POLICY REPORT
URBAN DESIGN
Date: April 2, 1997
Dept. File No. 3103
C.C. File No.: 8206
TO: Standing Committee on Planning and Environment
FROM: City Manager, in consultation with the Manager of Real Estate
Services, on behalf of the Property Endowment Fund Board
SUBJECT: Southeast Shore of False Creek: Planning/Rezoning of
City-owned Lands for a Residential Community
RECOMMENDATIONS
A. THAT Council receive for information a report called
"Creekside Landing, Southeast False Creek" dated January 1997
and prepared by Stanley Kwok Consultants Inc., representing
completion of Phase I of the Southeast Shore of False Creek
development contract.
B. THAT the City Manager be instructed to proceed with Phase II
of the development contract awarded to Stanley Kwok
Consultants Inc. and report back on the terms of reference,
reporting channel, fees, and budget for this planning/rezoning
phase.
C. The Director of Central Area Planning be instructed to proceed
with the Council-approved planning process for the Southeast
Shore of False Creek.
D. The Director of Central Area Planning be instructed to report
back on the Council-approved Sustainable Development
Consultancy for the Southeast Shore of False Creek by July,
1997.
E. THAT Council instruct staff that the existing policies and
objectives for development in South East False Creek be
considered only as a starting point for area specific
development guidelines, and that in the development of area
specific guidelines, Council is prepared to consider deviation
from existing policy to ensure development is both economic
and sensitive to other concerns which arise in the planning
process;
FURTHER THAT Council instruct staff that the analysis of
sustainability of the development reflect its urban context.
The City Manager notes that Council could pass B, C and D,
requiring that the redevelopment proposal comply with existing
guidelines, likely at the expense of full cost recovery to the
City, and flexibility to achieve a development which meets multiple
objectives. However, should Council not wish to approve E, the
City Manager RECOMMENDS F and G below in replacement for B, C & D.
F. THAT Council not proceed further with planning for
redevelopment at this time.
G. THAT Council instruct the Manager of Real Estate Services to
investigate the sale or lease of the False Creek Lands and
report back to the Property Endowment Fund for instruction
relative to a further report to Council.
COUNCIL POLICY
Appendix A provides a comprehensive review of Council policies and
development objectives for the False Creek lands.
PROPERTY ENDOWMENT FUND BOARD POLICY
On January 28, 1997, the Property Endowment Fund Board resolved that the
City Manager be instructed to report to Council outlining the economic
implications of redevelopment of the Southeast Shore of False Creek,
with a recommendation to proceed to the next stage.
PURPOSE
This report comments on the issues related to the redevelopment of
Southeast Shore of False Creek and recommends that the next phase of the
proposed rezoning commence. Council is also asked to confirm its
financial objectives for these Lands.
BACKGROUND
A full factual background on the subject Lands and the history of the
development analysis to date is provided in Appendix B.
PRESENT SITUATION
Consideration of redevelopment of the False Creek Lands is appropriate
at this time. Most major industrial users have relocated away from this
area, or will relocate in the near future. The City owns most of the
land. It is the last remaining industrially zoned area adjacent to the
Creek. Redevelopment here would meet City objectives for additional
residential development near the downtown, water access, completion of
the waterfront walkway, and additional amenities.
The City has assembled the False Creek lands over a considerable period
of time, and at considerable cost. In part, the example of the
successful City redevelopment of the False Creek Lands to the west of
Cambie Bridge provided motivation for these acquisitions. However, the
environment for development has changed significantly since that time.
In particular, new environmental requirements have increased the cost of
redevelopment of industrial lands significantly. And, Council has
established stringent standards for park space, development of walkways,
and level of public amenities in general, and specific objectives to
provide a model of a sustainable community and housing for families and
children in south east False Creek.
The financial climate has also changed. City budgets are more
difficult. Provincial funding to local governments has been reduced,
housing programs have been curtailed significantly, and support for
senior government infrastructure investments is more limited. Taxpayers
have made it clear that they require a high level of fiscal
accountability from governments.
This development context lead to the Council's decision that an economic
analysis of development options for the False Creek Lands be carried out
as a first step in analysing redevelopment of the area. This analysis,
completed by Stanley Kwok Consultants Inc. (the "Consultant"), was to
include development concepts, not as a planning exercise, but to provide
a measure of reality for the economic analysis.
