|
CITY OF VANCOUVER
|
Refers Item 3.
MEMORANDUM January 19, 2005
TO: |
Mayor Campbell and Councillors |
|
COPY TO: |
J. Rogers, City Manager
|
FROM: |
L. Beasley, Director of Current Planning |
SUBJECT: |
201 Burrard Street (Burrard Landing): CD-1 Text Amendment |
The purpose of this memorandum is to report back on three questions which have arisen regarding this proposed text amendment to permit General Office Live-work use (400,000 sq. ft.) and Retail and Service uses (52,475 sq. ft.) within the 807,320 sq. ft. Office and/or Hotel tower which the CD-1 zoning allows on Parcel 2A:
• impact on commercial capacity in the downtown,
• property tax implications, and
• community amenity contribution.
BACKGROUND
At Public Hearing in April 2001, Council approved amendments to adjust the boundaries of development parcels and alter the form of development in Burrard Landing (area north of West Cordova St., between Burrard and Thurlow Streets). Of the total permitted commercial floor area in this area of 1,992,076 sq. ft., in four towers, 1,296,846 sq. ft. was consolidated in two towers: 807,320 sq. ft. on Parcel 2A (the subject site) where Hotel use was also permitted as an alternative to Office use, and 489,511 sq. ft. on Parcel 2B (Shaw Tower) where General Office Live-work use up to 231,432 sq. ft. was permitted as an alternative to Office use.
The current application requests (a) that General Office Live-Work be allowed on Parcel 2A in addition to Hotel and Office uses now allowed, limited to approximately 50 percent of the total floor area which is presently allowed, and (b) that Retail and Service uses be allowed in the tower’s lower two floors, as potential alternatives to the Hotel and Office uses now allowed.
DISCUSSION
COMMERCIAL CAPACITY
Concern has been expressed about the implications for downtown commercial capacity of the proposed text amendment.
The City has an objective to maintain a vibrant commercial Central Business District. To achieve this the Central Area Plan (1991) states that residential rezonings in the core CBD, adjacent to this site, should not be considered except under specific conditions where other public objectives can be served.
Concerns about downtown commercial capacity are very real, and will be addressed in the Jobs and Economy study recently described to Council. However, without wanting to minimize the loss of commercial capacity on this site, it must be emphasized that this application was submitted prior to recent renewed concern about the jobs future of the downtown and the importance of having jobs close to transit. The site is also not within the Downtown District sub-area where Council established a moratorium on new residential space and conversion of office space to residential use.
The applicant explains, in fact, that the requested by-law amendment will provide the flexibility to enable a hotel development close to the proposed convention centre, in a mixed-use format, in a market where there is no interest to undertake large, single-purpose hotel developments. A mixed-use development would enhance the time-frame and financial viability for the proposed convention centre hotel.
The maximum floor area which is allowed on this site is a floor space ratio (FSR) of 14.35. Approval of the application to allow up to 50 percent of the floor area to be developed as General Office Live-Work rather than Hotel or Office use would mean that the site will still provide commercial development of 8.13 FSR. This is consistent with the 7.0 FSR and 9.0 FSR commercial development potential on nearby CBD sites. It should also be noted that General Office Live-work use, while it may be primarily residential in the short-term, maintains a long-term opportunity for office use.
The downtown business community has generally indicated concerns about the potential erosion of commercial capacity by residential use. In this instance however, a letter of support has been received from the Downtown Vancouver Association which states that the proposed hybrid design will make the project economically viable and able to go forward immediately.
As a final observation, the Shaw Tower on Parcel 2B has commercial floor area of 280,815 sq. ft., including 267,215 sq. ft. in office use. This building was developed by the prospective purchaser of the subject site and provides the only major office space which came on stream in downtown Vancouver in 2004.
PROPERTY TAXATION
A second concern has been expressed about the impact on property taxes of the proposed text amendment.
