Giving away the Future
Ron Bolin — August 9, 2010
At its August 9, 2010 meeting, in a five to one vote (Councillors Holdom, Kipp and Sherry were absent), Council chose to give away future bargaining power over the development of our downtown waterfront area for no comprehensible reason other than that the developer asked to have his rights for a 26 storey high-rise condominium enshrined into the future. For this privilege no offsetting obligations concerning when this tower might be built were given.
At the public hearing, the developer held that 15 years in the future might be an appropriate time frame for construction. Awarding possibilities for the future like this provides security for the developer, but what does it do for the public interest? The future is hard to read even in the short term. In the long term it is impossible, yet Council is willing to give up our future maneuverability in this matter for … nothing. The developer is assured of his future rights without being required to take on any obligations.
Councillor Pattje, the lone dissenter in tonight’s vote, made a number of points which led him to vote against the rezoning, one of which noted this very point. The city is in the midst of developing a plan for the “new frontier” in our downtown area, including the Welcox Lands, the Assembly Wharf, etc. which are peripheral to this rezoning. Will these plans mesh with a high rise tower in the location which Council approved tonight? Perhaps. But it could offer an impediment. Who knows what the future will bring? And since we do not know, why should we mortgage our future in this or any other similar case before a developer is prepared to make the future into the present? What right do we have now to tie the hands of that future Council which will have to deal with the reality of the tower. To protect the rights of that future Council and our future citizens, our current Council should make all such applications dependent upon a relatively short and defined time frame and send the developer back to the drawing board if that time frame is not met.
Posts and Comments on Nanaimo Governance 
A good argument, Ron. Perhaps just a little too late.
Isn’t this the same company that bought all the retail space in the VICC for a few million dollars?
You might be forgiven if you thought this company has a few friends in high places!
What would have happened if this approval had not been given? Would this company have put their plans for the rest of Port Place on hold?
How quickly are they proceeding with Port Place now?
Just a few random comments.
Construction is underway and has been for a few weeks. So, they are moving and are doing so far what they said they would do. The construction of the new building at the corner behind Wendy’s restaurant has the excavation started plus continuing realignment inside the the old mall.
Did you actually look and see what is happening before you wrote or was it a just a morning guess?
The ‘progress’ at Port Place has been going on since January. How many months ago is that? If this were a priority it would have been down in a month.
The point I am making is I am wondering what kind of leverage the developer used to get the changes for the tower which is another 10 – 15 years down the road? That change by the city did nothing for the city or taxpayers all it did was increase the value of the land to the developer. Maybe down the road, the city could have tried to have a downtown hotel thrown in as part of the re-development bargain?
As for the retail space on Commercial, considering the whole project was nearly $100,000,000.00, getting ALL the retail space for $3-$4 Million seems like a VERY Good deal.
And YES I am very much aware of what is going on. The stores in Port Place closed after Christmas. Six months later, there is very little progress on the demolition. This is the same company that took all summer to put some paint on Terminal Park Plaza also.
Then they jacked the rents by 40% and at least three long time tenants had to close shop.
I would not want to be a business person trying to make a living renting their retail space.
And one more random thought. If a company controls enough retail real estate, how much true competition is there in the market place?
The mall is not coming down so it could / would not have been down in a month. Several busineess are being relocated. That must be complete BEFORE any demolition of those parts could be done. It was way beyond January i.e. only several weeks ago that the development permits were approved at Council. I have never reviewed how long it takes to actually issue the permits once approved. Maybe, theregfore the permits are not yet issued???
So you are suggesting they should have just proceeded and torn it down in Januaruy without approval and without permits as that is what your text reads. So, your view is the heck with the permits and approval??? Just do it??? That appears to be what you said.
Re: Terminal Mall. Be sure you are right….. there is actually two malls with two separate owners.
There must be a whole lot of the mall which is coming down, how else do those cars go through?
The interior has been drywalled up for months, not just weeks. Purdys, the laundromat etc. were closed at the end of Dec.
As to Terminal Park I am absolutely positive. They have their corporate logo on the building in several places.
