Downtown New West Market Study - 09

APRIL 2009
Urbanics Consultants Ltd.
DOWNTOWN COMMERCIAL LAND USE MARKETABILITY STUDY

City of New Westminster, British Columbia
DOWNTOWN COMMERCIAL LAND USE MARKETABILITY STUDY

City of New Westminster, B.C.
Prepared for:
The City of New Westminster
April, 2009
Prepared by: Urbanics Consultants Ltd.

Suite 2000 - 355 Burrard Street, Vancouver, B.C., V6C 2G8
TABLE OF CONTENTS
1.0 2.0 INTRODUCTION............................................................................................... 1 STUDY AREA ASSESSMENT ......................................................................... 4 2.1 HISTORICAL/CONTEXTUAL FACTORS............................................. 4 2.2 TRANSPORTATION CONTEXT ............................................................. 5 2.3 FRONT STREET / NORTH FRASER PERIMETER ROAD................... 7 2.4 LAND USE CONTEXT............................................................................... 7 2.5 OTHER GEOGRAPHICAL / CONTEXTUAL FACTORS .................... 8 2.6 STUDY AREA DELINEATION .............................................................. 10 DEMOGRAPHIC & ECONOMIC OVERVIEW......................................... 11 3.1 POPULATION GROWTH....................................................................... 11 3.2 DOWNTOWN POPULATION DEMOGRAPHICS ............................. 11 3.3 GENERAL STATISTICS........................................................................... 15 3.4 HOUSEHOLD STATISTICS .................................................................... 15 3.5 INDUSTRY STATISTICS ......................................................................... 17 3.6 ECONOMIC CONTEXT .......................................................................... 19 RETAIL MARKET ANALYSIS ...................................................................... 20 4.1 RETAIL TRADE AREA DELINEATION:.............................................. 20 4.2 RETAIL SUPPLY....................................................................................... 21 4.3 RETAIL DEMAND ANAYSIS................................................................. 25 4.4 TRADE AREA PER CAPITA EXPENDITURES.................................... 25 4.5 RETAIL MARKET SUMMARY............................................................... 38 OFFICE MARKET ANALYSIS....................................................................... 41 5.1 OFFICE SUPPLY ....................................................................................... 41 5.2 OFFICE DEMAND ................................................................................... 43 5.3 OFFICE INVENTORY PROJECTION METHOD ................................. 45 5.4 OFFICE SPACE PER CAPITA PROJECTION METHOD .................... 47 5.5 WARRANTED OFFICE SPACE.............................................................. 49 HOTEL MARKET ANALYSIS ....................................................................... 51 6.1 STUDY AREA DELINEATION .............................................................. 51 6.2 HOTEL SUPPLY ANALYSIS................................................................... 53 6.3 HOTEL DEMAND ANALYSIS............................................................... 57 6.4 EXTERNAL INFLUENCES OF FUTURE DEMAND........................... 64 6.5 INTERNAL INFLUENCES OF FUTURE DEMAND ........................... 65 6.6 HOTEL CONCLUSION ........................................................................... 66
3.0
4.0
5.0
6.0
7.0
CONFERENCE FACILITY ANALYSIS ........................................................ 67 7.1 CONVENTION AND MEETING SPACE SUPPLY ............................. 67 7.2 FACTORS IN CHOOSING A LOCATION & VENUE......................... 70 7.3 CONCLUSION.......................................................................................... 73 STRATEGY RECOMMENDATIONS .......................................................... 74 8.1 BOOK-END CONCEPT ........................................................................... 74 8.2 DEMAND SIDE RECOMMENDATIONS............................................. 75 8.3 SUPPLY SIDE RECOMMENDATIONS:................................................ 77 8.4 PLANNING RECOMMENDATIONS ................................................... 79 8.5 DOWNTOWN DEVELOPMENT CORPORATION ............................ 81 8.6 OTHER ....................................................................................................... 82 LOCATIONAL CONSIDERATIONS........................................................... 83 9.1 LOCATIONAL CONSIDERATIONS BY LAND USE TYPE............... 83 DOWNTOWN DEVELOPMENT CORP...................................................... 85 10.1 PUBLIC SECTOR ENTITLEMENTS ...................................................... 85 10.2 IMPLEMENTATION STRATEGY OPTIONS ....................................... 88 10.3 DISPOSITION OPTIONS......................................................................... 91 10.4 IMPEDIMENTS......................................................................................... 92 10.5 RECOMMENDATION ............................................................................ 94
8.0
9.0
10.0
LIST OF TABLES AND FIGURES

Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Population Projections Base Case, Low Case, and High Case General Statistics (Population, Age, Income, etc.) Household Statistics Industry and Employment Statistics B.C. Per Capita Retail Expenditures New Westminster Per Capita Retail Expenditures
Table 7 Table 8 Table 9 Table 10 Table 11 Table 12 Table 13 Table 14 Table 15 Table 16 Table 17 Table 18 Table 19 Table 20 Table 21
Convenience Shopping Market Demand Comparison Shopping Market Demand Eating and Drinking Market Demand Service-Commercial Market Demand Retail Demand - Summary Greater Vancouver Office Market Statistics Downtown New Westminster Office Market Demand Forecasts Method 1 Downtown New Westminster Office Market Demand Forecasts Method 2 Downtown New Westminster Office Market Demand Forecasts Summary Hotel Supply Inventory Downtown New Westminster Hotel Demand Forecast Study Area Business Incorporations Metro Vancouver Tourism Indicators Top Factors in Choosing a Meeting Location Top Factors in Choosing a Hotel Facility Within a Specific Location
Figure 1 Figure 2
Hotel and Office Study Area Delineation Hotel Supply Map
1.0 INTRODUCTION
The City of New Westminster has retained Urbanics Consultants Ltd. to undertake a study of the commercial land use marketability for its Downtown area, with residential land uses to be excluded from this study. This is within the context of the New Westminster Downtown having been identified as one of the eight Regional Town Centres in the Metro Vancouver areas Livable Region Strategic Plan. The key objectives of this study are to determine the commercial market potential of a study area defined as Waterfront to Royal Avenue and Highway 99 to Columbia Street at Royal Avenue, and to provide an indication of the amount of gross building area which is warranted for each category of land use during increments of 5-year phases over the course of the study period, together with preferred locations for each category of use under various scenarios of market strength. Furthermore, the consultant has provided a substantial list of policy recommendations and implementation considerations to support the land use marketability of Downtown New Westminster. It is the consultants considered opinion that, in the absence of the full implementation of many of these recommendations, the forecasted analyses contained in this report will likely not be achieved, and even the low scenario may in fact over-state the actual performance of the study areas commercial land uses. The report is organized as follows:
1. INTRODUCTION 2. CONTEXTUAL OVERVIEW: Evaluates the key physical and locational
characteristics of the area, particularly with respect to the office, retail, hotel, and other non-residential land uses under consideration.