RESULTS OF THE ANALYSIS
The Consultant considered a number of development concepts based on
existing Council objectives. In addition, input was solicited through
an informal workshop and meetings with various stakeholders. Several
concepts were evaluated including an industrial park, a mixed
industrial/residential concept and a number of residential scenarios.
The most viable alternative was a residential development which assumed
a density in excess of 3.0 FSR and a built-form including towers. This
alternative generates an estimated present value return of $8 million
plus the current land value. The proposed residential density is higher
than that approved for False Creek North (2.8 FSR) but lower than that
approved for City Gate (3.76 FSR). A copy of the Consultant's report,
referred to as "Creekside Landing", is on file with the City Clerk.
The Manager of Real Estate Services notes that based on real estate
investment return considerations, a reasonable return would not be
achieved by the Consultant's preliminary concept. Based on the
estimated rezoning, consultant, infrastructure, remediation and land
costs and land of approximately $125 million, a return of $8 million is
not considered adequate compensation for the risk involved in this
development. Alternate strategies, based only on return considerations,
would include selling the Lands or to pursuing interim holding uses and
redeveloping in a more favourable environmental and/or economic climate.
The Consultant found it impossible to meet a number of existing City
policies fully, even at this marginal level of financial return. A
relatively high density and high rise form were also required,
challenging Council's objectives for family-oriented housing and a
conventional view of a sustainable development. In the development of
these Lands, the City is facing a situation similar to those that
existed in Joyce-Vanness and Arbutus Village, where significant
relaxations of the full spectrum of requirements were necessary to
create a viable development.
A factor, not yet considered, which would affect project viability, is
the assumed tenure of the Lands. The Consultant's analysis and economic
viability was based on freehold ownership. Leasehold tenure would
likely further reduce the already marginal returns, especially given the
availability of similar freehold product on the North Shore of False
Creek.
DISCUSSION
In making decisions at this time, Council is setting the framework for
the development planning for the area. It is an appropriate time to
confront conflicting objectives for cost recovery and very high levels
of amenity, before confirming expectations based on existing policies
and objectives.
Development in this area can bring a number of significant benefits to
the City at large and to new residents on the site. New housing will be
consistent with the City's objective to increase the number of people
living close to the downtown; water access and walkways will be
provided; new parks will be provided; and some subsidized housing can
be provided. However, these amenities cannot be provided at the levels
required by present City policy without a very major City subsidy.
This is a significant decision which obviously can only be made by
Council. Accordingly, RECOMMENDATION E of this report proposes that
Council explicitly instruct staff that Council is prepared to modify
existing policies in order to ensure the development is viable and will
return all costs to the City. Should Council not wish to direct staff
that area specific development guidelines can vary from existing
policies to ensure cost recovery, the City Manager believes that Council
should consider the alternatives of marketing the Lands or deferring
development.
The high level of City subsidy required to develop these lands for
residential purposes and meet existing policies fully is certain to be
substantial. Marketing the lands to a developer who will also receive
financial benefits from construction of the buildings may place the City
in a better position to achieve cost recovery while maintaining a high
level of amenity. It is also possible, however, that environmental and
development uncertainties would result in limited interest among
purchasers. This can only be determined by exploring the market
opportunities including interim uses of the site. RECOMMENDATIONS F and
G above, presented as an alternative for Council, would pursue this
direction.
SUSTAINABLE DEVELOPMENT
"What is a sustainable development" is a significant question for this
development proposal, given Council's resolution in this regard.
Council members have recently received a number of letters from people
interested in the concept of a model sustainable development. The
Manager of Real Estate Services notes that cost implications from
sustainable development have not yet been considered in the economic
analysis, as this concept remains undefined. RECOMMENDATION D, requests
an early report back on this subject so any cost implications can be
evaluated.
