Weekly Buzz: Construction sector and mixed-use developments

Western Canada's top commercial real estate stories, featuring coverage on construction and labour sectors and mixed-use development regulations

Western Investor
February 2, 2018

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This week’s buzz takes a look at the construction sector and its predicted labour shortage in the coming years, while new, stricter contaminated land regulations are also expected to affect the development pace of mixed-use projects in Metro Vancouver. Meanwhile, redevelopment of Oakridge Centre is expected to become a mixed-use mini-city, adding much-needed residential and entertainment space to the South Vancouver neighbourhood. Ahead of the 2018 BC Budget, BC Greens continue to push bans on foreign ownership in Vancouver.

Here is Western Investor’s pick of the top commercial real estate stories published this week.  


Significant construction labour shortage expected in next three years: BuildForce Canada – Business in Vancouver

Recruitment requirements in the construction industry might pose a significant challenge over the next three years, according to the latest labour forecast released by BuildForce Canada, reported on by BIV.

This may be the largest surge in engineering construction in recent memory, and it’s happening at a time when many skilled trades are already in short supply,” said Bill Ferreira, executive director of BuildForce Canada.

According to the report, as many as 16,000 new workers will be needed as pipeline construction, transportation and liquefied natural gas (LNG) projects continue to ramp up in the province, the most significant expansion in construction pace being between 2019 and 2020.

“BC’s construction workforce will need to expand by up to 23% by 2021 to meet project requirements. That takes careful planning.”

It is expected that between 2022 and 2025, employment will decline but stay well above current levels.

The report also found that new housing-related employment will experience a decline to 23,700 jobs following a five-year expansion plan and that more than 8,000 workers will be relinquished as large-scale projects wind down after 2021.

It is expected that residential construction may recede starting this year through to 2024 as major condo projects near completion.

[Business in Vancouver]


Greens push tough housing policies ahead of BC Budget – Western Investor

The BC Green Party is still pressing for a ban on overseas residents purchasing provincial property, ahead of the upcoming BC Budget announcement.

A new document “Seeking Bold Action: Housing Priorities for Budget 2018,” with tough recommendations for changes to housing policy ahead of February's BC Budget, was released January 31 by the Green Party.

The document sets out the BC Green Party’s #boldaction housing plan, which reiterates calls for a ban on overseas residents buying BC real estate – despite Premier John Horgan recently pouring cold water on the idea.

At a press conference in Victoria Wednesday morning, Green party leader Andrew Weaver said that only people who work, live and pay taxes locally should be able to buy property in Vancouver and BC.

The document also calls for a speculation tax on property being used by absentee investors to park money – taking the form of an annual property tax surcharge, like an empty homes tax. The proposal points out that this would cover existing domestic investors, including BC residents and other Canadians, as well as existing overseas investors.

In addition to the annual absentee investor tax, the plan suggests a tax on short-term flipping of properties. “The tax should be levied on a sliding scale with the highest rate imposed on properties sold within a year, reducing to zero over a given number of years.”

The document also proposes a number of additional measures, including:

-       closing the bare trusts loophole, which allows property owned by a trust to be transferred to an individual or corporation without them having to pay property transfer tax;

-       extending the foreign buyer tax to apply to presales and agricultural land, and allowing municipalities outside Metro Vancouver to opt in;

-       regulating and restricting short-term rentals;

-       rethinking zoning;

-       eliminating the BC HOME down payment loan scheme; and

-       providing means-tested support to those in housing need.

The same day, Vancouver’s sole Green Party councillor, Adriane Carr, tabled a notice of a motion calling on Victoria to restrict foreign buyers in the Vancouver and to tax flipping and speculation, with revenues to go to affordable housing schemes.

[Western Investor]


New contaminated-land rules affect mixed-use projects – Western Investor

Higher standards now in effect for contaminated-site regulations may make it tougher to incorporate residential into old commercial sites.

A movement towards mixing residential into the redevelopment of old commercial and industrial sites has become more challenging after an update to B.C.’s contaminated-site regulations.

The new rules came into effect November 1, 2017, and cover any B.C. development that has not achieved a certificate of compliance from the B.C. Ministry of Environment.

“[The new regulations] are likely to add further delays and costs for property owners and developers seeking to develop, purchase or sell land deemed polluted,” Avison Young noted in its Fall 2017 Metro Vancouver Industrial Overview report  on the subject.

Overall, the new regulations are meant to streamline the cleanup of polluted sites, said Jason Wilkins, a contaminated-sites approval expert with Hemmera Envirochem Inc. of Vancouver.

“[Most] developers should not face further delays,” Wilkins said, noting that contaminated site cleanups in Vancouver date back to the sale of the Expo lands more than 30 years ago. “The process is the same, only some standards have changed.”

In Metro Vancouver, where a shortage of industrial land has spurred the redevelopment of older industrial sites, the process is particularly complex because new projects often mix in commercial, industrial, parkades and, lately, residential use, each of which has different standards for site remediation.