3. DEMOGRAPHIC & ECONOMIC OVERVIEW: Provides an assessment
of population projections and demographic trends are examined for the study area.
4. RETAIL MARKET ANALYSIS: Based on population growth and per
capita expenditures in the study area, a forecast of total retail expenditure potential can be made. Weighing demand against the competitive influences inside and outside the study area, the amount of warranted retail space, on a category by category basis, is projected for the study area.
5. OFFICE MARKET ANALYSIS: A projection of warranted office space
demand for the study area is made for the next three 5-year increments of the study period, using two methods: examining the historical growth in office space within the surrounding suburban markets, and employing a per capita figure suitable for New Westminsters office market circumstances.
6. HOTEL MARKET ANALYSIS: A comprehensive review of the hotel
supply in the study area, as well as a review of tourism and business indicators in the hospitality market is also undertaken, coupled with forecasts for hotel demand in order to rationalize the acceptable number of on-site hotel rooms that could be supported by the market.
7. CONFERENCE FACILITY ANALYSIS: A comprehensive review of the
conference space supply throughout the region and province, coupled with a recommendation as to the perceived supported amount of new conference facility space in the study area.
8. STRATEGY RECOMMENDATIONS:
Outlines the consultants list of development and planning/land use recommendations to enable and catalyze the successful expansion of non-residential land uses in Downtown New Westminster.
9. LOCATIONAL CONSIDERATIONS: Outlines the consultants primary
findings of the above land use marketability analyses and provides a preliminary list of development and planning/land use recommendations, including timing/phasing, warranted amount of commercial space, and consideration of other potentially complementary land uses in the area.
10. DOWNTOWN DEVELOPMENT CORPORATION: One of the key
recommendations of this report revolves around the creation of a specially-mandated development corporation to act on behalf of the City as a means of creating the strategic developments necessary to catalyze growth and activity in the Downtown study area and by extension, for New Westminster as a whole. Information from a variety of sources, both public (e.g. Statistics Canada, BC Statistics, the Government of B.C., Metro Vancouver, the City of New Westminster, etc.) and private were used in the preparation of this report, including the following:
First-hand area assessment and evaluation of subject land use inventory in a range of office, hotel, and retail-commercial related categories.
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Sourcing of trade area demographics and retail trade data for use in demand analyses from Statistics Canada. Population growth projections based on provincial data and the consultants forecasts.
Additionally, as with all market studies, a number of forecasts and assumptions regarding future economic and population growth are required. This is especially true in light of the current economic uncertainty. These assumptions are made with great care and are based on the most recent and reliable information available. In addition to the specific assumptions identified throughout the report, this study is based on the following general assumptions:
Real per capita expenditure growth for all trade area residents will not grow less than an average of 1% per annum over the course of the study period. Actual population growth rates both in and around the study area will occur consistent with those employed in this study. No unforeseen events will occur within the study period on a global, national, provincial, or local level (for example, terrorist activity, major changes in government policy, natural disaster, etc.) which would seriously alter the fundamental assumptions of the studys analyses.
If any of these assumptions should prove to be incorrect during any part of the developments pre-planning phase, a report update would be strongly recommended. Research for this study was undertaken by the consultant during the months of December 2008 to March 2009. An additional matter that requires some clarification is the use of the word Downtown. In all instances, unless specifically indicated otherwise, Downtown shall refer to Downtown New Westminster, as defined in the study area delineation section below. Wherever possible, the consultant has specifically identified other downtown areas (e.g. Downtown Vancouver) so as to avoid confusion. It should also be noted that, where appropriate, sensitivity analysis has been built into many aspects of the study, to deal with uncertainties about the future (including population and income growth) and to allow for a base case as well as a high-attraction and low-attraction scenario to further qualify these findings.
2.0 STUDY AREA ASSESSMENT

This study area assessment offers analysis of the subject area from the standpoint of regional and local access provisions, public transportation connectivity, surrounding land uses, and other contextual factors and their possible positive and negative impact on the Downtown.
2.1
HISTORICAL/CONTEXTUAL FACTORS
1. The inability for Downtown New Westminster to undergo considerable new office and, to a somewhat lesser extent, retail development has been a problem for a long time now, and is not a recent development. 2. Whether intentional or not, there has been an enormous surge of Downtownism uptown (that is to say, there has been a sustained growth in mid- to high-density residential, retail, and to a lesser degree, office space in the Uptown area around Royal City shopping center. Resident demographics are also a bit stronger uptown as opposed to downtown (for instance, from a population, age, and income perspective). While this area is perhaps not performing to its full potential in comparison to other retail clusters in the region, Uptown is not suffering as much as Columbia Street and the remainder of the Downtown. Furthermore, Uptown has stronger retail covenants, lots of parking, and considerable new development nearby, and so is able to attract better quality retailers than is Downtown, which hurts Columbia Street. 3. Downtown New Westminster has inadvertently divorced itself over several decades from its riverfront, both with the train tracks and the truck route, and then with the parkade and certain street closures. This has both blocked views and rendered the waterfront not easily accessible. This broken linkage results in losing the positive feedback had the relationship between the downtown and waterfront been maintained (Accordingly, one of the primary objectives for the Downtown should be to address this serious, harmful dynamic). 4. Less than 15% of the residents of Downtown New Westminster work in New Westminster itself, and the proportion of people who both live and work in Downtown is considerably smaller. This means that these people are not present in the Downtown during the day, and will likely do their shopping and business near their place of work or along the way to/from work (especially if it is easily accessed from major arterials or SkyTrain from New Westminster, such as Big Bend or Metrotown).
5. The vast majority of new housing on the waterfront just west of the Downtown has not been leveraged in terms of bringing more of the residents to Columbia Street to shop and do business. This is because: a. The physical disconnect and awkward connections to the downtown from the riverfront residential area. b. The demographic profile of the residents in that area is much younger than the metropolitan average and accordingly their behavioural/purchasing characteristics and commercial needs are disconnected / unrelated to what is available on Columbia Street and other downtown commercial precincts. c. Because of their physical disconnect from downtown, most residents do their shopping near where they work, or are otherwise able to easily access other nearby retail (e.g. Big Bend) or because of the accessibility created by SkyTrain go to other SkyTrain-serviced areas (e.g. Metrotown or Downtown Vancouver) 6. Metrotown, Guildford, Coquitlam Centre, Big Bend, Downtown Vancouver, and increasingly Surrey City Centre, are all sources of very strong competition for comparison retail shopping, as well as office space. 7. Virtually every town centre and regional centre in Metro Vancouver is competing for office, institutional, and other employment-based land uses, and so attracting these uses to Downtown New Westminster will require differentiation and a degree of innovation in order to compete with these other areas. 8. The Front Street Parkade does not create a great deal of benefit for Columbia Street retail. 9. There is a total lack of a proper tenant mix, which prevents new retail from entering the area, which further compounds the tenant mix problem (this is a classic chicken and the egg problem, which is why the recommendations contained herein will have to be enacted in their entirety to overcome this obstacle.)
