project budget in the amount of $300,000 with the source of funds coming from the 2003 Supplementary Capital Budget.

DISCUSSION

The Project Framework calls for an extensive public consultation process which staff have recently completed. A number of promotional activities were done to encourage participation in the process and to invite residents, potential investors, business owners and others to begin thinking about the future of the building and the Downtown Eastside.

WOODWARD'S PUBLIC CONSULTATION PROCESS:

The Woodward's public consultation process has proceeded on schedule. The Community Visioning Workshops and the Ideas Fair held in May 2003 were well attended and participants were enthusiastic about the process.

Promotional Activities:
The Workshops and Ideas Fair were extensively promoted. Eight low-income Downtown Eastside community residents were hired to assist with promotional activities including delivering 7,000 brochures and 200 posters to the single room occupancy hotels in the Downtown Eastside, community centres, libraries, schools, and other community gathering places. Appendix A (available from the City Clerk) contains the list of single room occupancy hotels, community centres and gathering places to which information was distributed.

Three thousand (3,000) Chinese brochures were mailed and/or distributed to organisations in the Asian community and residences in the Chinatown area. Staff co-ordinated an unaddressed ad-mail drop by Canada Post of approximately 12,000 brochures to all mailboxes, residences and businesses in the V6A and V6B postal codes. Brochures were also mailed to individuals that had corresponded with the City regarding the future of Woodward's. A website was created that promoted the public events (and will serve to provide updates on the project - www.city.vancouver.bc.ca/woodwards). Finally, advertisements were placed in all of the major newspapers, including the Vancouver Sun, the Province, the Georgia Straight, the Vancouver Courier (East/West and Downtown), Ming Pao, Sing Tao, Thoi Sui (Vietnamese), El Contacto Directo (Spanish).

The re-lighting of the Woodward's "W" on May 22 garnered much media attention. The following morning, CBC Radio's The Early Edition did a live broadcast from the roof of Woodward's which provided additional promotion of the May 24th Woodward's Ideas Fair.

The Community Visioning Workshops and Ideas Fair:
Staff engaged the services of Mr. Stanley King and his Co-Design Group to facilitate the visioning process through a series of workshops and the Woodward's Ideas Fair. Community residents were hired to help staff set-up the public events, liaise with participants and observe the small group discussions. Finally, interpreters were available at the SUCCESS and Strathcona Community Centre workshops. In addition to the Co-Design visioning process, the Ideas Fair also included a theatre troop performance, entertainment by local musicians, and the creation of a mural by local artists. Architects, community organizations and others had general information tables, as well as displays of the work they had done on the Woodward's building to date.

Staff organized an open house Tuesday, June 3 to give both participants, as well as others that were unable to attend the workshops or the Ideas Fair, an opportunity to view the results of the public meetings. Participants were provided with a summary of recurring themes emerging from the consultation process, and an overview of next steps.

Staff have been requested to provide an overview of the results to the Gastown Business Improvement Association and the Heritage Commission and Heritage Vancouver (and possibly others) and are in the process of organizing these meetings.

Attendance at the Workshops and the Ideas Fair were very good. Almost 400 individuals attended one or more of the events. Of these, 75% attended the Ideas Fair. Of the individuals who participated in the process, roughly 50% were from the Downtown Eastside, including Gastown, Chinatown, Victory Square and Strathcona.

Summary of the Ratings - Emerging Themes
The public events generated a total of 50 drawings with 461 features that were listed and rated1. Please see Appendix B "The Woodward's Co-Design Program" for the drawings and rated features (report is available from the City Clerk and the Woodward's website).

There were several key features that emerged from the visioning process, including:
- residential use or housing,
- health,
- social uses,
- commercial uses,
- institutional uses,
- cultural uses,
- recreational uses,
- employment,
- general design/linkages.

Appendix C, (which is on file with the City Clerk and will be made available on the Woodward's website) summarizes the key recurring themes.

Housing or residential life was a key focus in many of the drawings and the ratings demonstrate support for a mix of unit types (for families, singles, couples, etc.), as well as

both market and non-market housing (there was broad support for more than 100 units of non-market housing) and self-contained units, as well as other features such as roof top gardens. Many of the recurring residential features focussed on design issues, such as: accessibility; having units equipped with cable, phone and internet access; "innovative" designs in the use of limited space; and, use of natural light, to name a few.

