A delicious find in the Vancouver viaducts report going to council today. (That would be Tuesday, Oct. 20, the day after the federal election and when the world started spinning in a different direction.)
Which was: Long ago, when the province sold the Expo lands to Li Ka-shing for what many called a fire-sale price, it wrote in a provision to the agreement that the province would get some of the profits if Concord ever got permission from the city to build more than 12 million square feet on the land.
At the time, it seemed unlikely.
But here we are. Concord is now within 400,000 square feet of that limit and will exceed it when it builds its Northeast False Creek towers, whatever level of density the city finally agrees to give. (Apparently the viaducts take-down could result in a million more square feet of density in the area, but it’s not all Concord’s.)
And the city wants the anticipated share of the money the province is going to get, in order to pay for housing. (First response out of the province appears to be along the lines of Drop Dead, Vancouver, but this is just the start of negotiations, I’m sure.)
My story on this is here. I will post the agreement attached to the land sale later for my armchair experts to peruse. (IanS?) And maybe someone can actually figure out what the sale price is, because I sure can’t from looking at the complicated calculations in the agreement.
3 responses so far ↓
1 Norman12 // Oct 21, 2015 at 1:57 pm
That was certainly a fishy deal when the province agreed to clean the contaminated soil, which pretty well ate up the profits. If we can get some money from the city’s cosy deal with whatever developer they’really in bed with this week, so much the better.
2 Lance Berelowitz // Oct 23, 2015 at 5:21 pm
While I don’t want to rock the big feel-good boat that is floating on the plan to demolish the viaducts (I can see why this is a progressive thing to do as well as the next ‘green’ city planner), I do have an issue about how much the privately owned land will increase in value through removal of these structures, and how much of that land lift is paid back to us, the taxpayers, by the landowners to help offset the cost of this +$200 million project. The point is that Concord Pacific (and other affected landowners?) will reap a windfall gain if the viaducts are gone (much easier to sell the resulting development without them there, and for higher prices no doubt) so why doesn’t the City of Vancouver insist that they pay for most/all of the cost to demolish them and replace them with surface streets, etc.? This is over and above what Concord may have to pay the province for any increase in density above 12 million square feet. It is unclear from the staff report that went to Council recently what the proposed cost sharing deal actually is.
3 Ralph Segal // Nov 1, 2015 at 2:25 pm
Thought I would belatedly take a crack at this calculation. Based on the Staff Report’s build-out upper target of 2.5m sq.ft. for NEFC Area 6C (almost all Concord lands) with Viaducts removed (vs. 1.36m sq.ft. build-out with Viaduct retained) and using Frances’ earlier G & M article – sales agreement formula, this would work out to $23.25m payout to Province.
If Viaducts are retained, this figure falls to $9.6m (based on build-out of 1.36m sq.ft.), a reduction of $13.65m (lost revenue to Province). Please note these figures do NOT include any indexed increase of recovered profits to Province provided for in the agreement that would be tied to average increase in sales price of Vancouver condos and single family homes.
Just to speculate, if we assumed sale prices, say, doubled in the past 27 years since the agreement was written and the indexing likewise doubled??, the recovered profit to the Province would then be, with Viaducts removed, $46.5m and with Viaducts retained, $19.2m. In this instance, the lost revenue to Province between Viaducts removed vs. retained would be $27.3m. I’m sure some readers out there will be laughing at the assumption of sale prices merely doubling in the last 27 years, suggesting a trebling or quadrupling would be more like it. I’m simply throwing out a few scenarios here.