A1 ADMINISTRATIVE REPORT Date: May 9, 1995 Dept File No: 3119 TO: Vancouver City Council FROM: Manager of Real Estate, in consultation with Associate Director of Planning - Central Area SUBJECT: Southeast Shore of False Creek - Development Consultant and Budget RECOMMENDATION A. THAT Stanley Kwok of Stanley Kwok Consultants Inc. be awarded a contract to act as development consultant for the City's lands on the Southeast Shore of False Creek effective June 1, 1995 for a maximum of 2.5 years, at a maximum annual fixed fee of $240,000 plus GST; to be paid in maximum monthly instalments of $20,000 plus GST; source of funding to be the Property Endowment Fund; and FURTHER THAT the Director of Legal Services be instructed to prepare the necessary documents; it being noted that no legal right or obligation shall arise until execution of the documents. B. THAT a maximum sub-consultants budget of $1,500,000 be allocated for the contract period beginning June 1, 1995; source of funding to be the Property Endowment Fund; and FURTHER THAT the City Manager be authorized to award the sub-consultant contracts and report back on a periodic basis to Council in that regard. C. THAT the Associate Director of Planning - Central Area, report back by July 1995 on the City resources, process and timing required to prepare a policy framework and plan for the Southeast Shore of False Creek. GENERAL MANAGER'S COMMENTS The General Manager of Corporate Services RECOMMENDS approval of A, B and C. While Council's policy is generally to tender for consulting contracts, there have been several occasions in the past where a development consultant has been hired directly, based on knowledge, experience and track record. This report proposes the hiring of Mr. Stanley Kwok without a tender process, again based on the consultant's excellent credentials and his present availability. Given that Mr. Kwok would in all likelihood be our choice under a proposal call as well, I believe that it is legitimate to appoint Mr. Kwok now and thereby save staff and development community time and money in preparing and responding to a proposal call. We would then be in a position to immediately move ahead on a development plan for the southeast shore of False Creek as outlined in this report. COUNCIL POLICY On July 26, 1990, Council identified the Southeast Shore of False Creek (SESFC) as a "let go" industrial area. 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 with respect to the SESFC, the principles of energy efficient community design be incorporated in the planning for the area. On December 3, 1991, as part of the Central Area Plan, Council resolved that housing with an emphasis on families be the main land use when planning for the SESFC. On December 6, 1994, City Council approved the recommendation: " THAT the Special Office for the Environment liaise with the Director of Planning and the Director of Housing and Properties to explore the potential for utilizing City lands in South-East False Creek as a model for sustainable development. " PURPOSE The purpose of this report is to request Council approval to award a 2.5 year development contract for the City lands on the Southeast Shore of False Creek (SESFC) to Stanley Kwok Consultants Inc. and to establish the sub-consultant budget. Planning staff will report back by July 1995 on the required City resources, process and timing to prepare a policy framework and plan for this land. BACKGROUND The Southeast Shore of False Creek is generally considered to be the area between Cambie and Quebec Streets fronting on the False Creek basin. As illustrated on Appendix A, the City owns approximately 42 acres of land which are now leased on a short- term basis, due to the anticipated redevelopment of this area. Appendix A also indicates the private land holdings which total another 6 acres.Council policies, including the Central Area Plan, the industrial lands policy and Clouds of Change initiative, have identified this area largely for housing with an emphasis on housing for families with children. With the exception of the City's Works Yards and the Paperboard site, the light and heavy industrial activities on the City's lands have been replaced with interim uses, such as storage. Over the past two years, Real Estate staff have carried out a historical use study and environmental assessment of the City- owned land on the SESFC. In addition, a site was purchased in East False Creek Flats for relocating a portion of the Cambie Works Yard and a Fraser River waterfront site has been reserved at the foot of Main Street to relocate the existing aggregate and asphalt plant. REDEVELOPMENT PROCESS The False Creek Policy Broadsheets, prepared for the North Shore of False Creek and approved by Council in 1988, provide some direction for the redevelopment of these lands, largely on water and shoreline issues. There is no comprehensive policy framework for the development of a new residential community on this site. Policies will need to be developed in a number of areas, to address previous Council direction to house a higher proportion of families with children and to create an energy efficient community, as well as key aspects of neighbourliness, views, built form and amenity targets. There will be substantial pre- development costs (including consultant fees and infrastructure expenditures), competing interests for use of the lands, and many other issues which might include, for instance: environmental conditions; future of industrial tenants and the Cambie Works Yards; potential retention of existing buildings; land ownership and assembly options; extent of the planning boundaries; type and form of residential use; parks and open space; community facilities and services; rail line opportunities; shoreline and seawall treatment; waterbody access and uses; energy efficient design; and financial return. It will be at least 3-4 years before the City land on the SESFC would be redeveloped, given the planning process and site preparation required. The planning process will involve extensive public consultation and Council direction throughout the following steps: Step 1: Creation of a policy framework for the area. Step 2: P r e p a r a t i o n o f u r b a n design concepts which propose potential arrangements of private and public uses, open space, and circulation patterns. Step 3: Preparation of an Official Development Plan which would confirm the location for utilities, public facilities, open space, neighbourhoods and transportation systems and development guidelines (e.g., False Creek North). Site preparation will require subdivision, servicing and marketing programs to be prepared and approved by Council. Real Estate staff propose that the planning work for the City lands on the SESFC begin now, as: the preliminary environmental investigation has been completed, and there is sufficient understanding of the conditions to consider land use opportunities; the existing industrial tenancies