Health uses such as drug/detox/addiction services were featured in four different drawings. Support for these uses was mixed - half of the participants felt these services belonged elsewhere. However, there was strong support for alternative or holistic healing facilities. Much of the discussion described health as physical and spiritual wellness. Aboriginal healing services and a sweat lodge are two examples of features that received strong support. It was also suggested that the project include recreational facilities such as a gym, a swimming pool and a bowling alley. A roof top garden was seen as an area to practice Tai Chi or meditate and participants felt that this healing/recreational space should not only be made available to tenants, but also other community members.

With respect to commercial uses, there was support for a grocery store, as well as public market style retail uses, cafes and restaurants. There was also support for small business opportunities for local residents. The retail and commercial outlets were seen as a way to serve the needs of the local community (e.g., a food store or a place in which local artists could sell their arts and crafts), and also as a way to draw in tourists and others to generate economic activity in the neighbourhood.

Cultural uses covered a range of activities, including galleries, theatres, and studios. Many of the features focussed on aboriginal culture and music making. The vision of Woodward's was one that was spiritual and creative. There was also a desire expressed to retain and promote the history of the building (and the community).

Roughly a third of the 461 features were difficult to categorize under the key emerging themes. Many of these reflected the ways in which the building could help improve the lives of existing residents. For example, one drawing listed "fostering better self-esteem" as a major feature in the redeveloped building. A number of specific design features were mentioned, many of which are distinct and separate and could not be grouped together. Appendix D (which is on file at the City Clerk's office and will be made available on the Woodward's website) summarizes these additional features.

In conclusion, the Community Workshops and the Ideas Fair were well attended and participants were enthusiastic about the ability to have their ideas and visions translated into sketches and drawings. The ideas and vision for the future of the building that were generated through the process will be ideas for consideration in guiding the redevelopment of this important building.
EXPRESSION OF INTEREST FRAMEWORK:

The Project Framework and Public Process provides for an Expressions of Interest call to be issued to the community at large after the initial round of community consultations has concluded. The EOI will capture general interest of those groups wishing to participate in the future of the Woodward's site. The EOI package will be ready in late July and the EOI response window will be open from early August through early September. Ideas for redevelopment will be presented to the community at an initial open house to solicit community response and to Council after a staff technical review is completed in September, 2003. A series of Open Houses are scheduled for November at which time the public will be offered another opportunity to participate in further community consultation. Following finalization of the ideas to be incorporated in the redevelopment, a formal Request for Proposals ("RFP") based on an set of definitive criteria to be approved by Council would then be issued as the final phase of this process in January 2004. The RFP will serve as an opportunity to translate the ideas from the EOI into options for redevelopment.

The Expression of Interest call commences the next phase of the Woodward's redevelopment process. Having concluded the initial round of community consultation, the EOI is key for securing interest in revitalizing the subject property and surrounding residential and business communities. The EOI will provide an opportunity for developers, architects, designers, tenants, non-market and market housing groups, non-profit societies, institutions, office users, and retailers to be selected to participate in the redevelopment of Woodward's.

Given the complexity of this project and the varying desires expressed by the many different participants attending the Community Workshops and Ideas Fair, staff are recommending structuring the EOI as a four (4) prong invitation that specifically addresses the needs of the following proponent interest groups:

A. Developers able and willing to develop all or some of the site and/or building;
B. Commercial and retail businesses able and willing to pay a market rent or price for space;
C. Non-Market Housing Sponsors able and willing to develop the 100 units of non-market housing allocated to Woodward's; and
D. Non-profit societies and other groups who have a program they want to include in the redevelopment but who may not be able to pay a market rent or price for space.

As no one particular EOI information package can be uniquely tailored to address all of the different business requirements of each of these potentially interested groups in a succinct manner, each proponent will be requested to classify itself by specifically responding to one section comprising the four categories. Newspaper advertisements will be run identifying the four (4) categories, together with a general introduction, key timelines, and each proponent would complete and return the EOI section that it is pertinent to their response.

This framework introduces a mechanism whereby City staff can work with interested partners to pull together viable partnerships that will achieve the City's objectives. The EOI process ensures there is flexibility to recommend to Council a combination, or several combinations, of interested proponents who collectively could participate in a successful redevelopment, as determined by Council. This EOI structure requires interested parties to register individual business interests and discourages the premature formation of developer/user coalitions in advance of the January RFP call. To date, staff have discouraged developers from forming rigid alliances with non- profits, other potential non-market housing sponsors, and retailers in order to keep this process as flexible as possible. In the end, staff believe it will be very important for Council to have as much information and ability to combine different users to best fulfill the City's objectives in redeveloping Woodward's.