2.2
TRANSPORTATION CONTEXT
As the geographic centre of the Metro Vancouver region, Downtown New Westminster benefits from the confluence of several major regional transportation networks, both public (e.g. SkyTrain) and private (e.g. NFPR, Highway 99A). However, this also carries certain disadvantages: The proximity of the Pattullo Bridge and east-west movements between Brunette Avenue and the Queensborough Bridge create a disruptive influence on the Downtown. Also,
the presence of an active railway line along the waterfront compounds these challenges by severing direct linkages between the waterfront and Columbia Street. East-west traffic on Front Street is further hindered by interactions with the rail corridor. Furthermore, the crossing near 4th Street causes considerable delay on a major truck route, with adverse implications for adjacent activities. Given Downtown New Westminsters excellent transit accessibility - two SkyTrain stations and relatively high frequency bus service - a significant and growing proportion of trips into and out of Downtown are made with public transit, although the steep grade between Columbia Street and Royal Avenue inhibits other non-auto modes of accessing the Downtown. Front Street requires specific attention due to its role as a major truck route, and the severe delays caused by the at-grade rail crossing downtown, as well as its merging points with Columbia Street. Regional truck movements and severance caused by the rail corridor are key issues in this area. In the east, Pattullo Bridge connections to and from Columbia Street and Royal Avenue are a major issue. The City has put in place a complex system of turning restrictions, one-way designations, and access restrictions to circumvent shortcutting through Downtown en route to/from the Pattullo Bridge. Through traffic, especially regional goods movement, is a huge challenge for Downtown New Westminster. Addressing the high volume of heavy commercial traffic on Front Street and its poor interface with the adjacent railway line will be crucial to enhancing the Downtown environment and providing a meaningful connection with the waterfront. The proximity of the Pattullo Bridge and its connection with Columbia Street must also be considered. Public Transit The two Downtown SkyTrain stations, New Westminster and Columbia, are very different from each other. Columbia is a major transfer point between the Expo and Millennium lines, while New Westminster is the focal point for buses and the high density residential areas at Plaza 88, Quayside, and the west end of Downtown. With combined Expo and Millennium Line services from Columbia to Downtown Vancouver, service levels are close to 90 seconds apart during peak periods. Bus connections are possible throughout the area, as a result of Columbia Stations interchange role. This transit connectivity is a beneficial asset, but has not yet been fully exploited.
Parking and the Waterfront Parkade The Waterfront Parkade plays a role in providing parking for Downtown businesses and residents, but is at the end of its useful life. The parking lot appears to be largely underutilized, and it is increasingly recognized that the parkade exacerbates the divorce between Columbia Street and the riverfront, as well as generates pollution and deters shoppers from Front Street shops. Accordingly, it is anticipated that potentially a portion of the parkade might eventually be removed, although the consultant is not aware of any specific timeline. Connections to the Waterfront New Westminster has one of the regions few urban waterfronts, a setting that combines historic architecture, a true high street, and the potential for access to a broad swath of the Fraser River. The barriers to its redevelopment are many through traffic and the presence of the Waterfront Parkade among them - but significant thought must be given to the relationship between Columbia Street and the waterfront, and ensuring pleasant, direct, and safe connections between the two, for all modes of transport.
2.3
FRONT STREET / NORTH FRASER PERIMETER ROAD
The consultant understands that the options for the NFPR dont favour the use of Front Street for the new road, because it is not practical to widen it. Furthermore, it may be years before the road is built. Unlike the other portions of the NFPR, the New Westminster sectionfrom the Braid industrial area to Stewardson Wayis the responsibility of TransLink. The other sections are being built by the provincial government. So far the consultant understands that TransLink has no official position on the New Westminster alignment but is anticipated to be studying it soon. The regional transportation authority is also not in a financial position to pay for any alignment which would satisfy the city with proper mitigation measures.
2.4
LAND USE CONTEXT
Downtown is growing, not just in terms of buildings, but in its place within New Westminster as a neighbourhood where an increasing share of the Citys residents live. Currently, about 15% of the Citys population lives in the Downtown. Although development is taking place in other parts of the city, the rate of growth has been much more dramatic Downtown - its growth has been at two and a half times the pace of the rest of the City.
Downtown has been experiencing many physical changes, involving different locations, sites and land uses. These changes have taken place in the context of a regional surge in new residential development, but there have also been other changes in the physical makeup of the Downtown involving the closure of facilities. The greatest change in the Downtown has been the almost tripling of the total amount of housing floor space. The fastest period of growth was in the late 1980s and early 1990s, with the development of former industrial land along the riverfront on Quayside Drive. The most recent increase in activity is related to strong demand for residential units occurring throughout the region. In the past 20 or 25 years, the overall amount of built floor space has almost doubled. However, almost all of the net growth in floor space has been residential. Although a good deal of new commercial space has been built over the same time period, many commercial buildings sites have been demolished as well, so that the total amount of commercial floor space is virtually unchanged from twenty-five years ago.
2.5
OTHER GEOGRAPHICAL / CONTEXTUAL FACTORS

Columbia Streets historic/heritage area represents a considerable competitive advantage over other pedestrian-oriented retail precincts, in that such a concentration of heritage commercial buildings cannot readily be found elsewhere in the Lower Mainland, with the exception of Downtown Vancouver. Front Street poses a serious problem to retailers there because the truck traffic, pollution, and shadow from the parkade makes it less pleasant for patrons. Furthermore, the shops are not readily visible from Columbia, so the shopper must actively seek out the shops on Front Street, which severely inhibits walk-in custom. It is anticipated that a portion of the Front Street Parkade might be removed in the foreseeable future, although the consultant is not aware of any specific plans or timelines. Not only is the parkade severely underutilized (some estimates put usage at around 30% of capacity), but it acts as a considerable deterrent to Front Street patronage by trapping considerable amounts of air pollution, as well as amplifying the noise of the passing truck traffic and funnelling that sound up the street. Larcos planned five-tower, 900-unit project on the riverfront will probably not begin development for another ten years in light of market conditions and the high costs involved in building next to the river, and
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will in all likelihood be built on a tower-by-tower phased basis. Ideally, the City should be able to extract assistance from the developer in order to not only create a lengthy riverside seawall, but also a means of linking the riverfront with Columbia Street to the substantial benefit of both parties.