As well, Wilkins added, under the new regulations some previously clean sites could now be classified as contaminated “due to new standards for previously unregulated substances.” Conversely, some previously contaminated sites may now be classified as clean.

The regulations are applied on a project-by-project basis, he said, and largely depend on what was previously on the land and what is now being built on it.

Sites polluted with metal will face greater scrutiny, for example, because of more exacting standards for drinking water.

Raminder Grewal, president of Keystone Environmental of Burnaby, explained that many of the dissolved-metal standards have become more stringent, which could result in developers facing higher overall remediation costs.

Grewal added that redeveloping old gas station sites could also become more complex under the new rules.

“There are a few hydrocarbon groundwater standards that have become more stringent for service stations that could result in increased cost for delineation and an increase in the potential for contamination to have migrated off-site,” he explained.

This is especially true if a contaminated site is to be developed for residential use.

The updated regulations introduce new soil standards for low- and high-density residential development. The standards are more stringent for low-density housing than higher-density residential, where exposure to any soil contaminants is less likely, explained Adam Way, an associate with Harper Grey LLP, an environmental law group in Vancouver.

[Western Investor]


Oakridge Centre to be redeveloped into a 'mini-city' – Vancouver Courier

The Oakridge development is expected to resemble an urban city, including commercial, residential, and entertainment spaces.

They’re not rebuilding a mall. They’re creating a mini city. That’s a key message the team behind the Oakridge Centre redevelopment delivered at a media presentation previewing the project at Whistler’s Audain Art Museum Jan. 29.

The Oakridge display was timed to coincide with the International Council of Shopping Centers convention held in Whistler Jan. 28 to 30.

Oakridge Centre is the second-most productive shopping centre in Canada. It covers 28 acres, is on a main transit route and is designated a municipal town centre in Metro Vancouver’s Regional Growth Strategy.

While rezoning was granted in 2014, progress was stalled for various reasons, including a change in ownership from Ivanhoe Cambridge to QuadReal in June 2017.

QuadReal and Westbank are developing partners in the project. Henriquez Partners Architects is the design lead and Wonderwall out of Tokyo is designing the interior of the mall.

The latest incarnation of the sprawling redevelopment, which conforms to the 2014 rezoning, includes 1,000,000 square feet of retail, 2,600 homes for 6,000 people, office space for 3,000 workers, a 100,000-square-foot community centre and daycare, the city’s second-largest library, a performing arts academy, a live music venue for 3,000 people and the largest public art program in Vancouver’s history, according to Remco Daal, president of Canadian Real Estate for QuadReal. It will also feature a nine-acre park, a one-kilometre running track and produce 68 per cent fewer greenhouse gas emissions than a comparable city of its scale.

Gregory Henriquez of Henriquez Partners Architects calls it “the biggest and most complex project I’ll ever work on in my life.”

“The thing that makes Oakridge unique is its designation as a municipal town centre. The diversity of the uses include everything that a city has. It includes offices, housing, everything,” he said, while highlighting amenities such as the park, which weaves its way through three levels, the civic centre as well as the units of social and rental housing it’s delivering.

“It’s unparalleled. There’s no project in the history of Vancouver that’s delivered these kind of civic amenities in such a short time frame.”

Henriquez describes the overall concept as a new model for development, but says one thing it’s not is a mall.

“It’s not a mall. I don’t think of it as a mall, I don’t think of it even as a shopping centre. I think of it as a micro-city. It’s a little piece of new urbanism that integrates a park, housing, retail, residences, cultural facilities and civic amenities. What is that? It’s a city, right? It’s not a mall.”

Westbank founder Ian Gillespie, who’s worked on previous projects with Henriquez such as the Woodward’s building, said the Oakridge project will create a “cultural hub,” which he sees as a way of city building.

Using the analogy of a stool with four legs to describe what a city is, Gillespie called one leg the built environment or architecture and the other three legs the transportation, energy and cultural infrastructure. Oakridge, he said, brings all four legs together.

“That stool doesn’t stand without that fourth leg. That’s what interests me about Oakridge, looking at it from that perspective.”

Gillespie distances the project from other mall redevelopments that take advantage of a real estate opportunity — a mall with an empty parking lot that may have lost its anchor tenant — to add residential buildings.

“What we have here is one of a handful of top shopping centres in North America and one of the really great residential opportunities in North America, and a couple billion dollars of transportation infrastructure, all coming together to create a really unique opportunity,” he said. “And then saying to ourselves, surely we can do better than just graft some residential on top of a shopping centre. That’s not moving the bar. That’s not creating a new typology. And that’s what I think we’re trying to do here.

That’s what you’ve got with this idea of creating a cultural hub. [But] a cultural hub has to be more than just a couple of words. It really has to be meaningful.”

According to Gillespie, there will be “dozens and dozens of ways” the Oakridge project achieves this, but one of the ways is through Goh Ballet. The dance company is going to open a new practice at Oakridge that will triple the size of the school.

The development team will also work with the city’s chief librarian to figure out the future of the library, while the 3,000-seat music venue will create an “incredible music scene.”

[Vancouver Courier]

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