I also know one of the owners who was displaced by the 40% rent hike. It used to be the post office, which very nicely served this area, when owned by Zorkin.
The new owners, are one large corporation whose only loyalty is to their own bottom line. Which of course is as it should be. One way to improve your bottom line is by controlling as much of the market as you can. They are positioning themselves well to do that. Good business move. Kudos to them and their shareholders.
As to why city hall approved the tower so well in advance, I remind myself this is the same bunch which oversaw the Conference Centre and cut the iron clad deal with Millennium.
I doubt if we have the talent to deal with the pros from back east, on this or any other deal.
That said, I am not opposed on any level to what they say they want to do with the old Harbour Park Mall. It has long since been outdated.
I don’t really care, if all the powers that be want to turn downtown Nanaimo into another downtown Vancouver or Hong Kong for that matter.
I am totally mobile and will move when it no longer suits me. I am not sure however, who is going to be attracted to all these downtown towers unless there is something for the occupants to do to earn a living. McDonalds and WalMart jobs just ain’t gonna do it. Neither is spin off from conferences or cruise ships.
I moved here in 1970 and can honestly say that for all of the growth I do NOT find Nanaimo any better place to live now than it was then.
So where did this $100,000,000 million come from? Is that a made up number that is your opinion or can it be supported? If not please provide the breakdown and source. If you are going to use data you need to support it or it is useless. SO, pleaser detail this so-called $100,000,000. I have never seen a number nearly this high except from you.
If ANYONE can provide an ACCURATE cost of the VICC, bring it on. You won’t get it from city hall.
The first time I heard that number it was attributed to a comment from no less than Jerry Berry.
The first conference centre on the site of the old Malaspina was for 12 million. The first guesstimate Millennium came up with was 52 million, which we all voted on. Then they said it would cost 72 million, but there has NEVER been an itemized accounting of the REAL cost of this project.
You might want to include the cost of tearing down the old arena, and all the underground servicing that went into Maffeo Sutton, which really was all done to facilitate the land for the condos, the city was giving to Millennium. Remember???
There are many costs which we would not have incurred if we were not trying to accommodate OUR side of the Millennium bargain.
But don’t expect anyone to give you any accurate numbers on that score.
Anymore than there were any estimates in the first place.
Ron,
I wasn’t there and can’t say for sure except that I think Councillor Pattje is somewhat out of line. We can simply not afford to continue to crystal ball these what if’s. The city needs to stop playing developer and leave this to the professionals. If they meet the requirements set out by zoning, OCP’s and other such things then let them go for it. 15 years or not.
In fact I suggest that 15 years is likely too far down the road even with the projections of the RGS that discuss 3% compounded growth in the region – I think it is more likely 7 to 10 myself as more people simply get squeezed from Victoria and Vancouver due to costs.
I’m not tied to any of this project but I have to ask what happens to Pattje’s comments if the natives settle a land claim and redevelop that entire chunk down there of Haliburton, the city can’t stop them and then we’ll wonder what happened because that will be real money, both federal and provincial and the City will sit back and scratch its head with a big deer in the headlights sort of look…
Just my opinion.
I disagree. The OCP is fundamentally flawed and in that flaw it does not allow planners to properly protect the interests of the city.
The Port Place Tower is a very good example to illustrate the weakness. We know, based on the study of similar towers in other centres that the retail at the base of that tower will perform extremely poor. The developer knows this as well. The retail is there, because they can’t develop the residential right to the ground and to build faux retail space is very cheap. The retail that pays the rent is already there, and the residential will pay for the rest of the building. Additional retail income would be a bonus, but its not likely, nor is it being counted. This is empty space that has no significance to the developer.
However, to the city, which is trying to promote tourism, trying to get more people to come downtown, trying to get more people to choose to live downtown, that empty retail space resents a very significant barrier to the success of our plans. The retail in that project means a lot more to us then it does to the developer. It works out like this; the city spends a certain amount of money to attract people to our city, with the addition of this building they will have to spend more to achieve the same result. The city spends a certain amount of money each year to promote economic development, with the addition of this building they will have to spend more.
