Will new commercial developments provide image makeover to Granville Street?
Office space and other developments set to transform key downtown business and entertainment corridor
Glen KorstromBusiness in Vancouver
March 26, 2019
Can redevelopment provide an image makeover and bring high-end bustle to one of downtown Vancouver’s main streets?
That’s the question set to be answered by at least five projects in various stages of completion along the Granville strip.
They promise to provide a broader mix of businesses and more pedestrians during the day – elements that could change the image of an area that some city residents see as threatening.
Office space is key to the transformation.
More professionals have been walking on the street during the day since 2015, when the Nordstrom building’s renovation completed and tenants, such as Microsoft Corp., Miller Thomson LLP and Sony Pictures Imageworks combined to fill 725 Granville Street with more than 290,000 square feet of office space on the building’s upper floors.
Bonnis Properties' former Tom Lee Music building has more recently been renovated and leased to global co-working giant Spaces, which has agreed to temporarily sublease all of its 78,000 square feet of office space to Deloitte.
Bonnis has two other office projects that are in the wings.
David Goldman last May sold Bonnis a Robson Street site, where four small-business tenants have operated for years, on the southeast side of the block between Granville and Seymour streets. City Cannabis Co. is a fifth tenant on the site. It moved there more recently, and intends to relocate across the street to another Bonnis-owned property.
Kerry Bonnis, who owns the company along with brother Dino, told Business in Vancouver that he gave the tenants one year’s notice, and he predicted that he will let them stay past July’s eviction deadline if the city is slow in providing building permits for the 13-storey office building that is slated for his site.
“[The tenants] have been enjoying submarket rents to the tune of one-third to one-half of gross rental rates,” he said.
The public has until April 1 to provide feedback to the city on Bonnis’ second proposed office project on the strip – at 950 Granville Street, in the three buildings to the south of the Roxy Cabaret to toward the 7-Eleven.
The Roxy Nightclub is directly south of the Vogue theatre, which is a landmark because of its large neon sign. Tenants that will be displaced in the three buildings include a Money Mart, a Harvey's, Aldo Shoes and Doner Shop. The womenswear store Ardene had been in the block but it has moved across the street. The Republic nightclub continues to operate although it has agreed to cancel its liquor licence in the future to allow a new licence to be issued by the city and be used by Cineplex for its future entertainment centre.
Bonnis does not need to rezone the site, however, because the site’s zoning allows for a building height of up to 90 feet, including a 75-foot facade, and a 3.5 floor-space ratio (FSR). Bonnis’ plan is for the project to have a 3.4 FSR – three storeys of retail below a 16,500-square-foot single floor of office space.
“We’d like in the future to have even more office on top of the building,” he said. “We’d like to see more density.”
To Bonnis, density is a win-win-win situation: good for tenants, the city and his company.
Property taxes, he said, are shared by all the businesses that are on a site. The larger the building, the more tenants it will have and the more businesses to share the property tax burden, which he said contributes to high lease rates.
He would benefit from having a larger building with more tenants, and the city would see its tax revenue jump.
Not everyone sees it that way, however.
Randy Helten, who has been involved in the CityHallWatch and West End Neighbours real-estate activist groups, said allowing a greater floor-space ratio to allow for a higher building would “trigger a relative surge in property values [in nearby buildings], raising taxes and hurting the viability of other businesses.”
That is because property tax assessments are based on a site’s highest and best use. Were the city to allow larger buildings, the sites would become more valuable, pushing prices up.
Retail Insider Media owner and retail consultant Craig Patterson agreed with that assessment even though he likes the idea of much taller buildings on Granville Street, and across the downtown peninsula, in part because that would create more supply and reduce office rents.
He pointed to CBRE data that showed downtown Vancouver had Canada’s highest Class A office rents at the end of 2018: $37.20 per square foot; downtown Toronto’s were $35.37.
“Granville Street still has a bit of a road ahead of it to be revitalized,” he said, “but it is certainly going along the right track.”
In March, city council approved a liquor licence that many see as the linchpin in the business case for Terrma GP I Inc. to redevelop its former Empire Granville 7 cinema space, which has been empty since November 2012.
Cineplex Inc. would handle inside tenant improvements and build what it calls a Rec Room on the site. The high-end entertainment centre’s restaurant would include giant TV screens, 61 seats inside and 314 seats on an outdoor patio on the building’s third-floor rooftop.
Other transformative projects on the Granville strip include Blueprint’s plan to soon open a new Colony pub where it previously operated the Caprice nightclub.
The pub, at 967 Granville Street, is expected to cater to customers earlier in the day and throughout the week in a way that is different from the nightclub, which tended to cater to partiers late on Friday and Saturday nights.
Other hospitality evolution is taking place at the corner of Granville and Nelson streets, where Pacific Reach is renovating a property that formerly housed:
Doolin’s Irish Pub;
the basement nightclub Belmont Bar; and
the 82-room Comfort Inn.
Patterson sees the office and hospitality projects combining to make the street more upscale.
“Granville Street is perceived as being a dodgy and dingy street,” he told BIV. “If you see people dressed professionally and they are walking around, your perception of safety will be greater.”
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