A study examining the potential program for a new multi-use civic facility is underway. The consultant understands that the facility is expected to have meeting/event space for arts, non-profit, and corporate users that can hold up to 350 persons (event style). It is anticipated to also include a community centre and possibly museum. The location has not yet been determined, but it is hoped that the ultimate location will be decided in such a way as to not only create the best facility possible, but also in such a way as to be of greatest benefit to the Downtown as a whole if the location should ultimately be decided to be Downtown. It is the consultants understanding that this facility is fully-funded, but because of the funding stipulations must be built quite quickly. In the medium or longer term, there may be considerable reason to examine the potential of relocating City Hall to a new building downtown. At present, City Hall uses between 40,000 and 50,000 square feet, and maybe another 5,000 for the Parks department which is currently housed in a different building an amount of space which could certainly be readily accommodated in an alternate location Downtown.
2.6
STUDY AREA DELINEATION
Different land uses have different study areas. For instance, office and hotel/conference uses will compete on a more regional level than would, for instance, commercial service or certain retail uses. Although the latter certainly possess some regional characteristics (for instance, some specialized comparison retail stores may attract shoppers from throughout the metro area), a retail trading area can be relatively more tightly delineated. For that reason, the office and hotel study areas should be understood to include New Westminster, Burnaby, North Surrey (generally comprised of Whalley and Guildford), and a portion of southern Coquitlam. A map showing the boundaries of this study area can be found on Figure 1 later in the report when hotel and office uses are examined, along with a more in-depth description of the area delineation. In terms of commercial-retail land use, a trade area can be defined as the region from which 85% to 95% of site sales will be generated. In this case, the retail trading area should be understood to comprise the City of New Westminster, with two approximate trading zones within the study area. Although it is not possible to state definitively that this proportion of sales will be generated from people who reside strictly within the limits of the City, it is the consultants belief that the use of inflow sales is adequate to capture whatever retail trade does not originate from with the boundaries of the City of New Westminster itself. Inflow sales are discussed in greater depth further below. (The inverse phenomenon, outflow sales, occurs when trading area residents expenditures leave the trading area, resulting in study area market shares below 100%. Such a circumstance is very common in suburban locations, although Downtown New Westminster can be characterized by an untowardly high level of outflow sales, as a large portion of Downtown residents shopping is done outside of the Downtown.) For the purposes of this report, the primary trading zone is made up of the Downtown, and the secondary trading area is comprised of the remainder of New Westminster. Although the areas outside of the City are not included in the study area, it should be understood that the substantial competitive influence from outside of the study area is well-reflected in all analyses of land use marketability for retail and retail-like uses.
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3.0 DEMOGRAPHIC & ECONOMIC OVERVIEW

This section includes forecasts of population growth, as well as various demographic analyses such as incomes, household structure, age structure, and employment, particularly in the study area, but also outside of the study area where other considerations warrant expanding the geographic scope of this analysis.
3.1
POPULATION GROWTH
One of the key determinants of the strength of the downtown market is the actual downtown population, and accordingly the forecasted population levels for the Downtown and remainder of New Westminster factor heavily into all projections of demand for retail and other commercial space. The population forecasts used in this study are provided according to three different scenarios of growth (low, base case, and high) in order to take into account potential deviation of future population growth rates from the current trend. The projections are based on other studies not performed by the consultant, namely the New Westminster Urban Development Forecast 2008 to 2041 prepared for the City in November 2008. The projections for all three scenarios can be found on Table 1.
3.2
DOWNTOWN POPULATION DEMOGRAPHICS
In order to gain more particular insight into the demographic makeup of the Downtown, three census tracts (see diagram on the following page) have been isolated from the broader New Westminster statistical makeup, and compared to the Metro Vancouver average. This provides insight into the three following areas:

General Statistics (population, age, dwelling and household characteristics, income) Household Statistics (mother tongue, immigration, mobility, and education) Industry Statistics (labour force, industry, occupation, place of work, and mode of transportation)
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TABLE 1 NEW WESTMINSTER

POPULATION PROJECTIONS - BASE CASE, LOW AND HIGH SCENARIOS
POPULATION - LOW SCENARIO Downtown New West Total Downtown as % of Total
2006 8,900 61,600 14%
2011 10,600 67,000 16%
2016 12,700 71,900 17%
2021 15,200 79,300 19%
2026 18,200 85,800 21%
Note: All figures rounded to nearest 100. Note: These projections assume that the downtown's proportion of the total population is consistent with the base case.
POPULATION - BASE CASE Downtown New West Total Downtown as % of Total Note: All figures rounded to nearest 100.
2006 8,900 61,600 14%
2011 10,600 66,900 16%
2016 12,600 72,500 17%
2021 15,400 80,300 19%
2026 18,400 87,000 21%
POPULATION - HIGH SCENARIO Downtown New West Total Downtown as % of Total
2006 8,900 61,600 14%
2011 10,600 67,100 16%
2016 12,700 73,100 17%
2021 15,800 82,600 19%
2026 19,300 91,200 21%
Note: All figures rounded to nearest 100. Note: These projections assume that the downtown's proportion of the total population is consistent with the base case.
Source: City of New Wesminster; Urbanics Consultants, Ltd.
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Note that the boundaries of these three census tracts do not exactly coincide with the study area (that is to say, Tracts No.207 and No.206 fall exactly within the boundaries of the study area, but Tract No.202 encompasses some of the area farther west of the Downtown and along the riverfront), as follows:
DOWNTOWN
(Source: Statistics Canada)
However, although the use of these statistics distorts the findings somewhat by including some residents outside of the Downtown area, it would be inaccurate to exclude this tract altogether on account of the substantial concentration of residents along the riverfront. Furthermore, a very substantial portion of the census tracts residents live within the study area, and accordingly these three census tracts combined should be considered to offer the best approximation of the Downtowns demographic makeup. The three broad statistical categories for the Downtown are discussed in turn:
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TABLE 2
DEMOGRAPHICS - CENSUS TRACTS 202, 206, 207, METRO VANCOUVER GENERAL STATISTICS (POPULATION, AGE, INCOME, ETC.)