However, if the city had a planner who had even a remote idea of what productive retail design looked like, then that planner would negotiate with the developer to get a building that is more conducive to successful retail. It wouldn’t cost us anything more, and it wouldn’t had a significant expense to the development, but over the long run everybody wins.
If the OCP made some association between any sort of productivity, like retail, and planning, then the association between development and sustainability might be better understood. In other words if the OCP had a section on the requirements for successful retail development the OCP might provide decision makers with some guidance that would allow them to make the occasional intelligent decision.
We, as a community, are losing out so much by leaving every issue related to productivity up to the developer. In fact we are at the point that every time we bend to the will of a developer we are almost always certain to lose. It is time, we as a community, start to recognize the huge benefits of marrying planning to productivity. In truth we can not make ourselves sustainable unless we do that.
And we cannot make any intelligent decisions regarding land use unless we understand the link between design and productivity. Most of us are far, very far from that understanding. Towards achieving that understanding, a usable OCP would have helped.
Dan,
I can’t disagree more. I’ve been involved with many OCP’s and you get out of it what you put into it.
Also, I’d love to see this “study” of how to densify without a tower? Never seen that done, anywhere in North America – remember we live on an island of finite space and we can’t keep going out, we’ve got to start going up…
see my august 3 essay.
I find the notion of planning looked at from the perspective of productivity that you suggest Dan, quite interesting. It occurs to me that retail economic activity is important for sure, but it’s the result of a fairly advanced economy that is creating the prosperity that leaves people with discretionary income to spend in stores and thereby circulating that money through the system.
I was interested it the editorial in today’s Daily News ( http://www2.canada.com/nanaimodailynews/opinion/story.html?id=50db9448-9c44-4b1d-9ac9-e49613b4e3ed ). In it, they recognize (at long last you might say) that low paying retail and real estate development don’t offer us the sustainable future we all want for Nanaimo. I don’t want to take your exploration of this off onto a tangent… because I do think you’re on to something here. And the gutting of Plan Nanaimo and its Urban Containment Boundary, replaced by superficial homilies is a problem that will hamper 21st century town planning here for years to come.
The unfortunate reality seems to be that critical planning and development decisions are being made for the most part in private by a single far too powerful GM, Development Services and shopping mall developers. Two stakeholders who should be at the table for sure but there’s several other interests not represented and we won’t get innovative, progressive ideas working for us until they are. Our Mayor and Council have failed us badly here.
Retail is a primary reason for cities. Its not advanced at all. It predates civilization.
On the other point – There is a good deal of negotiation that happens between a developer and the planning department before a project is made public. A planner can determine if the number of trees planted is sufficient. They can rule on the colour of brick used, and they can make any kind of off the cuff comment that must in some way be responded too. They could, if they had any sort of expertise, make determinations on the likely effectiveness of retail development, or on any other productive portion of a development. They could, if they felt they did not have sufficient expertise in a specific building type, call in advisors who did have the knowledge and experience to make these determinations. Such effort would very quickly pay for itself. It works by applying another set of eyes and another level of intelligence to a particular problem. Everybody, including the developer, benefits.
Its true Mayor and Council have failed us, but the problem is systemic with its roots in our own indifference and ignorance. Mayor and council are not giving the best direction to the city staff, and the city staff is not giving mayor and council their best advise. While we get shafted over and over again, then do nothing about it. I wonder if its because we really like to get shafted.
ooh! that’s argumentative and dismissive of a reasonable and appropriate point in this chat… Human trading is among the origins of human settlements. Retail is an advanced expression of that trading and it requires a sophisticated, complex economy to create the prosperity that enables it to happen at all. Not such a big point but it’s not to be dismissed out of hand.
Even the casual unsophisticated observer (that includes me) is aware of how the system works so there’s no need to lecture… the notion that some voices and interests aren’t represented at the table we should expand on though don’t you think?
I’m sorry I didn’t mean to sound dismissive. I wanted to reinforce the notion that we are talking about something that is fundamental to the performance of cities.
