BCBusiness

bcbusiness.ca OctOber 2016 BCBusiness 77 views. False Creek South was built during the heyday of the 1970s, when all three levels of government were committed to the cause. At the time, the land around Granville Island was an unremediated industrial site—hardly desirable in a sub- urbanized city where the single-family house was still the preferred tenure. To build multi family dwellings was con- sidered ed¯y, progressive and—almost unbelievably now—"dense." The downside of leasehold land, of course, is that leases come up for renewal—and property values diminish as that date approaches. Landlords could choose to not renew and buy the units back and rezone the area; they could also jack up leases to a market rate. The 5,000 or so False Creek South residents are dealing with those concerns now as the "rst of their leases come up for renewal, starting with Marina Housing Co-op in September 2021. (Most of the land is city-owned, with a small amount of properties owned as freehold.) Consultant and former city planner Nathan Edelson is currently helping resi- dents work out a deal with the city. "Here you have one of the best communities in the world, as a planned community—it put Vancouver on the inter- national planning map," says Edelson. "We have housing built 40 years ago that is enormously a‚ordable, and virtually all the co-ops are well managed. The challenge now is: How do we update it for the new century?" Mukhtar Latif, the city's chief housing o¬cer, says it's too early to o‚er speci"cs on the upcom- ing plan for False Creek South. City o¬cials are still trying to hammer out the current values of the leases, he says, but adds that they are considering a mix of housing so that people can age in place. There is also potential for in"ll, as well as redevelop- ment of existing housing. "Coming from London, I see the same challenges: limited supply, pressures on housing," says Latif, who moved to Vancouver three years ago. "Everyone is really struggling to "nd the funds to support the range and amount of need. We can create new supply, but that takes time. We can create a certain level of a‚ordability, but we need other levels of D etails of the deal between the province and malaysian developer Holborn–announced in 2008–were kept secret and remain so to this day. "i can't tell the terms of that deal. it's confidential," Holborn ceO Joo kim tiah said in an interview with BCBusiness. it's estimated that he agreed to pay $300 million for the little mountain site, which he would not confirm nor deny. but the belief among many in the development community is that Holborn only paid a 10 per cent down payment to hold the property until it was rezoned. and total payment could be many years off: a bc Housing spokesperson said the balance owing by Holborn will be paid incrementally, as each phase of the little mountain project is completed. while tiah would not confirm any of the numbers, he did offer an illuminating explanation as to how such a negotiation might have worked. "without saying too much, let's say the price is $300 million. the guy is not going to cut you a cheque for $300 million on Day One," says the 36-year-old developer, whose other proper- ties include trump tower, opening this fall, university Heights in squamish, which is in presales, and a heritage property at Dunsmuir and richards. "there are certain ways to structure deals… say the vendor is cash-strapped: if the price is $300 million, and one guy says, '$150 million cash—do i have the property?' the vendor might say, 'Ok.' but if the vendor is like, 'i don't need the cash. i need it progressively—the bigger number is more important to me over time.' He might prefer this structure. the vendor and the buyer have to structure a deal that works best for both parties. and we managed to do that." michael geller worked as a consultant on behalf of vancouver- based polygon, one of the other developers that bid on little mountain. "Holborn blew everybody out of the water," he says. "i personally was very disappointed because, knowing this was the first major rejuvenation of a bc Housing project, i thought it was really important it went very well. polygon and no doubt oth- ers had some creative ideas in terms of how to accommodate a broad mix of households. and instead the bid had been won by someone with no track record." tiah rejects suggestions that Holborn, having held the land for seven years, will now try to resell it for a handsome profit. "i have every intention to develop the project. i'm happy with the real estate [market] as well, but i'm not going to count my chickens before they hatch. look, there are risks involved. if, god forbid, the market tanks 50 per cent in the next eight years, what happens then? if the market goes down, do i get a refund? i don't." —K.G. How the little mountain Deal was structured Land Legacy SFU has leased some of its prop- erty on a 99-year term to developers at UniverCity, which will eventually house 10,000 residents Joo KIM TIah

• Cover