Characteristics Census Tract 202 Census Tract 206 Census Tract 207
Three Census Metro Vancouver Tract Total
Population and dwelling counts Population in 2006 Population in 2001 2001 to 2006 population change (%) Total private dwellings Private dwellings occupied by usual residents Population density per square kilometre Land area (square km) Age characteristics Total population 0 to 4 years 5 to 9 years 10 to 14 years 15 to 19 years 20 to 24 years 25 to 29 years 30 to 34 years 35 to 39 years 40 to 44 years 45 to 49 years 50 to 54 years 55 to 59 years 60 to 64 years 65 to 69 years 70 to 74 years 75 to 79 years 80 to 84 years 85 years and over Median age of the population % of the population aged 19 and under % of the population aged 20-64 % of the population aged 65 and over 6,830 260 230 200 235 445 540 585 580 600 645 570 560 400 290 240 230 135 95 43 14% 72% 14% 1,890 75 30 30 40 175 230 210 210 185 180 170 135 95 55 30 25 20 5 38 9% 84% 7% 2,395 80 55 65 80 215 290 240 255 220 240 185 160 115 45 60 50 25 20 38 12% 80% 8% 6,833 6,047 13.0% 3,839 3,539 5,258 1.30 1,893 1,793 5.6% 1,109 1,035 6,126 0.31 2,394 2,145 11.6% 1,483 1,366 6,990 0.34
11,120 9,985 11.4% 6,431 5,940 5,703 1.95
2,116,581 1,986,965 6.5% 870,992 817,033 736 2,877
11,115 415 315 295 355 835 1,060 1,035 1,045 1,005 1,065 925 855 610 390 330 305 180 120 40 12% 76% 12%
2,116,580 105,280 112,270 128,185 137,190 148,515 143,300 146,410 165,640 182,145 178,250 160,130 139,650 98,140 76,575 64,570 54,185 40,650 35,480 39 23% 64% 13%
Occupied private dwelling characteristics Total private dwellings occupied by usual residents Owned dwellings, % Rented dwellings, % % of dwellings constructed between 1986 and 2006 Average value of owned dwelling ($) Selected household characteristics Total private households Average household size Median income in 2005 - All private households ($) Median monthly payments for rented dwellings ($) Median monthly payments for owner-occupied dwellings ($) Income in 2005 Persons 15 years and over with income (counts) % in low income before tax - All persons Median income - Persons 15 years and over ($) Earnings - As a % of total income $ 5,945 21.8% 29,206 77.6 $ 1,700 23.9% 27,155 88.3 $ 2,120 20.3% 27,408 81.3 $ $ $ 3,540 1.9 53,389 770 1,065 $ $ $ 1,035 1.7 46,490 807 1,019 $ $ $ 1,365 1.8 44,907 $ 3,540 67% 33% 76% 275,498 $ 1,035 45% 55% 44% 205,439 $ 1,365 43% 58% 19% 227,370
5,940 57% 43% 58% 236,102 $
817,230 65% 35% 41% 520,937
$ 694 $ 925 $
5,940 1.8 48,262 $ 757 $ 1,003 $
817,230 2.6 55,231 812 1,081
9,765 22.0% 27,923 $ 82.4
1,659,535 20.8% 25,032 78.0
Source: Statistics Canada, 2006 Census of Population.
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3.3
GENERAL STATISTICS
The following observations can be made:

Total population growth in the Downtown is almost double the metroarea average There are far fewer (that is, half as many) young people in the Downtown as compared to the metro-area average (12% of people are aged 19 and under as opposed to vs. 23% for the entire Metro Vancouver). Similarly, people aged 20-64 comprise a much higher proportion: 76% vs. 24%. The homeownership rate is lower, at 57% versus 65% region-wide. The building stock is newer than the rest of the region, with almost 60% of residential buildings Downtown having been built after 1986. The household size of 1.8 is well below the regional average of 2.6 Median household incomes are considerably lower Downtown than the Metro average: around $7,000 lower per household. That said, individual median incomes are approximately 11% higher than the region-wide average. This is a reflection of the much smaller household size. A slightly larger proportion of residents are considered low-income (22%).
Refer to Table 3 for further detail on these general statistics.
3.4
HOUSEHOLD STATISTICS

There is a much higher proportion of residents Downtown who speak English only, as compared to the regional average. There is a much higher degree of mobility of Downtown residents, with the percentage moving into the area from another municipality over three times higher than the regional average. There is a slightly higher degree of post-secondary educational attainment for Downtown residents The two most significant fields of study are business, management and public administration; and architecture; engineering; and related technologies
Refer to Table 3 for further detail on these household statistics.
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TABLE 3
DEMOGRAPHICS - CENSUS TRACTS 202, 206, 207, METRO VANCOUVER HOUSEHOLD STATISTICS
Mother tongue Total population English only French only English and French Other language(s) English only as a percentage of the total Immigrant status and period of immigration Total population Non-immigrants Immigrants Before 1991 1991 to 2000 2001 to 2006 Non-permanent residents Mobility status - Place of residence 1 year ago Total population 1 year and over Lived at the same address 1 year ago Lived within the same province 1 year ago; but changed addresses within the same municipality Lived within the same province 1 year ago; but changed addresses from another municipality in the same province Lived in a different province 1 year ago Lived in a different country 1 year ago Total population 5 years and over Lived at the same address 5 years ago Lived within the same province 5 year ago; but changed addresses within the same municipality Lived within the same province 5 year ago; but changed addresses from another municipality in the same province Lived in a different province 5 years ago Lived in a different country 5 years ago Moved to Downtown from another municipality in past year Educational attainment Total population 15 years and over No certificate; diploma or degree High school certificate or equivalent Apprenticeship or trades certificate or diploma College; CEGEP or other non-university certificate or diploma University certificate or diploma below the bachelor level University certificate; diploma or degree No postsecondary certificate; diploma or degree, % of total Postsecondary certificate; diploma or degree, % ot total Major field of study Total population 15 years and over No postsecondary certificate; diploma or degree Business; management and public administration Architecture; engineering; and related technologies Health; parks; recreation and fitness Social and behavioural sciences and law Education Humanities Mathematics; computer and information sciences Personal; protective and transportation services Visual and performing arts; and communications technologies Physical and life sciences and technologies Agriculture; natural resources and conservation Other 6,145 2,425 825 715 515 460 370 240 160 125 135 90 50 20 1,730 715 220 245 105 80 45 80 130 10 55 40 2,195 945 245 300 130 120 70 65 75 140 80 15 10 6,140 785 1,640 530 1,235 435 1,510 39% 61% 1,735 285 430 185 335 120 375 41% 59% 2,195 295 650 285 450 135 380 43% 57% 335 465 12% 60 115 15% 190 90 15% 1,840 755 665 160 90 6,570 2,660 1,265 15 10 1,775 580 265 50 10 2,310 935 425 790 275 350 6,780 5,245 500 1,835 1,310 220 2,385 1,780 190 6,830 4,435 2,320 910 910 505 75 1,870 1,225 585 225 225 130 60 2,395 1,760 615 320 205 85 20 6,830 4,430 160 2,240 65% 1,870 1,320 30 15 500 71% 535 76% 2,395 1,810 50
11,095 7,560 240 15 3,275 68%
2,097,960 1,190,555 24,135 2,850 880,420 57%
11,095 7,420 3,520 1,455 1,340 720 155
2,097,965 1,227,495 831,265 388,740 290,830 151,690 39,205
11,000 8,335 910 1,415 225 110 10,655 4,175 1,955 3,260 585 670
13%
2,076,590 1,724,425 191,935 90,485 22,030 47,710 1,992,495 1,043,415 482,670 240,040 60,680 165,685 4%
10,070 1,365 2,720 1,000 2,020 690 2,265 41% 59%
1,752,390 303,345 473,315 150,045 282,780 110,945 431,955 44% 56%
10,070 4,085 1,290 1,260 750 660 485 385 365 275 270 145 60 20
1,752,385 776,660 216,595 194,485 124,305 112,705 66,075 64,080 45,770 44,580 50,565 41,210 15,185 170
16
3.5
INDUSTRY STATISTICS
The Downtown employment participation rate and employment rate are higher than the region-wide average, and unemployment rate is lower than the regional average. The two most important occupational sectors are: o Sales and service occupations o Business, finance, and administration occupations The most important industry category by far is business services, followed distantly by manufacturing, health care and social services, retail trade, and then educational services. The number of workers working outside of their municipality of residence is very significant, with only 13% of Downtown residents employed within the City of New Westminster. Although data on employment within the Downtown is not available, it is the consultants considered opinion that the number of Downtown residents who also work Downtown is very small. The percentage of workers using other modes of transportation to their employment (that is, not as the driver of a private vehicle) is substantially higher than the regional average, with almost half of all employees using alternate modes or as a secondary passenger in a private vehicle. Furthermore, the number of Downtown residents using public transit to get to their employment is considerably higher (more than double) than the region-wide average, with over a third of all workplace-destined trips made with public transit. Median household incomes are considerably lower Downtown than the Metro average: around $7,000 lower per household. That said, individual median incomes are approximately 11% higher than the region-wide average. This is a reflection of the much smaller household size. A slightly larger proportion of residents are considered low-income (22%). Earnings constitute a higher percentage of incomes than the regional average (that is, pensions, investments, and other non-earnings sources are less significant for Downtown New Westminster residents as a means of generating income).
