Agenda Index City of Vancouver

POLICY REPORT
URBAN STRUCTURE

Date: July 7, 1998
AuthorLoc.: DeMarco/Nowlan
7684/7712
CC File No. 5317

TO: Standing Committee on Planning and Environment

FROM: Director of City Plans, in consultation with the Director of Central Area Planning

SUBJECT: Accommodating High Technology Uses in Industrial Areas

RECOMMENDATION

For CONSIDERATION

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

Council approved the Industrial Lands Strategy in March 1995 which seeks to retain most of the city's existing industrial land base for a variety of industrial and city-serving activities.

Council approved a new district zoning schedule (I-2) in November 1996 as an implementation measure for the Industrial Lands Strategy to better accommodate the needs of contemporary industry and to ensure compatibility of industrial areas with adjoining residential areas. Approximately 1000 acres were rezoned from M-1 or M-2 to I-2. The main features of the new I-2 zone are:

a) recognizes labs, production studios, software manufacturers as bona fide industrial uses;
b) increases the amount of allowable office space from 25% to 33% of total floor space; and
c) defines computer programming as an office use.

Council approved the False Creek Flats Preliminary Concept Plan in June 1996 which identifies portions of False Creek Flats along Great Northern Way and the Trillium lands as a suitable location for a high amenity urban industrial park. This concept plan also identifies lands around the SkyTrain station and Main Street as suitable for office development.

PURPOSE AND SUMMARY

This report responds to a May 12, 1998 request from Council for staff to report back on ways to accommodate more high technological uses, such as computer programming and software development, in the city's industrial areas. Recent studies on the outlook of the BC economy highlight the importance of high technology sectors in providing new job growth. In recent years, growth in the high technology sector in BC has exceeded 20% per year. The City's challenge is to ensure that there is ample land and buildings to respond to the needs of this growing sector.

High technology industry encompasses a variety of uses. These include the design and/or manufacture of computers, electronics, telecommunications, precision engineering, robotics, biochemistry, health care and related activities. All of these users are currently accommodated in the city - some in industrial zones and some in commercial zones.

The current issue is that some high technology uses, which do not involve goods production, are seeking sites with large floor plates to facilitate flexible work stations and support services. In the city, such sites are usually only available in industrial areas. In the light industry, I-2 areas, office-type activities are limited to 1 FSR to minimize the impact on land values and maintain sites for other uses. Industrial uses are permitted the full 3 FSR. The policy issue is whether the uses permitted in light industrial areas should be broadened to accommodate a wider range of high technology activities.

This report compares the implications of:

Maintaining the existing zoning schedules. This could result in the loss of some high technology jobs from the city. However, if the jobs locate elsewhere in the region, they contribute to the Livable Region Strategy of increasing suburban job opportunities and to overall regional growth which indirectly benefits the city.

Amending or creating new industrial district schedules, in all or part of the industrial areas, to permit high technology product design which does not involve the manufacture or distribution of goods. This could result in some high technology firms, specializing in computer programming, which might have otherwise located elsewhere, locating or remaining in the city. The benefit to these firms is easy access to the wide variety of related businesses in the city.

This report recommends increasing opportunities for high technology businesses by creating a new use: "High technology product design which means the design, but not necessarily manufacture, of commercial products in the fields of computer software, electronics, telecommunications, precision engineering, robotics, biochemistry, health care, and related industries."

The report discusses several options for the implementation of this use term. The recommended option is the creation of a new I-3 Industrial District Schedule. The I-3 Schedule would include the new high technology use in addition to all the uses currently permitted in I-2. Several locations with good access to rapid transit services are proposed as areas for the new I-3 zoning. A second option, offered for consideration, is to amend the existing I-2 District Schedule to include the new use.

BACKGROUND

There are currently 690 ha ( 1700 acres) of industrial land in the city. (See Appendix A). This is about 6% of the City's land area. Approximately 46,000 jobs are located on these lands. These jobs primarily include port-related and city-serving industries such as building

and machine repair/maintenance, distribution, medical labs, film studios, printers, and manufacturing and associated secondary activities including retail and office services. Vacancy rates in the city's industrial areas remain low, at under 3%.

Excluding port and water-related heavy industrial lands, there are 400 ha (1,000 acres) of industrial zoned land. In 1995, Council approved the Industrial Land Strategy to maintain opportunities for a variety of city serving activities on these lands. In 1996, Council approved a new district zoning schedule (I-2) as an implementation measure for the Industrial Lands Strategy to better accommodate the needs of contemporary industry. Many types of high technology users were given more development opportunities through this revision, such as software manufacturers, production studios, and labs.

The I-2 zone allows a maximum of 3 FSR for a wide range of industrial uses, including manufacturing, distribution, studios, labs. General office, including computer programming, is allowed in a proportion of one-third general office use to two-thirds of built industrial use (i.e. if 2 FSR industrial use is provided, then 1 FSR may be provided for general office use).

