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ADMINISTRATIVE REPORT Date: December 1, 1997
CC File No. 4657
INFORMATION
The General Manager of Community Services submits this report for INFORMATION.
COUNCIL POLICY
Council has instructed that, prior to consideration of a proposal for the demolition of an "A" listed building on the Vancouver Heritage Register, a formal independent consultant’s report on the physical condition and the economic viability of retaining the building should be reviewed by the Director of Planning. The consultant’s report is to be carried out at the expense of the applicant. Council reaffirmed this policy on April 18, 1991.
On March 28, 1995, Council gave special consideration to the Opsal Steel site (and other heritage sites) by supporting strata-titled artist studios in industrial districts only when it involves the retention of a heritage building.
The purpose of this report is to inform Council on how staff propose to respond to the owner’s request to have the Opsal Steel building "de-listed" from the Vancouver Heritage Register.
The site is located at the northwest corner of Quebec Street and East 2nd Avenue. The zoning for the site is M-2 which allows for manufacturing uses and limited commercial uses. It is also part of the Southeast Shore future sustainable community planning area.
Policy on Demolition of "A" Buildings
Council adopted the policy that requires a review of retention alternatives for buildings in the "A" evaluation category as a result of the demolition of the Georgia Medical-Dental Building in 1988. The policy was adopted to ensure that due diligence was undertaken when "A" buildings were being considered for demolition. In 1991, Council reaffirmed the policy and confirmed that the study was to be completed at the expense of the applicant when dealing with an owner’s proposal to demolish 1037 Matthews Avenue. As a result of the policy, this Matthews Avenue house was rezoned and the house was preserved. Other examples where this policy has assisted in generating mutually agreeable retention options for "A" listed buildings includes Bollert House (Alder and West 10th Avenue), Abbott House (Jervis and West Georgia) and the former Oakherst Hospital (Oak and West 58th Avenue). Often staff and the owners of "A" listed buildings are able to negotiate mutually beneficial solutions using heritage relaxation provisions to facilitate their retention and protection. However, the "A" building at 706 East 12th Avenue was demolished after an independent consultant study proved retention was not economically viable.
Completed in 1918, this building was originally constructed for Columbia Block and Tool Company. It is the largest surviving example of heavy timber frame construction that was typical of early False Creek industrial buildings. The building was originally board and batten siding and subsequently was covered over by the horizontal wood siding that is visible today. The corner addition, built in the Moderne style, dates from the 1940s. The building is a neighbourhood landmark and is listed in the "A" evaluation category on the Vancouver Heritage Register.
The owner, Mr. Thomas Dunn, has requested the Opsal Steel site be de-listed from the Vancouver Heritage Register. In the owner’s opinion, the heritage listing has negatively impacted his ability to sell the property which has been on the market for four years. During this period there have been at least three enquiries of a serious nature made to the Planning Department proposing to retain and renovate the building for different uses. Planning staff have endeavoured to find viable alternatives (see Appendix A). None of these proposals has proceeded. The owner feels that the failure of these proposals is sufficient evidence to indicate that the retention of the existing building is not economically viable. However, while some structural and economic evaluation has been carried out in the context of various inquiries, a full economic analysis has not been completed by the owner.
Staff’s objective is to find a way to be fair to the owner and allow him to proceed with the sale of his site. On the other hand, staff want to ensure that Council policy is followed and opportunities to save the heritage are not foreclosed. Although the owner has not undertaken all the analysis to determine the viability of retaining the buildings, he has made a diligent effort to sell the site with the heritage resource. Staff also recognize that the delay of sale is problematic for the owner.
To address both the owner’s and the City’s heritage interests, staff have completed an economic analysis of the site in-house. It involved a joint effort of Real Estate Services and Planning staff and hiring a private sector quantity surveyor with heritage consultant funds. This work was completed as a gesture of cooperation and to ensure that the intent of Council’s policy is followed. The owner has supported this alternative approach to resolving his dilemma.
The existing structural analysis and a number of development scenarios were explored. The former indicates that there is evidence of significant structural problems requiring high repair costs. The costs to convert the building to appropriate market uses, i.e., strata commercial and Artist Live/Work (ALW) studios are higher than building new. The physical limit imposed by the existing building shell means a low achievable density in a renovation. In the scenarios analysed, sales revenues will not be high enough (not enough floor space) to cover the costs of renovation, resulting in heavy losses. In addition, since smaller parcels are selling in the area and the site is currently comprised of five parcels, the owner may wish to sell off individual parcels.
It was concluded that to renovate the buildings under current market conditions, which are expected to continue, is not feasible. To make preservation viable would require the outsideinvestment of capital through an instrument such as transfer of density. The transfer of density policy allows heritage bonus density transfers within this M-2 zoning district. The section of this M-2 district is a "let-go" area which is now predominantly commercial is awaiting a planning study and potential up-zoning. Unfortunately, this may limit the desirability of additional density from the heritage site.
At the same time, given that this is an "A" building, staff would like to provide optimal opportunity for its retention. Staff believe it would be prudent to keep the Opsal Steel building on the Heritage Register for two reasons. First, there may be other factors effecting the sale of the site including: lack of market interest in this particular site by prospective purchasers who are uninformed of the range of incentives available for this heritage site (including the ability to market ALW studios), as well as, uncertainty over the future of the area which is the subject of a planning study. While still on the Register, the site is a candidate for a broad range of land use incentives, including transfer of density within this particular M-2 zoning district, variances to use, floor space, height, parking and subdivision regulations. Retaining the listing on the Register leaves the opportunity for potential buyers to take advantage of heritage incentives.
Second, removing the site from the Register would set a bad precedent as a way of circumventing the Council policy requiring the due diligence of a financial analysis.
Therefore, the Director of Community Planning will prepare a letter to the owner confirming that the owner has met the requirement for an economic analysis of this "A" listed building and the owner or any future owner can proceed to redevelop this site without the encumbrance of the heritage resource. This applies to single or multiple-parcel redevelopment. The site is currently subdivided parcels and the owner can change the configuration without requiring demolition of the heritage structures. However, a Demolition Permit will be issued for the heritage structure, or a portion thereof, following the issuance of the Development and Building Permits for one or several parcels.
Comments of the Vancouver Heritage Commission
The Vancouver Heritage Commission discussed the owner’s request and the staff proposal at their meeting on November 17, 1997 and resolved:
"THAT since the heritage significance of the Opsal Steel building has not changed, the Vancouver Heritage Commission resolves that the building’s "A" listing on the Heritage Register remains.
AND THAT the Vancouver Heritage Commission further recommends that city staff proceed with a financial analysis of the property."
A financial analysis, completed as required by Council policy for "A" listed buildings, determined that there are no viable heritage preservation options for the Opsal Building at this time, unless outside capital is generated through a transfer of density. However, given the limited ability to transfer density from this site, the likelihood of this occurring is remote. The Director of Community Planning is prepared to issue a letter to the owner stating that the requirement of Council policy for "A" listed buildings has been met and that the owner can proceed to sell this site unencumbered by the heritage resource.
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