The City Manager believes that sustainable development in an existing
urban environment raises significantly different questions than those
which would apply in a more isolated area. While a modest density
development is often promoted as more sustainable, there are additional
benefits in considering higher densities in the urban content. Housing
more people creates efficiencies which widen the range of choice in
considering alternate sources of energy and waste treatment. In
addition, higher densities permit more efficient use of services and
locate more people close to downtown employment where walking, biking or
taking transit are viable options. Multiple dwellings, including higher
buildings, maximize energy efficiency and by virtue of views a higher
value could add more profit to achieve other public and environmental
objectives. Too narrow a definition of sustainability will certainly
impact the financial viability of the development; it may also limit the
potential environmental benefit of urban residential development.
RECOMMENDATION E above also instructs staff to consider the issues of
sustainability of these Lands within its urban context.
CONCLUSION
This report provides appropriate recommendations for further work on a
development proposal for south east False Lands, and the City Manager
recommends approval of B, C and D. The City Manager suggests an
additional resolution RECOMMENDATION E, stating that Council is prepared
to consider modifications of existing policies to ensure full cost
recovery.
Alternate recommendations to explore the potential for sale or interim
uses with development deferred until a more favourable economic and/or
environmental climate are submitted, should Council conclude it is not
prepared to instruct staff to consider modifications to existing
policies to ensure cost recovery through development.
* * * * *
APPENDIX A
COUNCIL DIRECTION
(Southeast Shore False Creek)
On June 17, 1975, Council established the Property Endowment Fund
Board for the purpose of managing the Property Endowment Fund, with
the goal of generating a reasonable economic return where possible,
and, supporting the City's public objectives.
On August 30, 1988, Council approved the False Creek Policy
Broadsheets which incorporated a number of policies for Southeast
False Creek including:
Waterfront Walkway:
A continuous public waterfront walkway should be provided;
Residential- Location and Density:
The False Creek basin should develop as a predominantly
residential area to achieve regional and City objectives
and recognize the special amenity of the basin as a place
to live;
For households with children, the average target density
should be in the range of 1 to 1.75 FSR net;
For households without children, the target density should
be an average FSR in the order of 3.0 net;
Densities higher than the target densities may be
approvable if the overall community design proves
acceptable;
Residential- Household and Income Mix:
A minimum of 20% of the dwelling units to be core-needy
households with 50% of these for households with children;
Parks and Public Open Space:
Neighbourhood parks should be provided at a minimum of 2.75
acres per 1,000 population in addition to the waterfront
walkway;
Community Facilities and Services:
Community facilities and services should be provided for
the education, social, health and cultural needs of the
resident, employee and visitor populations including pools,
rinks, schools, libraries, fire, police and daycare, and
the community facilities and services plan will look beyond
the limits of the basin;
Office Development and Industry:
Offices related to a teleport or high-tech industry could
be an alternative use for Southeast False Creek;
Except for industrial uses with an absolute necessity to be
in the basin, industry should not be fostered;
Roads, Transportation and Engineering Services:
Parking should be provided in accordance with the Parking
Bylaw and engineering services and utilities must
adequately serve the development demands;
Appendix A - Page 2
Urban Design:
Water, mountain and landmark views should be considered
from residences, public spaces, bridges and streets when
planning the basin;
The form of development should enhance the openness and
presence of the water and not overwhelm the waterfront
walk;
To integrate visually and physically with the rest of the
city;
The form and pattern of buildings should respond to the
street grid and adjacent built areas of the city;
A positive relationship should be achieved with adjacent
neighbourhoods in all respects; and
Accessibility for mobility impaired in both the public and private realms is a priority.
A copy of the False Creek Broadsheets is on file with the City
Clerk.
On October 16, 1990, Council adopted the Clouds of Change report
which called for planning initiatives that:
Bring housing and employment closer together;
Increase housing adjacent to Vancouver's Central Area; and
The principles of energy efficient community design be in
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On July 26, 1990, Council identified lands, north of First Avenue,
between Cambie and Quebec Streets, on the Southeast Shore of False
Creek as an area that should be released from industrial use.
On December 3, 1991, as part of the Central Area Plan, Council
resolved that:
Housing should be the predominant land use when planning the
Southeast Shore of False Creek; and
The provision of housing for families with children was
identified as a priority for Southeast False Creek.
On November 17, 1993, Council approved the Vancouver Arts
Initiative that included a staff review and report back on the
availability and feasibility of developing a City-owned site, in
particular on the south shore of False Creek, as an Arts Resource
Centre.
