Timing

When is the right time to develop Southeast False Creek? To answer the question, it is appropriate to review a few facts:

• Approximately two years would be needed to plan and rezone the lands; and
• Due to the large size of the lands, over 40 Acres, a longer time frame is needed to develop the lands;

Therefore, unlike a zoned smaller site that is tactically positioned to take advantage of an active real estate market within a relatively short time frame, the Southeast Shore of False Creek has to gain approval of a suitable zoning first, then spend a number of years to provide new infrastructure and amenities. Current market attributes, upon which a decision that the development should proceed or not is based, may or may not hold true two and more years hence, when the rezoning is approved and the infrastructure and amenities are provided. The time-lag and uncertainty will always remain at any given point in time, when a decision as to whether to develop or not, is required. Therefore, it is appropriate to look not only at current market condition, but also longer term aspects in this case.

Over a longer term, the following points seem relevant:

• A recent long range study by Urban Futures Institute reaffirms a strong growth for this region and forecast a need for 500,000 new households for 1.2 Million people in the next 25 years;
• A no action decision will not address the housing need and the provision for public amenities at the Southeast Shore of False Creek;
• The economics of no development would see the current City land asset value diminishing to zero in about sixteen years time;
• A development of the Creekside Landing concept may produce a modest return and meet the City objectives for the lands; and
• An industrial/office park development will not provide for needed housing and public amenities, and the development would not be economically viable.

It is therefore, appropriate for the City to provide opportunities to create supply of needed housing and public amenities, at the Southeast Shore of False Creek, and proceed with the planning and development for the Southeast False Creek lands

However, when the rezoning is completed, the City may wish to pause, to review the market condition at that time before moving on to construction of new roads, utilities, services and public amenities.

A strategy normally open to the City is to not develop the lands but to hold the real estate as an investment for the short to medium term, until a better market condition, or the competition from the Northshore of False Creek is no longer relevant. However, this strategy is not available in this case, as significant soil remediation costs will be required within the short term, and rental revenues will not be sufficient to recover the costs and land carrying costs, resulting in a significant investment loss.

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