The City is also considering retaining ownership of the site and has commissioned a study to look at the feasability of the City pursuing this option.

THE WOODWARD'S GUIDING PRINCIPLES:

Regardless of which category a proponent registers itself, all interested parties must meet the same fundamental submission requirements. A set of governing principles were developed that must be met and adhered to by all proponents. These were used to guide the community consultation process, and it is recommended that they be formally endorsed by Council.

The Woodward's Project must:

· be financially viable and self-sustaining;
· be developed in a timely manner;
· include at least 100 units of non-market housing;
· be open and inclusive;
· be an urban revitalization catalyst;
· maintain and enhance the existing community;
· incorporate the talents, visions, and desires of the Downtown Eastside community;
· incorporate the talents and ideas of people throughout the City;
· play a role in the economic revitalization of the community;
· provide employment opportunities for local residents in both the construction and operation of the new building;
· provide opportunities and create synergies for local owners and businesses;
· incorporate user group involvement in the design process;
· celebrate the symbolism of the historic building (eg. the lighted "W", the building facade, Christmas displays, etc.);
· be environmentally sustainable;
· create a lively street front with animation at grade;
· not be a "black box" (eg. accommodate and encourage pedestrian circulation, etc.);
· provide appropriate parking;
· be accessible;
· take advantage of heritage opportunities; and,
· respond to local, physical context

These principles provide a broad range of options to proponents. For example, taking advantage of heritage opportunities could be considered by complete heritage retention and restoration to replicating heritage elements and ensuring compatibility with the surrounding heritage context. Similarly, the price or land value that the City may achieve is left open, as is the question whether or not a rezoning of the site would be supported.

The EOI submissions will begin the process of evaluating the cost/benefit implications of the many potential components that could be included in the project. It will allow the crucial issues and any constraints to be identified. The process will include interviews with proponents, further research and requests for additional information. Through this process, it is hoped that several ideas that are economically viable and achieve these principles will emerge and which will form the basis of the January RFP.

TECHNICAL REQUIREMENTS OF THE EXPRESSIONS OF INTEREST

The EOI is intended to determine the range and level of interest in the project. The EOI will be structured to facilitate easy response to the four categories of proponent submissions summarized above. All proponents responding to the EOI will be requested to indicate which visions/ideas presented in the Community Consultation are of specific interest.

I) Developers submitting an Expression of Interest will be required to provide the following:

- letter of introduction
- background of firm or organization, including relevant speciality
- development philosophy for a redeveloped Woodward's within the context of the Guiding Principles
- an indication as to whether they intend to develop all or part of the project, and specifically whether they intend on developing offices, market housing, high-tech, institutional space (etc.)
- ability to create local employment and job training opportunities

- examples of past developments of major projects
- resumes of key personnel

- any issues or constraints the City needs to be aware of
- have proven excellence in architecture
- example of how local materials, supplies and talent will be used

Although the EOI is intended only to register developer interest, it is staff's expectation that qualified developers will be short-listed to participate in the RFP. To this end, the EOI package will state that the developer is expected to source financing for the project, lead the project construction, and act as the facilitator to coordinate the mix of uses as determined by City Council. A critical objective of the developer will be to restore confidence that revitalization of the Downtown Eastside is underway and that this will take place in a way that will meet the needs of existing residents, while also creating viable opportunities for investment in the surrounding community, and in accordance with the principles for the redevelopment.

II) Commercial and Retail businesses and other revenue producing enterprises submitting an Expression of Interest will be required to provide the following:

- letter of introduction
- description of use of premises
- floor area requirements
- ability to create local employment and job training opportunities
- tenant improvement and base building requirements
- desired customer parking spaces/ratio
- resumes of key personnel
- for leaseholders, annual gross rent capacity
- for strata owners, ability to purchase

- any issues or constraints the City needs to be aware of

The tenants, retailers, and other leasehold users responding to the EOI will be expected to pay rent, generate capitalized value for the project, and attract shoppers, students or others from outside the Downtown Eastside. An anchor tenant(s) is expected to occupy the ground floor and animate the street front retail area. The EOI will state that it is important that the anchor use be a regional or civic destination so that the Downtown Eastside becomes more a part of the City than it has been for the past decade. Most importantly, any commercial or institutional uses should generate employment involving local residents. Other project uses may include general offices, market housing, food/restaurant opportunities and other commercial tenancies.

