Speakers turn out to debate city role in megaproject: Vancouver intends to put

$50 million into False Creek development

Vancouver Sun
Wednesday, February 2, 2005
Page: B5
Section: Westcoast News
Byline: Frances Bula
Dateline: VANCOUVER
Source: Vancouver Sun

VANCOUVER - The biggest debate over Vancouver's signature megaproject of the 21st century has turned into one
over how much the city should invest in it.

With more than three dozen speakers lined up at Tuesday night's public hearing on the official plan for 32 hectares
(80 acres) of industrial land in southeast False Creek, the main point of contention has been the $50 million council
decided should go into this model "sustainable" community of 15,000.

City manager Judy Rogers has warned that the decision to put the assumed profits from the site's 20 hectares (50
acres) of city-owned land into the social-sustainability side -- low-cost housing subsidies, an enlarged community
centre, two extra child-care centres, and waterfront development -- will "impact on the city's ability to acquire
strategic sites and to meet other public objectives in the future."

Opposition councillors Peter Ladner and Sam Sullivan say the megaproject, which is expected to take 25 years to
build out, will suck up resources from all over the city, leaving other areas with less money for similar kinds of
neighbourhood enhancements.

On the other side, Coalition of Progressive Electors Coun. Raymond Louie says the $50-million investment will not
have a long-term effect and will give the city an opportunity to showcase a model community.

The city's real-estate services director, Bruce Maitland, agrees that "if this is a one-off, it doesn't impact too much --
this is not the sky falling at this point."

But, he warns, if council tries to extend this kind of investment to other neighbourhoods, it will affect the city.

At the heart of the issue is what the city's unique and much-envied "property endowment fund" should be used for
and how much of a hit it can take.

The fund was created in the late 1970s, when then mayor Art Phillips realized that Vancouver, unlike many other
cities around North America, had not sold off all the property it acquired during the Depression years when people
couldn't pay their taxes.

It owned huge swaths of real estate in False Creek and Champlain Heights, but it wasn't being managed in any
coherent way.

So Phillips, who made his fortune as an investment manager, said it should be developed as a unique reserve fund
for the city.
His idea was that this real-estate arm of the city would use its assets to provide a financial cushion, but also to help
the city shape and enhance development.

To that end, the fund managers have bought and sold property over the years throughout the city, to generate
investment income, to get land at good prices that the city might need later, and to provide community benefits.

About $500 million worth of land is committed to long-term leases for social-housing projects. Another $300
million-$400 million is also tied up in long-term leases to private property developments in False Creek, Champlain
Heights and the eastern end of the Fraser River shore. It also owns the 2400 Motel on Kingsway, recently bought as
an investment, industrial land on Broadway and apartment blocks near First and Clark.

The leases generate $15 million a year, half of which goes into the city's operating budget each year.

The cash reserves are used to finance other projects. The fund is financing construction of rental housing on top of
the new community centre at Kingsway and Main.

Maitland estimates that in the past five years, it has bought $30 to $40 million worth of land now used for social
housing.

Idnumber: 200502020083
Edition: Final
Story Type: Business
Length: 581 words
Keywords: INDUSTRIAL REAL ESTATE; WATERFRONT; LAND USE; ZONING