I can’t remember, but I’m not sure retail is mentioned at all in the OCP. If its not really dealt with in the OCP, then perhaps it dealt with somewhere else; perhaps our planning professionals are handling it on a case by case bases. I can’t say that I have run into that much concern or consideration for the subject at that level, at least with projects that I have been involved with. If the OCP isn’t directing certain design choices, and the planning department is directing certain design choices, then perhaps that happens at the elected official level. Again, my experience is limited, but I don’t see it happening at that level either.
Retail is a basic function of cities. The planning and design of retail space can influence the success or failure of enterprising citizens. I don’t think its been given the consideration it deserves.
With the port place tower project we are making the same mistakes we made with the conference centre. And the price for those mistakes is very high, increasing over time.
You may be right about some voices and interests are not represented at the table. But for certain the voices we are missing the most have some sort of professional expertise.
My chippy most recent comment didn’t deserve such a gracious response. Thanks Dan! I’m working on a post on the Port Place redevelopment, how it evolved and especially lessons learned that will help me better participate in these development issues in the future. Central concern to me at this point is how determinedly opposed to a collaborative process both Council and the Planning Department are. There are innovative approaches being undertaken elsewhere (Hamilton, ON, Surrey (!)) but we’re not learning from them here — and getting much better outcomes as a consequence.
Suggesting that an extended build out time of any type of project is common with every project I have seen in this city and elsewhere.
Woodgrove Mall (1981) originally was designed to be a two story mall with 3 five story buildings and two towers *about 14 stories*. The original build out time was 20 years. 29 years later and we have no high rises there. Can they still build them or has zoning changed?
Cable Bay and Sandstone have build out periods extending beyond the 10-15 year build out of Port Place, yet neither of them were critiqued because of their build out time.
Is build out time a new strategy of critiquing developments since other methods do not seem to be working.
Unless someone is willing to deal with the reality of out of control government spending, fussing about what the city is going to look like in 20 years is akin to being in a sinking boat and wondering what colour to repaint the walls.
Jim,
Well Said.
I don’t believe that anyone is suggesting that very large projects should not have extended build out periods. The problem comes when a project stagnates and nothing happens. The land is simply tied up and mothballed while the world around it changes. There are also implications for the relationship between the size of an approved project and how long the build out period should be. How long should an approved project be left vacant?
Jim: I believe the real problem is that the two conditions you mention are closely related. Government spending tends to expand in a planning vacuum. Every business needs a business plan, and grabbing at any possible immediate income source without a plan bankrupts businesses. The plan and the money have to work together for success.
Ron you stated ” I don’t believe that anyone is suggesting that very large projects should not have extended build out periods. The problem comes when a project stagnates and nothing happens.”
Are you stating also that this is going to happen without any proof on the Port Place project? How about the project across from Katerina’s that appears to be on hold? How about the proposed towers at Woodgrove which has not happened in 29 years?
The towers at woodgrove will never get built as there is no land left in the area. A shame really but big box has really messed that up.
As far as holding long build out periods is a planning mistake as the people developing this site should already know the major tenants, the residential market and that sort of things. To assume anything else would assume that the developer hasn’t done their homework or that the city is going to do the developing again.
George: What I am going on is the statement from the developer that he expected the development of the tower to lie some 15 years in the future. Why, in this, or in the other cases you mention, should we be approving infinite time for such developments? Obviously no promise of development was made to us. Why should we promise a limitless zoning upgrade. If development does not take place in a timely manner we should be free, without great difficulty, to withdraw spot rezonings just as we can with building permits.
Deane Finlayson who had a street dedicated to him this week also expected development of the towers at Woodgrove some 15 years in the future and there is still land there to build them, contrary to the statement above. Any land currently used for parking can be expanded to include new projects such as was done with Chapters and the White Spot a few short years ago.
George,
The original plan, which I had drawings for some time ago showed the towers on the proprty of where Chapters, Michael’s and Home Depot all now sit. Most of this is owned and was built by Windley so unless you are suggesting that the towers go in the parking lot of WGM, which is very possible, this is the basis of my comment of no land remaining.