III) The Non-Market Housing Sponsor will be selected through the standard joint BC Housing and City process. The EOI will be distributed to non-market housing sponsors on the City's approved sponsors list, though societies not on that list will be permitted to respond, subject to being approved by Council as a non-market housing sponsor.

Potential sponsors will be required to submit an Expression of Interest providing the following:

- letter of introduction
- society credentials
- projects operated by the society
- housing expertise and management philosophy
- description of non-market housing program and clientele
- linkages to support services
- ability to create local employment and job training opportunities
- ability to deliver units in excess of 100 non-market units
- resumes of key personnel

- any issues or constraints the City needs to be aware of

The non-market housing component in the project could take a number of forms. As well the 100 units that BC Housing has agreed to fund could potentially be increased if other funding programs e.g. RRAP could be incorporated or sponsors were able to bring equity of their own to the project. The non-market component is likely to be developed through a design/build arrangement with the developers ultimately selected for the redevelopment. Selecting the sponsor for the non-market housing component prior to the RFP is likely best. That will provide additional certainty to thedevelopment partnerships expected to respond to the RFP. However, when to select the sponsor for the non-market housing may depend on the outcome of the EOI and the decision need not be made now. The Director of the Housing Centre will report back to Council following the EOI.

IV) Non-profit societies and other groups who have a program they want to include in the redevelopment but who may not be able to pay a market rent or price for space will be requested to provide the following:

- letter of introduction
- description of use of premises
- floor area requirements
- ability to create local employment and job training opportunities
- source of program funding, if any
- resumes of key personnel

- any issues or constraints the City needs to be aware of

The City is subject to the Freedom of Information and Protection of Privacy Act. EOI Proponents will be advised that the contents of all Expression of Interest submissions will be subject to public disclosure, save and except as noted below. Furthermore, EOI Proponents will be advised that all submissions will be subject to Freedom of Information requests and only documents pertaining to proforma financial analysis, proprietary issues, and third party confidential lease negotiations will be held "in confidence" by the City.

EVALUATION CRITERIA FOR EXPRESSIONS OF INTEREST SUBMISSIONS

After to the EOI response window opens, staff will gather all the questions submitted by the proponents and will host a Question/Answer session to give direction and clarity about the process. The questions and answers posed will be posted on the Woodward's Project web site. After the question and answer session, and closure of the deadline submissions, staff will assess the responses, meet with proponents (some or all depending on the number and quality of submissions) to discuss their proposals in greater depth, prior to preparing a short list and reporting to Council. The assessment will be based on the Guiding Principles approved by Council.

NEXT STEPS

Responses to the EOI will be reviewed by staff and prior to the results of the EOI being presented to Council in late October, staff will organize an open house in late September to review and receive feedback on components of the EOI proposals. Members of Council will also be invited to participate in the open house session as well. Once the results of the EOI proposal evaluation have been presented to Council in late October, two further Open Houses will be held during the beginning of November. The Open Houses will present the responses to the EOI, as well as the draft RFP terms. EOI proponents will be required to attend the Open House sessions to answer questions about their submissions and discuss the ways in which they would incorporate the ideas that were identified as a priority through the public consultation process. Staff will use this feedback to finalize the key principles and requirements of the final RFP package, prior to reporting to Council.

The RFP will open mid-January and will close mid-February, 2004. The proposals will be placed on display for two weeks and one final Open House will be held to allow for final community review and input in late February. This information will be summarized by staff and presented to Council for decision in mid-March 2004.

CONCLUSION

Woodward's is crucial to the revitalization of the Hastings corridor west of Main and to the nearby communities of Gastown, Chinatown and Victory Square. The Community Workshops and Ideas Fair were well received in the community and staff recommend exploring the ideas that were generated further through a formal Expression of Interest invitation.

The renovation and reuse of Woodward's has been identified as a top priority of the Vancouver Agreement. The Expression of Interest commences the next phase of the Woodward's redevelopment process and paves the way for the City achieving it's objectives of revitalization of the neighbourhood, encouraging heritage conservation, securing a mix of project uses, providing non-market housing, ensuring street-front retail continuity and accommodating a mix of incomes.

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© 2002 City of Vancouver

1 In addition, some participants submitted written proposals, or their own drawings and collages. While not included here, staff are tracking the responses and will incorporate the ideas into the EOI framework.