Taxation issues have not previously been raised with respect to land use and zoning questions as municipal governments typically make land use decisions independent of taxation considerations. There is not necessarily a correlation between optimal taxes and all the other diverse social, economic and design factors that create a successful city. Also, tax implications can be complex to predict. The obvious variable is the differing levels of taxes that different uses garner. Less obvious variables include the propensity of uses to happen – both when and how much – with changing market conditions. In fact, changing land use designations do not affect at all the total taxes collected, only how a given tax total is shared among taxpayers.
Nonetheless several comments related to taxes may be of assistance for Council in considering this matter.
It is generally recognized that there are significant challenges for both hotel and office development in Vancouver's economy at this time. The economics are such that an all-hotel, all office or hotel-office development on this site is not likely to materialize in the foreseeable future. A vacant site will yield less taxes than a fully developed site.
Recent work on live-work uses has shown that there are property assessment difficulties with this use as it does not fit comfortably within our property classification framework. To determine the use within existing classifications requires the B.C. Assessment Authority (BCAA), to conduct annual inspections of units to determine if they are in primarily live or work use or what combination thereof so they can be classed for tax assessment. This is labour-intensive, cumbersome and costly to administer. In the context of proposing a district-wide application of the live-work use in historic areas, staff are preparing a report to come forward to Council shortly recommending that the City, BCAA, the Urban Development Institute and other stakeholders collaborate to develop a solution to the classification issue for submission to the Province. Since the use is widely popular and attractive to the public and will happen legally or illegally, it is important to complete this work. In the short term the existing administrative procedures remain viable because the number of units involved is still relatively small.
Tax assessment of live-work units can hit consumers in unexpected ways. Since residential and live-work property is between 1.5 and 2.2 times more valuable than conventional commercial property, business users of live-work units pay more taxes than their equals in offices. Those expecting residential tax rates get a double surprise because, if classed as a work place, they pay 5.2 times more than the residential class rate on their higher valued premises. This may limit the commercial attractiveness of live-work units, even if the "surprise" factor is moderated through better consumer knowledge. In the long term, a better differentiated classification framework for tax assessment will resolve this; but in the short run, marketers of units are obliged to inform purchasers of the situation.
COMMUNITY AMENITY CONTRIBUTION
A final concern has been raised that this proposal includes no community amenity contribution (CAC).
The staff evaluation concluded that the proposed land use change did not generate significant overall land value increases because the real land value increases that comes with the live-work use is offset by the land value decreases that have happened with hotel and office uses since the current zoning was put in place. Therefore, no CAC was negotiated.
In a letter dated January 18, 2005 (attached), the applicant argues that the situation has not changed. He also notices that the land owner has paid or provided for a full complement of amenities as part of the overall Coal Harbour Community Amenity Contribution, that this contribution was greater than others nearby have contributed, and, most importantly, that since the Coal Harbour area has seen fewer than estimated units developed, there is capacity to serve residents in the currently proposed buildings at the standard levels already provided for. The unused Coal Harbour capacity is estimated at 792 units (and after allowing for the last two buildings still to be developed In Harbour Green), compared to the 200 to 230 live-work units proposed on this site.
Nonetheless, the developer has offered a Community Amenity Contribution of $1 Million and is prepared to work with the City to settle how this contribution will be allocated.
CONSIDERATION
Staff present for Council consideration the applicant’s offer of a Community Amenity Contribution. Should City Council wish to consider and then approve this offer, staff put forward the following resolution:
(c) That, prior to enactment of the CD-1 By-law, the registered owner shall, at no cost to the City, make arrangements to the satisfaction of the Director of Current Planning, on terms and conditions satisfactory to the Director of Legal Services, for a Community Amenity Contribution in the amount of $ 1 Million [as offered by the applicant, or some other figure as set by City Council].
Larry Beasley
Director of Current Planning
Letter from Westbank Projects Corporation
* * * * *