George: The city’s online NanaimoMap shows the zoning of Woodgrove as A2, ie agricultural land. This must be incorrect and I have a question in to them about whether the right to build those towers still exist there. In fact, given all the jobs in that area, the fact that the mall is a major node and on our corridor,I would think this should be a good place for low to mid range condo/apt towers.
A2 zoning seems to be the catch-all for ‘we are not sure yet’.
You may be right, but such slap dash is simply not acceptable in modern information systems. We have to have confidence in what we find and if we can’t then nothing can be trusted.
If I remember correctly the new zoning for Woodgrove will be community core. This allows for towers, high density residential and multi-use. What ever the old zoning is doesn’t much matter. Nobody is going to be building anything there under the old zoning.
There is a completely valid reason why the mall deconstruction has not started yet. Three of the main tenants have to have thier new locations ready for use before the existing ones can be torn down. These include CIBC, Government LCB and the Medical Arts Clinic. The LCB and Medical Arts are going in across from London Drugs and Thrifty’s and the CIBC will be going into the new building they are currently working on at the corner of Esplanade and Terminal/Nicol across from the Co-op Gas bar and Salivation Army. The CIBC’s new location MUST be completed before they will be allowed to demolish the existing bank.
These developments take time and need approval at certain stages.
It ain’t tear it down and build it, it is step by step process that must be followed.
Well said, George. It seems some people think the project should just ignore approvals, permits and leases and just tear things down in a month just because it was announced. Excavation started about a week ago for the new building behind Wendy’s restaurant. There is work going on inside causing partial sidewalk closure. The comments about delay are just wrong.
The comments I made about possible delay, was looking for a reason why city staff are so gung ho to approve a 15 year out project.
The short, and possible right answer may very well be that the developer could not, or would not commit to the whole project IF the tower component were not carved in stone.
This developer is not some rinky dink, two bit developer, they have very deep pockets and can well afford to put things on hold if their return is uncertain.
Note to Jim Taylor : If you use the box at the bottom of the last comment to SUBMIT your response rather than clicking on ‘reply’ within the post you wish to answer, your post will end up at the bottom instead of in the middle where most will not find it. :)
George, I know how it works. I don’t really care who else reads it. I was trying for some continuity in the conversation. :^)
You are most welcome, Jim.
George, I hope I did not offend you. What I said was meant lighthearted, but one problem with forums, is misunderstandings are easy to come by.
Again, I did not mean to offend you. I felt if my replies were in order the ‘conversation’ might be easier to follow rather than what might seem like a disjointed response at the end of this thread.
Thanks for your suggestion. Again, no offense meant.
Reading through some of these threads reminds me of an old expression:
“if you placed all the accountants end to end around the world, you still would not reach a conclusion”. :^)
It might be possible to consider a new name for the blog:
“The Grumpy Old Guys Blog”, we sure can tell you what is wrong, but gall darned if we can tell ya how to fix it!
No problem Jim, now we can work on solutions. Everyone get one more person interested in local politics. Enough that they will vote in 2011.
With a strong science background I do not loosely throw around numbers for my own convenience without supporting them. It appears the $100,000,000 is an invention of the writer and is meaningless. To put the cost of tearing down the arena in that amnount when the decision was yto build a new arena which we have is absurb. That is a completly separate project. So again, data is getting quoted with no source and numbers being made to say what the writer wants us to hear which makes the numbers near worthless.
Wally, what is the SOLID number you would say the VICC cost? Please provide sources for your numbers.
Are you by any chance a ‘spin’ doctor for the city? Just kidding!!
The $100,000,000 figure has been quoted in the press as being attributed to Mr. Berry.
Before the election which resulted in Mr. Korpan being re-elected, the city was saying the project was going to cost AT LEAST $72,000,000.00 to complete, up from the $52,000,000.00 we all voted on.