During discussions on the creation of the I-2 zone, some industry operators and representatives from the development industry asked for a higher proportion of office space to allow higher intensity use of industrial sites. As a result of these discussions the amount of allowable office space was increased from 25% to 33_% of the total floor area. However, stand alone offices are not permitted in the I-2. This proportion of office space in the I-2 zone strikes a balance between ensuring a supply of affordable industrial space while at the same time making efficient use of industrial land by allowing some flexibility to create office space for other users.

Stand alone offices are permitted in two industrial areas, the Mount Pleasant I-1 and the IC zones, both of which are well served by transit. General offices are permitted to a maximum of 1 FSR. Both locations are popular for smaller computer programming firms. However, the lots are small in these areas, and it is difficult to assemble large sites. Lately, commercial and residential uses have been out-competing industrial uses in these areas.

DISCUSSION

Recent studies on the outlook of the BC economy highlight the importance of high technology sectors in providing new job growth. In recent years, growth in the high technology sector in BC has exceeded 20% per year. High technology industry comes in a variety of uses. There is no precise definition of "high tech industry." The term usually refers

to the innovative manufacture and/or design of commercial products in the fields of computers, electronics, telecommunications, precision engineering, robotics, biochemistry, health care and related industries. All of these users are currently accommodated in the city -some in industrial zones and some in commercial zones.

In the past few months there have been inquiries from a variety of high tech users such as a high tech manufacturer of printers and a number of medical laboratories wanting to locate in the city. The existing I-2 zoning is suitable for all of these uses but they simply could not find a building to recycle or a suitable land package.

Some software developers are having difficulty finding sites in the city, especially larger companies that may have outgrown their space in Burrard Slopes or the downtown. Commercial sites are available but these are often too expensive. Some software developers have chosen to locate in business/office parks such as Crestwood in Richmond or Discovery Park in Burnaby. They make this decision based on a number of factors: cheaper land, large floor plates, ample free parking, desire to own building, not being able to find a site in the city, and locating closer to their labour force.

This loss of potential city jobs has raised the question of whether the City should take further actions to encourage the location of high technology firms. Two choices are discussed:

keeping the existing zoning schedules, with the consequences that, on one hand, land will remain available for a variety of service uses while, on the other hand, some high technology jobs will leave or not locate in the city; or

increasing opportunities for high technology businesses, noting that, on one hand, this will increase opportunities for a growth sector of the economy, while, on the other hand, depending upon how this is done, there may be consequences to commuting patterns, other lower value industrial uses, and to the growth of emerging regional employment centres.

There are a number of City-wide objectives to consider in evaluating the choices:

achieving a diversified and healthy economy (CityPlan);
discouraging commuting by car by encouraging higher employment density uses to locate in areas well served by transit (Transportation Plan); and
keeping a stock of affordable industrial land (Industrial Lands Strategy).

1. Maintain Existing Opportunities for High Technology Activity.

Existing zoning schedules permit high technology activities to locate in the city:

a) Existing commercial zones permit a wide range of office-type computer related businesses. A "Business in Vancouver" compilation from April 1998 listed the top 22 software developers in the region. Five out of the seven companies located in the City are located in the downtown. For example:

b) The recently adopted I-2 industrial zone permits up to 3 FSR for high technology manufacturers who require production space, storage, and loading or for biomedical firms which may be handling hazardous chemicals and have special building requirements. In the I-2 zone, up to one-third of developed space can be general office use. Examples of high technology activities in I-2 areas include:

Any land use decisions result in choices between competing uses for scarce land. The existing zoning schedules provide opportunities for high density business activities in commercial areas which can be easily served by rapid transit. A variety of lower density, production oriented businesses locate in industrial areas. Separating the two uses provides space for a balance of activities in the city. To the extent that the activities are combined, it is harder to provide adequate transit services to dispersed sites. Also higher value uses will bid up the price of land impacting other lower value industrial uses.

Should Council choose to maintain the existing zoning schedules, land will remain available for a variety of industrial and service uses which have difficulty competing in the land market with high technology activities. The down side of this action is that the city will likely continue to lose job opportunities in the high technology field. However, provided the jobs locate elsewhere in the lower mainland, the regional economy is stimulated and the Livable Region Strategy of creating complete communities throughout the region, to minimize commuting, is enhanced. Should Council prefer this option, then no action needs to be taken.

2. Increase Opportunities for High Technology Activity.

As noted, some software developers are not locating in the city due to a lack of sites where a large floor plate can be assembled at an acceptable land price. Consequently, some firms are locating in business/office parks such as Crestwood in Richmond and Discovery Park in Burnaby. The City could provide more opportunities for software developers and other high technology businesses which do not require production or distribution facilities by creating a new use term for this type of business and providing additional areas where these businesses are permitted as stand-alone uses.

