Present Situtation

Current Zoning

The lands are currently zoned M-2 heavy industrial, and Council on October 22, 1996 in connection with the Industrial Land Strategy, resolved not to change the Southeast False Creek lands from M-2 zoning to I-2, which is also an industrial zoning, in response to representations in public hearing that the area should be left for the time being until a proper rezoning is done on the City lands.

Figure 1: Zoning Map

The I-1 zoning area south of 2nd Avenue is not a "let-go" area and will likely remain industrial use for the long term. The area to the east of the Southeast Shore of False Creek is included in a review currently in progress by the City Planning Department as part of the Thornton Park Planning Area.

City-owned Lands

The City of Vancouver currently own approximately 43 Acres of land at the Southeast Shore of False Creek. For the purpose of this report, the sites are called Works Yard site, former Canron site and former Sauder site which are illustrated as follows:

Figure 2: Land Ownership Map

Egmont Towing currently own the property at 215 West First Avenue located between the Works Yard site and the former Canron site. The City holds an option to purchase the property to be exercised between June 1st and November 30th 2005, at the then market value. Egmont holds a City waterlot lease for the purpose of barge loading and unloading, and the lease expires on November 30th 2006.

Mr. William Sauder and several individuals own several lots fronting on West First Avenue at Manitoba. A Right of First Refusal on the lots is held by Mr. Winkler who owns a building across at 130 West First Avenue. He is currently using the Sauder lots for parking for his own building tenants.

B.C. Transit own the property at First Avenue and Quebec. The property had been occupied as a transit facility for many years until 1988/89 when the facility was relocated. The site has since been left vacant or used for open storage from time to time. The Consultant, in his past experience on the Concord Pacific lands, understands that the B.C. Transit site is contaminated.

Land Ownership History

The City has owned approximately 35 Acres of the 43 Acres of lands in this location since 1925. In 1978, The City purchased the former Dominion Bridge property, and in 1983 the City acquired most of the former Sauder Lumber properties. In 1990, the City purchased the former Canron property. The City is completing the purchase of about 30,000 sq.ft. of former rail right of way from Burlington Northern Railway.

To complete the land assembly for a comprehensive development, it will require the purchase or exchange of land in respect of the remaining Sauder property (17,000 sq.ft.) and the Egmont property (1.9 Acres). However, purchase of the B.C. Transit, a 3 Acre site immediately on the east may not be required, depending on the detailed design on the edge. A summary of the City land ownership details is as follows:

Table 1: Summary of City Land Ownership

Historical Land Use

The lands have been used for various industrial purposes since the early 1900, and the sites were filled in the early 1900’s except the former Sauder site which was filled over the years until 1966.

A wide variety of industries operated on the lands including an incinerator on the City Works Yard site from 1912 to mid 1950’s, steel fabrication by Dominion Bridge and Canron, ship building in the 1940’s on the Canron site, sawmill, lumber manufacturing, and a wide range of operations such as machine shop, storage, coal sales, trucking and transfer, paper recycling, boat yard etc.

Environmental Site Issues

Upon City Council instructions on May 18, 1993 the City retained several consultants and carried out environmental site investigations of the Southeast False Creek lands. The findings indicated that the City Works Yard site has wide-spread metal contamination and the site will be very expensive to redevelop for residential use; the contamination at the former Canron site was found to be not as wide-spread but there is significant ground water contamination; as for the former Sauder site, it was not as significantly contaminated.

A report named Phase II Environmental Assessments - Southeast False Creek - Summary Report dated November 1994 prepared by MTR Consultants Ltd. for the City of Vancouver was filed with the City Clerk in conjunction with a Council report on January 17, 1995. Details on the results of the Phase II investigation can be found in that report; a summary is as follows:

Table 2: Summary of Soil Issue

The contamination issue will have to be addressed whether the sites are developed or not. If the land use remains industrial, the level of remediation will be less expensive than a residential development. Preliminary cost estimates to address the contamination issue are as follows:

• Approximately $10 Million under a no development situation.
• Approximately $15 Million for an industrial park which will have to deal with shoreline, waterfront walkway and soils clean-up of roads and areas occupied by utilities and servicing.
• Approximately $27 Million for a residential development removing contaminated soils only where necessary to minimize cost. The building parcels will have some contaminated soils left in-situ and remediation will be based in part on risk assessment. Park areas will have contaminated soils which will be in part risk assessed.
• Approximately $47 Million for a residential development completely removing the contamination from building parcels, but remediation for park areas will be based in part on risk assessment.
• Approximately $125 Million to completely remove all the contaminated materials from the entire site.

The complete removal cost is very high as some contaminated materials are deep in the ground, and dewatering, sheet-piling and shoring and potential treatment of contaminated ground water during soil removal will be required.

The cost estimates are preliminary, order of magnitude and based on known data at the present time. As further investigation work is carried out, revisions to the estimates are expected.

From a marketing point of view, a complete removal of contaminated soil will eliminate any uncertainty caused by the presence of contamination. However, an opinion from Richard Ellis Cumberland suggests that the marketing uncertainty is minimal, and given that the incremental cost is very high, complete removal and completely cleaning up the buidling parcels are not viable options. Furthermore, in the Creekside Landing concept recommended in this report, the parking levels would act as buffers between the buildings and the risk-assessed contaminated soils. In this report, it is assumed that removal of contamination will be kept to a minimum, and for the Creekside Landing concept analysis, $27 Million is used as the soil remediation cost.

The contamination awareness and subsequent legislative requirements were introduced much after the City has purchased the lands, except that when the former Canron site was bought, the issue was beginning to emerge. Therefore, the significant soil environmental costs are due to unforeseen changes of which the effects have to be dealt with at the present time.

Current Market Land Value

According to an independent opinion of Richard Ellis Cumberland, the City-owned 43 Acres of lands at the Southeast Shore of False Creek has a current market value of approximately $51 Million, on the basis of uncontaminated soils.

The cost estimate to remediate soil contamination for an industrial park development is approximately $15 Million. Therefore, with the soil contamination in place, the current market land value would be in the order of $36 Million.

Based on Richard Ellis Cumberland’s opinion of value, the market values of the privately owned Sauder property and the Egmont property should be approximately $470,000 and $2.3 Million respectively, or a total price of $2.8 Million assuming uncontaminated soils. This value, however, assumes willing seller, and the price required in the case of an unwilling seller may be higher.

Existing City Tenancies

The City lands are currently leased on short term basis except a waterlot leased to Egmont Towing until the year 2006, and the tenancies are:

Table 3: Tenancies on City Lands

The short term tenancies will not limit the timing of a redevelopment of the City lands at this location. However, the Egmont lease may have to be terminated either by a City purchase or a land exchange of the Egmont owned property in order for a comprehensive development to take place.

Currently, the total gross rental revenues is $520,000 per annum, but the City Works Yard do not pay rent and a portion of the former Canron property is vacant due to contamination issues. The rental revenues should be substantially higher if the Works Yard site and the Canron site are rentable.

Last modified: April 8, 1997
(c) 1997 City of Vancouver