Refer to Table 4 for further detail on these industry statistics.
17
TABLE 4
DEMOGRAPHICS - CENSUS TRACTS 202, 206, 207, METRO VANCOUVER INDUSTRY AND EMPLOYMENT STATISTICS
Labour force activity Total population 15 years and over In the labour force Employed Unemployed Not in the labour force Participation rate Employment rate Unemployment rate Occupation Total experienced labour force 15 years and over G Sales and service occupations B Business; finance and administration occupations H Trades; transport and equipment operators and related occupations A Management occupations E Occupations in social science; education; government service, religion C Natural and applied sciences and related occupations J Occupations unique to processing; manufacturing and utilities D Health occupations F Occupations in art; culture; recreation and sport I Occupations unique to primary industry Industry Total experienced labour force 15 years and over Business services Manufacturing Health care and social services Retail trade Educational services Construction Finance and real estate Wholesale trade Agriculture and other resource-based industries Other services Place of work status Total employed labour force 15 years and over Worked in a different municipality in the regional district No fixed workplace address Worked in municipality of residence Worked at home Worked in a different regional district Worked in a different province Worked outside Canada Worked in municipality of residence as % of Total Mode of transportation to work Total employed labour force with a usual place of work Car; truck; van; as driver All other modes, as % of total Car; truck; van; as passenger Public transit Walked or bicycled All other modes Public transit, as % of total Income in 2005 Persons 15 years and over with income (counts) % in low income before tax - All persons Median income - Persons 15 years and over ($) Earnings - As a % of total income $ 5,945 21.8% 29,206 77.6 $ 1,700 23.9% 27,155 88.3 $ 2,120 20.3% 27,408 81.3 3,865 2,230 42% 190 1,220 190 25 32% 1,130 455 59% 20 530 85 35 47% 1,560 795 49% 50 625 65 20 40% 4,065 2,690 600 540 180 15 20 15 13% 16% 12% 1,185 785 145 185 55 10 1,620 1,070 275 195 65 10 10 4,220 1,040 425 450 380 325 240 260 210 55 840 1,205 275 105 90 130 55 65 90 75 40 275 1,645 455 170 130 130 135 145 70 60 15 330 4,220 1,025 710 450 565 505 365 220 225 125 30 1,205 265 275 170 110 65 165 45 50 35 15 1,645 480 285 315 125 135 100 60 45 80 20 6,140 4,265 4,060 205 1,880 69.5% 66.1% 4.8% 1,735 1,250 1,185 65 485 72.0% 68.3% 5.2% 2,195 1,680 1,620 60 515 76.5% 73.8% 3.6%
10,070 7,195 6,865 330 2,880 72.7% 69.4% 4.5%
1,752,390 1,169,725 1,104,760 64,960 582,665 66.8% 63.0% 5.6%
7,070 1,770 1,270 935 800 705 630 325 320 240 65
1,150,490 291,545 219,415 148,810 130,375 98,845 85,070 45,840 62,450 47,600 20,545
7,070 1,770 700 670 640 515 450 420 345 110 1,445
1,150,490 271,120 97,800 107,065 124,965 83,200 73,385 85,220 61,650 23,970 222,110
6,870 4,545 1,020 920 300 35 30 15 13%
1,104,760 478,420 135,850 373,880 91,595 11,640 3,230 10,140 34%
6,555 3,480 47% 260 2,375 340 80 36%
1,003,025 675,080 33% 70,985 165,435 80,000 11,520 16%
9,765 22.0% 27,923 $ 82.4
1,659,535 20.8% 25,032 78.0
18
3.6
ECONOMIC OUTLOOK UNCERTAINTY
It must be emphasized that, given the current economic conditions and uncertain outlook for economic growth, both within the Metro Vancouver region, as well as provincially, nationally, and internationally, there is considerable potential for the substantial deviation from the consultants findings, especially in the first one or even two five-year increments of the study period. In the long-run, however, the potential for deviation is much lower as the overall economic growth prospects for the city and region in the long-term remain quite healthy.
19
4.0 RETAIL MARKET ANALYSIS

This section of the report provides a category-by-category analysis of retail/commercial market opportunities for the Downtown subject area. The market share analysis and expenditure potentials presented in this section form an integral step in the identification of the most viable project components for the subject area. However, it must be borne in mind that over such an extensive study period, market shares and expenditure potential could vary considerably from that forecasted, and that such an analysis is intended not to provide specific indications of the exact amount of retail space to be absorbed over each period, but rather a general indication of the relative strength of various retail categories such that their absorption can be prioritized according to theme and location such that the optimum configuration is achieved.
4.1
RETAIL TRADE AREA DELINEATION:
This section identifies the primary and secondary trade areas, where relevant, from which the majority of retail and service commercial customers are likely to be derived. As noted in the Study Area Delineation, the retail trading area can be more tightly circumscribed as compared to the other land uses under consideration. The retail trade area can be said to represent the area from which approximately 90% of all retail sales will be derived. The consultant believes that the City of New Westminster itself will generally comprise the total trading area, which is further comprised of two sub-zones: the primary and the secondary trading zones. The Primary Zone is made up of the on-site population in the Downtown study area, and the Secondary Trading Zone is comprised of the remainder of the population of New Westminster. All other sales are anticipated to be inflow sales, that is, to account for spending in the study area by residents outside of the trading area. In the case of Downtown New Westminster, this would likely come in the form of employees who work in New Westminster but who do not live in New Westminster, students from outside of the city, and visitors.
