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“The most affordable 	land prices in B.C.”

Comox Valley chosen for largest real estate project on Vancouver Island, plus a new $30M resort

BY FRANK O'BRIEN

The Vancouver-based developer spending $100 million on infrastructure for the largest development on Vancouver Island says choosing the Comox Valley for the "instant town" was a no-brainer.

"The Comox Valley represents the most affordable land prices in B.C.," said John Evans, president of Trilogy Corp., who has been inviting other developers and home builders to join in Trilogy's 719-acre Cayet development at Cumberland, just west of Courtenay. The development plan calls for a huge shopping centre, office and institutional space and thousands of new homes.

Evans, who once led the development of Whistler Village, said land values in the Comox Valley are less than anywhere south of Nanaimo on the Island, and "much lower" than in the Lower Mainland or the Central Okanagan.

Cayet evolved from the fact the village of Cumberland was the only island municipality that refused to sign an agreement to provide a 300-metre (1,000-foot) commercial set back from the Island Highway when it was built a decade ago. The province had requested the setback to deter signage and strip malls along the highway that runs down the centre of the island from Nanaimo to Campbell River.

As a result, Trilogy is allowed to build along nearly three kilometres of highway frontage at Cumberland and about two kilometres along the connecting Comox Valley Parkway. The company will cover the $52 million cost of the twin interchanges that will link Cayet to the highways.

Evans said he has had "positive response" to the project from 50 developers, primarily home-building companies. "The residential will come first, then the retail will follow," he said. Seven Alberta companies have registered with Trilogy to look at sites to build on, he said.

"We're basically building a fully-integrated new community with commercial zoning, institutional, residential and mixed-use," said Evans. Zoning permits up to 1,350 residential units on various parcels from apartments to townhouses and 600 single-family homes. Zoning also allows for more than 800,000 square feet of shops and services, including a hotel and casino. A new regional hospital for the Comox Valley is also planned for Cayet.

The Cayet site is former forestry land, and the final development will retain 50 per cent of the land as green space. A Coast Visitor Discovery Centre is currently the only building underway on the site. Evans expects construction of the first phase of Cayet to start early in 2012. 

Big box

Trilogy is not the only large developer that has discovered the Comox Valley. The valley - anchored by the towns of Courtenay and Comox - welcomed Costco Wholesale to Courtenay June 2 with residents packing the 146,000-square-foot store.

The opening of a giant retailer is an indication of the long-term potential of the valley, where the population is close to 68,000 after seeing a 9 per cent growth surge in 2006-2009 and is still growing at around 2 per cent a year.

Vancouver developer Howard Land Group has just launched a $30 million resort project, Comox Bay Marina and Residences, with 61 condominims, connected to the Comox Bay Marina. The decision is partly based on a research study done by RareEarth Project Marketing. The study found that "61 per cent of potential vacation-home buyers in B.C and Alberta would consider Vancouver Island, higher than the Okanagan and anywhere in the U.S.," said RareEarth president James Askew, noting the Comox Valley was the top choice of Albertans.

Also in June, Thrifty Foods announced it will lead a major commercial development on a 12-acre parcel in east Courtenay. A company spokesperson said no contracts have yet been signed with retail partners and the search is ongoing. Thrifty Foods said the centre is expected to be complete in 2012.

Multi-family

The rental vacancy rate in the Comox Valley is tight at under 2 per cent, and detached house prices had barely budged in two years before posting a 6 per cent increase in May - the highest increase on the island - from a year earlier, to $366,777. Investors can still find condos for under $120,000, some of which could throw positive cash flow, local realtors say.

Like many small B.C. centres, it is government spending that is the big cash generator in the valley. This includes the 70-year-old CFB Air Base at Comox, a National Sea Cadets training facility and North Island College. The valley is a popular retirement area for military people and has great golf courses, including the highly rated Crowne Isle, plus outstanding ocean recreation. The Mount Washington Ski Resort is about 30 minutes from the valley floor.

The expanded Comox airport offers direct links to Calgary and, recently, to Fort St. John for oil and gas workers.

"Brutal" DCCs

One drawback to commercial and residential developers in the valley is very high development cost charges (DCCs). The DCCs for industrial development in the Comox average $114,912 per acre and are north of $59,000 per acre in Courtenay. In Cumberland, the industrial DCC is $49,923 per serviced acre. For office or retail the DCCs in Comox are around $6.20 per square foot. This compares with 81 cents per square foot, on average, in the Fraser Valley and 54 cents per square foot in Nanaimo, as two examples. Courtenay charges 78 cents per square foot for commercial projects.

In Courtenay, residential builders are dinged nearly $13,000 in DCCs for a new detached house and $9,279 for a condo, while Comox demands $9,738 per house and $7,239 for a multi-family unit. Both of these are higher than the DCCs for new homes in Nanaimo, Victoria and even the City of Vancouver. "The [Comox Valley] DCC rates are brutal," said a spokesperson for the Central Vancouver Island Home Builders' Association. The high development cost charges may partially explain why total housing starts in the Comox Valley, at around 200 units per year, are now at the lowest level in nearly a decade.

Cowichan Valley

Further south on the island, just south of Nanaimo, the Cowichan Valley saw residential prices slip 9 per cent this May, from a year earlier, to $329,221, which is about $40,000 lower than in the Comox Valley, according to the Vancouver Island Real Estate Board.

The big news in the Cowichan area, which is anchored by the towns of North Cowichan, Ladysmith and Duncan, is a settlement of taxes owing by the paper giant Catalyst, the largest private-sector employer. Catalyst recently paid $10.7 million in back taxes, penalties and interest to the Municipality of North Cowichan.

Cowichan, known primarily for tourism and recreation, is made up of a number of small communities. As well as Duncan, Ladysmith and North Cowichan, these include Chemainus, Lake Cowichan, Honeymoon Bay, Mesachie Lake, Cowichan Bay, Mill Bay, Cobble Hill and tiny Youbou.

Ladysmith recently made news by increasing its development cost charges, raising the rate for a single-family house 43 per cent to $12,780, considered the highest rate on Vancouver Island.


from Western Investor August 2011

 

 


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