A possible definition for an expanded range of high technology uses is:

"High technology product design which means the design, but not necessarily manufacture, of commercial products in the fields of computer software, electronics, telecommunications, precision engineering, robotics, biochemistry, health care, and related industries."

This definition includes uses typically defined as "high technology" which do not include on-site manufacturing or distribution activities. The term does not include more traditional office uses such as banks, legal firms, or corporate business offices. However, Council should note that the physical space in which computer-based high technology activities occur looks like more traditional office buildings. This may lead to problems of enforcement.

Should Council wish to create this new use term it could be applied to all light industry (I-2) areas or it could be permitted in selected areas (e.g. areas with good transit services). The following sections outline several options:

2.1 Amending the I-2 Schedule to permit a wider range of high technology uses; or
2.2 Creating a new high technology use term and applying it in selected areas. This could be done by rezoning some industrial areas to I-1; creating a new I-3 High Technology District Schedule; or creating high technology business parks through CD-1 zoning.

2.1 Amend the I-2 Light Industrial District Schedule to Permit a Wider Range of High Technology Uses.

2.2 Create a New Use Term for High Technology Uses and Apply it in Selected Areas.

After balancing:

the choice between retaining land for industrial and city-serving activities and providing more sites for a wide range of high technology activities, and
the advantages of blending a mix of uses with possible enforcement difficulties,

staff recommend pursuing the idea of creating a new I-3 District Schedule to encourage a broad range of high technology activities in areas easily served by rapid transit.

There has not been sufficient time to prepare a draft zoning schedule and identify areas for rezoning. Consequently, if Council wishes to pursue this option, staff recommend a report back (Recommendation A). The report would propose a new I-3 District Schedule which:

includes a new definition for high technology uses, which does not require the need for on-site manufacturing or distribution of products;
permits these uses to a full 3 FSR;
identifies areas well served by rapid transit for rezoning; and
includes conditions for redevelopment such as development cost levies.
.
Assuming any public process associated with creating the I-3 District Schedule occurs as part of the Public Hearing process, staff can report back with a referral report by October.

CONCLUSION

Creating a new I-3 Industrial Schedule for a wide range of high technology activities and rezoning sites near rapid transit for this new zone meets a variety of city objectives. It promotes a diverse economy. It provides a development opportunity not currently available for large lot industrial areas in the city while at the same time protecting some industrial space for a broad spectrum of industrial users. An I-3 zone provides opportunities for high technology activities to occur in areas with multiple ownership.

The I-3 alternative could provide opportunities for more intense development in parts of False Creek Flats and near rapid transit stops in the Broadway-Grandview corridor and possibly parts of Marine Drive industrial areas when rapid transit to Richmond is implemented. Together, False Creek Flats and the Broadway corridor could add over 80 ha (200 acres) of lands with immediate potential for I-3 zoning. These initiatives could result in almost 25% of the light industrial land base devoted to a broad range of high technology uses.

Creating an I-3 schedule does not preclude comprehensive development of selected large sites in single ownership. A companion report recommends a dedicated team-approach to work together with Finning to realize a planned high technology park on their lands.

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APPENDIX A
Page 1 of 2

MAP

ATTACHMENTS TO THIS DOCUMENT THAT DO NOT HAVE ELECTRONIC COPY ARE AVAILABLE ON FILE IN THE CITY CLERK'S OFFICE

APPENDIX A

Page 2 of 2

The stock of remaining industrial land in the City is as follows:

Industrial Zoning No of hectares(acres)
M-2 heavy industrial- mostly port back-up , river frontage, and rail 202 (500)
I-2 light industry(excluding approximately 150 lands occupied by non-industrial uses, ie highway frontages on Marine/Grandview, but including railway lands in False Creek Flats) 344 (850)
I-1 Mount Pleasant 40 (100)
IC Burrard Slopes/Brewery Creek ( many commercial and housing sites) 16 (40)
Total 602 (1490)

APPENDIX B

           
Business Park Zoning in Selected Municipalities      
           
City Zone Permitted Uses Max
FSR
Max Site Cover Max
Height
Richmond I3 - Business Park Industrial Light Industry 1.0 50% 40 ft
    Office      
    Workshops      
    Business Services      
Surrey IB - Business Park Light Industry 0.75 45% 40 ft
    Office      
    General Service      
Burnaby M8-Advanced Tech
Research
Scientific or Tech Research 1.0-1.2 50% 50-60 ft
    Business Offices      
           
Vancouver I-2 Light Industry Light industry 3.0   60-100ft
    Studios 3.0   60-100ft
    Laboratories 3.0   60-100ft
    General Office , excluding
finance, insurance, legal in combination with other
industry uses
1.0   60-100ft
         
           
         

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