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4.2
RETAIL SUPPLY
Generally speaking, there are three major retail-commercial areas within New Westminster (including the Downtown) and a further four major retailcommercial areas situated outside of New Westminster in the New Westminster/Coquitlam/Burnaby area that should be considered competitive supply: Downtown New Westminster Over and above the street-level retail along Columbia Street, the two of the most concentrated areas of retail activity in the Downtown are the Columbia Square shopping mall at Columbia Street and Royal Avenue and the soon-to-be-built Plaza 88 transit-oriented retail development:
Columbia Square is a 20-year-old 175,000 square foot shopping plaza at the far west end of the Downtown, and is anchored by a 20,000 square foot IGA. Plaza 88 will contain as much as 170,000 square feet of transit-oriented retail, including a 37,500-square-foot grocery store, a 17,500-square-foot drugstore and an 11,600-square-foot liquor store. The consultant is not yet aware of the specific nature of the remaining 100,000 square feet, and so cannot comment on the remainder of the supply in this new precinct.
It should be noted, however, that this Downtown retail supply, especially the new retail space coming onto the market over the next few years at Plaza 88, should not be seen as a threat to other Downtown retailers. Even though these stores will likely compete directly with certain other downtown retailers, this new supply will help to create a much stronger critical mass of retail, and thus remove the incentive for shoppers to leave Downtown altogether to fulfill the majority of their retail needs. The net result should be that more people opt to do most of their shopping downtown, resulting in higher overall sales for the entire precinct. Uptown New Westminster This commercial area, centered on the corner of 6th Street and 6th Avenue, was initially anchored by a Woodwards department store, which has since become the Royal City Centre shopping mall. The neighbourhood also includes the Westminster Centre, a four-storey office and retail complex home to national retailers and commercial services including London Drugs, TD Canada Trust, VanCity, BCAA, Starbucks, and McDonald's. The upper floors contain office space. Save-On-Foods will open a new store at Westminster Centre in the
21
summer of 2009. The area also includes the New Westminster Public Library, on 6th Avenue. Queensborough Landing Queensborough Landing is an agglomeration of large-format and national chain stores in the centre of Queensborough, including a Wal-Mart, Best Buy, Home Outfitters, Petcetera, numerous fashion chains, restaurants, and a few independent stores. Not far from this shopping area is the recently-relocated casino. Lougheed Town Centre Located in Burnaby, BC at the northwest corner of Austin Ave. and North Rd., Lougheed Town Centre is considered to be Burnaby's second premiere Regional Shopping Centre and attracts over 7 million shoppers per year. Opened in September 1969, this 600,000 sq. ft. shopping centre has 175 stores and services and is anchored by a 125,400 sq. ft. The Bay, a 136,300 sq. ft. Wal-Mart, a 30,000 sq. ft. Safeway, and a 35,000 sq. ft. London Drugs Store. Retail and commercial services that can be found in the Lougheed Town Centre include apparel, jewelry & gifts, shoes& bags, home furnishing & house wares, electronics, and books; specialty food & chocolate, cards & stationery; fast food outlets and restaurant; bank & financial services, beauty salon, medical & professional services, and travel services. United Boulevard / Lougheed Highway Located along Lougheed Highway and along United Boulevard in Coquitlam, this is one of the largest concentrations of warehouse-format and other big-box retailers, including a particularly heavy concentration of furniture and home furnishings, automotive, and other major national chains (for instance, Real Canadian Superstore, Home Depot, and IKEA, among others). Metrotown Metropolis at Metrotown is a powerful and dynamic shopping and entertainment complex, which is the second largest in Canada. A retail powerhouse in the trade area, the complex features an unparalleled mix of large and small format retailers, with 470 quality and brand name stores spread over 1.7 million sq. ft. of GLA. This formidable retail destination benefits from high annual traffic flows approaching 25 million vehicles per year, direct Skytrain and transit access, and abundant free parking. Ideally situated in the heart of Metro
22
Vancouver, the Metrotown node has an expansive trade area of over 1.7 million people and draws from all parts of the Lower Mainland. Big Bend With a total of over 600,000 square feet of retail space, the two power retailing centres in Burnabys Big Bend area (Big Bend Crossing and Marine Way Market), at the intersection of Marine Way and Byrne Road, include major national big-box tenants such as RONA, Winners/HomeSense, Michaels, PetSmart, Staples, Canadian Tire, London Drugs, PriceSmart Foods, and a variety of national and local restaurant tenants and CRUs. The presence of Big Bend within a few minutes drive of Downtown New Westminster is one of the strongest competitive threats to the health of the Downtown, given the ease and rapid access to and from the retail space here for Downtown residents, especially those living along the riverfront west of the Quay. Although the large-format stores in the Big Bend area will certainly have some negative impact on Downtown retailers, there is also an opportunity to provide a contrast between the homogeneous, large-format suburban-type retail supply at Big Bend, and the potential for small-scale, fine-grained, unique local retail Downtown, and to create an environment that is much more attractive in comparison to the other new-format/big-box precincts. As well, the social manifestation of shopping can be an attractive draw for the Downtown, as people spend more time and money if they can be offered an environment conducive to leisure, relaxation, and a social experience (unlike big boxes). The importance of these dynamics is discussed in greater depth later in this study.