are now of a short-term nature; Engineering staff are now working on a relocation proposal for the Cambie Work Yards; given the extensive lead time required to create developable and marketable parcels, the planning work should commence; and community groups and members of the public are increasingly interested in the City's plans for these lands. The roles of the City, as landowner and as regulator of zoning, are distinctly different. Real Estate staff, representing the landowner (P.E.F.), must ensure the project meets the Property Endowment Fund (P.E.F.) economic mandate whilst the Planning Department, in coordination with other departments, representing the City's other public interests and regulatory responsibilities, must ensure the project meets neighbourhood and City wide objectives. Planning staff will report back by July on the required City resources and timing to process this development proposal and identify other potential issues for Council. In the interim, Real Estate staff propose that a development consultant be retained to begin the technical site work (i.e., survey, geotechnical) and put together a project team. DEVELOPMENT CONSULTANT AND BUDGETS Consultant Selection Past models for major project rezoning and development of City lands, such as the southwest shore of False Creek and Fraser Lands, have involved retaining an external development consultant who took direction from an appointed Committee and was supervised by the City Manager's office. A technical advisory committee of staff was also formed to act in an advisory capacity to the development consultants. The prime consultant/development manager for the southwest shore of False Creek, Riverside and Champlain Heights were all directly retained. Real Estate staff propose that Stanley Kwok of Stanley Kwok Consultants Inc. be directly retained as the City's development consultant for the SESFC, for several reasons: the notion of directly retaining a development consultant for the SESFC was discussed with the PEF Board, at its March 14, 1995 meeting, as this process has been used on other City-owned neighbourhoods. The Board endorsed Stanley Kwok as the development consultant and directed Real Estate staff to report to Council. the best choice for this project is seen to be Stanley Kwok, given his experience as the development manager for Concord Pacific in planning False Creek North and his role as development manager for B.C. Place in planning North Park. the alternative would be to select a consultant through a public proposal call process which would take 3-4 months. There is a risk that Stanley Kwok will not be available at the end of that time, due to other business opportunities. Given that staff believe Stanley Kwok to be the best candidate, it is not considered wise to delay the process and risk losing this consultant. Real Estate staff have prepared a preliminary list of the development tasks which would form part of the development contract; refer to Appendix B. This schedule is intended to assist in defining the terms of a development contract and the tasks and time frame required. Proposed Budgets Based on experience with False Creek North, Stanley Kwok has estimated a maximum annual fixed price budget of $240,000 plus GST which includes all required administrative and support services and overhead. If retained, a project manager would be hired by him, in consultation with City staff on the sharing/division of duties. Based on the experience and salary of the project manager selected, the actual fixed price budget would then be established. The proposed annual budget represents a breakdown of approximately 65% to the lead consultant, 15% to project office costs/overhead, and up to 20% to support staff including the project manager. The overall project team may comprise sub-consultants from the following disciplines: survey; urban design; architectural; geotechnical engineering; civil engineering; traffic and circulation; landscape architectural; environmental; marine ecological; and marina, shoreline and seawall development. The sub-consultants would be retained on an "as-need basis", as the policy framework and concepts are developed. The sub- consultant budget is extremely difficult to estimate at this time, as the definitive list of disciplines is not yet known and a significant cost will be the amount of time spent at public information meetings. Stanley Kwok has proposed a sub-consultant budget in the order of $1,250,000-$1,500,000, based on experience with other major projects. Real Estate staff have also discussed these soft costs with developers of the other major project rezonings, and the costs appear to be reasonable. It is proposed that the City Manager be delegated the authority to award the sub-consultant contracts, after proposals are evaluated by the development consultant and Real Estate staff from a selected short-listed group of qualified proponents. The City Manager would report back to Council on a periodic basis on the contracts awarded. CONCLUSION This report asks Council to award a 2.5 year development contract to Stanley Kwok of Stanley Kwok Consultants Inc. for the City lands on the SESFC, effective June 1, 1995. Approval of consultant and sub-consultant budgets is also requested. While it is a departure from standard City policy to directly retain a consultant without a public selection process, the prime consultant or development manager for the southwest shore of False Creek, Riverside and Champlain Heights were all directly retained. Staff are confident that Stanley Kwok is the best choice for the SESFC project and is presently available to undertake the project. A plan for the area would likely be completed within 2.5 years. Planning staff would report back by July 1995 on additional City resources, process and timing to complete a policy framework and plan for this area. * * * * * APPENDIX B SOUTHEAST SHORE OF FALSE CREEK DEVELOPMENT TIMETABLE The following is a preliminary list of the tasks required to prepare a development plan for the City lands on the Southeast Shore of False Creek, prior to subdivision, servicing and marketing. (a) retain development consultant, approve preliminary timetable and budget (b) retain initial sub-consultants and begin technical site work (c) identify major issues and develop work program methodology (d) report to Council on City resources, process and timing for the area plan (e) prepare preliminary policy for the site (f) draft work program prepared and discussions commence with staff and the public (g) policy framework approved by Council (h) establish rezoning timetable (i) initial response to staff and public issues on the workbook (j) workshop process to evaluate workbook; comprehensive concept plan and ODP/ADP prepared (k) rezoning application prepared and submitted (l) application reviewed by the City (m) preparation of referral report to Council; public information meetings; Public Hearing (n) ODP/ADP enactment * * * * *