On December 6, 1994, in connection with the Clouds of Change status
report, Council resolved that the Special Office for the
Environment liaise with Planning and Properties to explore the
potential for utilizing City lands in Southeast False Creek as a
model for sustainable development.
On February 22, 1995, Council resolved that preservation of a
transportation corridor, capable of facilitating a streetcar line,
be incorporated into the planning program for Southeast False
Creek.
APPENDIX B
BACKGROUND INFORMATION
(Southeast Shore False Creek)
Land Ownership and Tenants
The City currently owns approximately 43 acres of M-2 zoned industrial
land on the Southeast Shore of False Creek (refer to Appendix A). The
Lands are held in the City's Property Endowment Fund, which has the
objective of producing a reasonable return on these assets and, where
possible supporting the City's public objectives. About 35 acres of the
lands have been owned by the City since 1925, and the remaining 8 acres
were purchased after 1978.
The Lands are leased short-term to a number of tenants, with the
exception of a waterlot leased to Egmont Towing until November 2006.
In order for comprehensive residential redevelopment to occur, it may be
necessary to acquire the two privately-owned sites, namely the Egmont
Towing and Sauder properties. The City holds an option to purchase the
Egmont site, exercisable in 2005 at the then market value. If both
properties were assembled, the total land area would be approximately 46
acres. Acquisition of the B.C. Transit site, located at the eastern
edge of the Lands, is not considered essential to the development
planning process.
Environmental Status
The Lands have a long history of industrial uses including works yard,
incinerator, ship building and metal fabrication. In May 1993, MTR
Consultants Ltd. ("MTR") were approved by Council to complete
environmental site investigations to characterize the environmental
condition of the Lands for the purpose of determining the economic
feasibility of remediation to residential standards. In January 1995,
Council received MTR's report which concluded that most of the City
Works Yard site was not economic to redevelop, but that the remaining
lands likely could be economically remediated for residential
development. On May 2, 1995 and May 28, 1996, Council approved further
environmental investigation work which is currently underway.
Generally, the Lands have significant contamination that will be costly
to remediate, currently estimated to be in the order of $27 million for
residential development.
City Works Yard
On December 3, 1991, Council resolved that the City Works Yard location
be reaffirmed until at least the year 2003. However, this time table
was subsequently accelerated as, pursuant to Council approval on
September 28, 1993, the City purchased the former Burlington Northern
Railways lands at Malkin Avenue, in part for the purpose of relocating
of the Works Yard. Furthermore, on January 11, 1996, Council approved
the relocation of the aggregate handling and asphalt operation from this
Works Yard to the Fraser River.
Appendix B - Page 2
Planning Process
In May 1995, Council resolved that a development consultant be retained
to plan and rezone the Southeast Shore of False Creek lands. A proposal
call for development consultants was advertised in January 1996. A
selection committee, comprised of two Councillors and two senior staff,
recommended that Stanley Kwok Consultants Inc. be retained; the
appointment was approved by Council on June 11, 1996. The contract was
for two years and comprised two phases: Phase I to be an economic
feasibility study which would be evaluated by Council before proceeding
to Phase II, the planning/rezoning stage. On October 26, 1995, Council
approved the planning boundaries, management structure, process, timing
and funding for the preparation of an Overall Policy Statement, an
Official Development Plan and zoning for the Southeast Shore of False
Creek. However, as the decision to plan/rezone the Lands depends on the
Development Consultant's Phase I feasibility study result, the approved
planning process did not proceed. If Council decides to commence the
planning/rezoning of the Lands as recommended in this report, then the
approved planning process will get underway.
On October 22, 1996, Council considered rezoning several areas from the
M-1 or M-2 to I-2 which is also an industrial zoning. Delegations at
public hearing requested that the Southeast False Creek area should be
left M-2, until a rezoning was done on the City Lands; Council resolved
to retain M-2 zoning for the Southeast False Creek area.
Other Actions
On July, 18, 1995, Council approved the construction of a ferry
dock at the east end of False Creek which is now completed.
On May 28, 1996, Council approved funding for the Water Opportunities
Advisory Group (commonly called the "Blueways Team") for public
consultation and development of water-use policy guidelines. There has
been some public discussion regarding the Southeast False Creek lands.