There NEVER has been an audited statement which says what this project actually came in at. It could in fact actually cost more than $100,000,000.00 for all we know. I would love to see someone fund a forensic audit of that whole project, but would suspect all sorts of resistance from staff and at least the four on council which supported it.
How many contractors bid on that project anyway? What was the high/low bids??
Got an answer??/ Didn’t think so.
The removal of the old arena and the foundry was tied to the Millennium deal, don’t kid yourself.
Sounds like you thought the whole VICC deal was well handled and the taxpayer got a great deal???
I didn’t quote any numbers. Therefore I asked for your source and justification. I made no comments on whether the deal, was well handled or not. I am looking for hard data not an invented number.
It appears you took one City number of $72 million and added 25%. There is not justification for this.
Wally, I do this sort of thing for a living and there is no way that this Mall project would tip the scales at $100M! Perhaps the entire buildout of the property with a large scale arena might send it over the to a ball park of $140M but this mall re/re with the tower, the retail and such should come in around $75M or so using todays numbers.
Wyatt, the $100,000,000.00 has nothing to do with the Mall project. If you think the Port Place Mall with tower and retail should come in at $75 Million or so, would you say the VICC should have come in at $72 M.?
Thanks Wyatt. I absolutely agree. It appears we have been given the entire basket of fruit for comparison. The numbers quoted are a pipe dream. I believe the refence to to $100 million has something to do with the convention centre. That was my questions, but no data forecoming. It appears there is no information on what this hypothetical $100 million includes. I do not deal in made up numbers.
Depending on methods and materials used $75M is about right for the entire Mall (including civil works and tower). The VICC could have a bit lower, I’m going to guess $65 to $68M but $72M isn’t out of the question – esp. when there were so many changes…
How many square feet is the entire Mall including civil works and tower?
How many square feet is the VICC? How many square feet of retail space was sold to Capital First Realty?
Jim, what do you hope to achieve re-fighting the conference centre battle? There’s not just the Okanagan fires in the air today — I’m starting to smell burning rubber as we spin our tires here. How ’bout we all take a deep breathe and re-read Ron’s original post.
Mr. Berry did indeed admit that the all-in capital cost of the PONC/VICC was over $100,000,000 when off site costs are taken into account which any honest project must do. The $72.5 figure which is touted reflects only the costs of the conference centre building itself. No business I know can afford to overlook these extreneous but necessary expenses which often run to 25-30% of project cost. Of course we can overlook them here as there is no business plan and there is an endless source of tax money to make up any deficiencies. I believe that Mr. Berry’s statement is on tape at the archives, the tape being the only unexpurgated version of Council meetings: which by the way were kept by neither Shaw nor the City in those days. Kudos to the City for their current practice in this regard. I just wish they did FPCOW meetings as well.
The arena deal (city records show that the old one could have been completely renovated for $2-3 million) was part of the original deal with Triarc, subsequently SURO, subsequently Millennium and is clearly designated to be so in pre-referendum ads from the City.
Can anyone tell us the amount by which our tax rate could be reduced if we: a)still had the $30+ million in reserve funds which were used for this project invested; b) were not paying interest on a huge load for the project; and c) were not spending nearly $1 million per year in operating costs on it?
Frank, I have no intention of re-fighting the conference centre.
This thread is similar to most on the blog. Differences of opinion are expressed by more or less the same handful of folks who never come to a conclusion.
I repeat unless the issue of out of control government spending is dealt with, all else is distraction.
As my comments relate to Ron’s original post:
it is the same bunch who ran the conference centre deal, including 50% of the current council, so why would you expect anything much to change in the handling of plans for downtown??
“Build it and they will come”. Worked for the Field of Dreams, so why not here? Conference centre, cruise ship terminal, towers along the waterfront. A solid forward looking business plan and if anything goes sideways, the bank of the taxpayer has very deep pockets, so damn the torpedoes, full steam ahead!!
Now, since indeed this is an exercise in wheel spinning, and since this is the most enjoyable time of the year, I do believe I shall take the rest of the summer and go play, and turn this computer off.
Enjoy the rest of the summer.