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TABLE 5
BRITISH COLUMBIA PER CAPITA RETAIL EXPENDITURES
Total Population Per Capita Expenditure $ 339 $ 275 $ 59 $ 583 $ 686 $ 221 $ 2,100 $ 246 $ 374 $ 577 $ 602 $ 201 $ 1,622 $ 379 $ 336 $ 8,599 Province-Wide Yearly Total Expenditure ($M) $ 1,462.4 $ 1,188.8 $ 255.8 $ 2,520.2 $ 2,961.4 $ 955.7 $ 9,070.4 $ 1,062.1 $ 1,614.5 $ 2,493.8 $ 2,598.9 $ 869.4 $ 7,006.8 $ 1,638.7 $ 1,450.8 $ 37,149.7 4,320,300
Retail Trade Category Furniture stores Home furnishings stores Computer and software stores Home electronics and appliance stores Home centres and hardware stores Specialized building materials and garden stores Supermarkets Convenience and specialty food stores Beer, wine and liquor stores Pharmacies and personal care stores Clothing stores Shoe, clothing accessories and jewellery stores General merchandise stores Sporting goods, hobby, music and book stores Miscellaneous store retailers Total Retail Trade Expenditures
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
Q3 2008 ($M) 389.6 312.6 62.0 633.6 844.8 237.3 2,329.4 288.8 408.7 591.4 642.7 214.1 1,742.3 407.3 379.6 9,484.2
Province-Wide Quarterly Expenditure Q2 2008 ($M) Q1 2008 ($M) Q4 2007 ($M) 352.9 $ 321.7 $ 398.2 302.2 $ 253.9 $ 320.1 61.9 $ 62.7 $ 69.2 583.9 $ 540.8 $ 761.9 833.9 $ 566.0 $ 716.7 280.1 $ 194.5 $ 243.8 2,298.5 $ 2,162.6 $ 2,279.9 275.0 $ 245.0 $ 253.3 393.4 $ 339.8 $ 472.6 616.1 $ 597.8 $ 688.5 620.4 $ 528.6 $ 807.2 208.3 $ 165.3 $ 281.7 1,766.7 $ 1,449.4 $ 2,048.4 421.2 $ 321.0 $ 489.2 353.1 $ 331.6 $ 386.5 9,367.6 $ 8,080.7 $ 10,217.2 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Province-Wide Yearly Expenditures Projected* Historical 2008 ($M) 2007 ($M) 2006 ($M) 2005 ($M) 3,382.6 $ 3,191.1 $ 3,010.5 $ 2,865.1 2,736.1 $ 2,581.2 $ 2,435.1 $ 2,288.8 689.1 $ 650.1 $ 613.3 $ 569.3 611.8 $ 577.2 $ 544.5 $ 520.0 7,419.6 $ 6,999.6 $ 6,603.4 $ 6,243.2 Per Capita Expenditure $ $ $ $ $ 783 633 160 142 1,717 $ $ $ $ $
Eating and Drinking Full Service Restaurant Limited Service Restaurant Drinking Places Special Food Services, Catering, and Other Total Eating and Drinking Expenditures
$ $ $ $ $
2004 ($M) 2,665.7 2,183.8 594.5 451.3 5,895.3
*Note: Eating and Drinking expenditures assumed to rise by 6% per annum for 2007 and 2008, in keeping with growht trend for both previous years. Sources: Statistics Canada: Retail Trade, by Type and Province Statistics Canada: Food Services and Drinking Places by Province, 2004-2006
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4.3
RETAIL DEMAND ANAYSIS
This is an assessment of retail and commercial service opportunities, derived primarily from a forecast of population growth and real increases in per capita expenditures. Additionally, in view of the uncertainty in the market and economic environment, a variety of scenarios is employed in order to account for a range of likely market shares that the proposed project might be able to capture. This key component of the retail element of the study identifies the local per capital average expenditures for different types of retail and commercial service activity. In particular, these per capita retail expenditures are adjusted to reflect both income and related demographic considerations.
4.4
TRADE AREA PER CAPITA EXPENDITURES
Using Statistics Canadas Retail Trade Survey Catalogue for the four most recent quarters for which data is available, the consultant has compiled relevant provincial averages of per capita expenditures for a select number of retail and commercial categories, as seen in Table 5. This includes all department store-type merchandise categories, as well as food and grocery, liquor/beer/wine, and eating and drinking. Automotive and auto-related expenditures are not included. Table 6 provides an index for the trade area based on mean income for New Westminster as compared to B.C. as a whole, from which the per capita expenditures for the trade area can be estimated. Because of the lower mean income of New Westminster, a 5% discount from the provincial spending average has been applied. This results in a total estimated $8,169 per capita for retail trade, and a further $1,452 per capita on eating and drinking. Of the retail trade figure, the consultant has broken the total into two categories for the purpose of this analysis: convenience retail and comparison retail. For purposes of this analysis, convenience retail includes supermarket, convenience and specialty food stores, pharmacy and personal care, and beer/wine/liquor stores. For purposes of this analysis, comparison retail includes all non-convenience store types, such as furniture and home furnishings, electronics and appliances, home centres and hardware, building materials and garden stores, clothing stores, shoe and accessory, general merchandise, sporting goods, hobby, music, book stores, and miscellaneous retailers. This does not include auto dealerships, auto parts and service, or service stations.
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TABLE 6
NEW WESTMINSTER PER CAPITA RETAIL EXPENDITURES
Per Capita Income
(1)
BC 35,834 0% $
New Westminster 33,625 -5%
Average Per Capita Income (2006) $ Per Capita Expenditure Adjustment Relative to Province
(2)
Retail Trade Category
BC $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 339 275 59 583 686 221 2,100 246 374 577 602 201 1,622 379 336 8,599 3,296 5,303 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
New Westminster 322 261 56 554 651 210 1,995 234 355 548 572 191 1,541 360 319 8,169 3,131 5,037
Furniture stores Home furnishings stores Home electronics and appliance stores Home electronics and appliance stores Home centres and hardware stores Specialized building materials and garden stores Supermarkets Convenience and specialty food stores Beer, wine and liquor stores Pharmacies and personal care stores Clothing stores Shoe, clothing accessories and jewellery stores General merchandise stores Sporting goods, hobby, music and book stores Miscellaneous store retailers Total Retail Trade Expenditures Convenience Shopping (3) Comparison Shopping (4)
Eating and Drinking Full Service Restaurant Limited Service Restaurant Drinking Places Special Food Services and Other Total Eating and Drinking Expenditures $ $ $ $ $
BC 783.00 633.30 159.50 141.60 1,717.40 $ $ $ $ $
New Westminster 743.90 601.60 151.50 134.50 1,631.50
Sources: 1. BC Stats - Community Profiles 2. Previous table Notes: 3. For purposes of this analysis, convenience retail includes supermarket, convenience and specialty food stores, pharmacy and personal care, and beer/wine/liquor stores. 4. For purposes of this analysis, comparison retail includes all non-convenience store types, such as furniture and home furnishings, electronics and appliances, home centres and hardware, building materials and garden stores, clothing stores, shoe and accessory, general merchandise, sporting goods, hobby, music, book stores, and miscellaneous retailers. Does not include auto dealerships, auto parts and service, or service stations.
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It should be noted that this is a somewhat crude distinction, given that many items sold at a store in the convenience category in fact exhibit comparison qualities (e.g. a specific wine, health care product, or specialty food all of which would be sold in a convenience-type store under this classification), while the converse is true of many items sold at comparison-type stores that in fact exhibit more convenience-oriented qualities. There is also the problem of various store types in one category offering merchandise that falls under that of the other category. For instance, many grocery stores also sell house-ware items, and conversely, many general merchandisers sell grocery items. On the whole, though, such exceptions as noted above are in the minority, and that said, observations based on these categorizations should generally be considered quite reliable, given the data sets available. The above per capita expenditure estimates will be examined, along with the previously presented trade area population figures, to project the total retail expenditure potential in the subject area. These in turn will form the basis of subsequent market opportunity assessments, on a category-by-category basis. The total expenditure potential of the Downtown population base is multiplied by the per capita expenditures for this category in order to determine the total spending potential of the study area. This is then multiplied by the share of the spending in this category by the study area (that is, any number less than 100% means that a certain portion of the populations spending is undertaken outside of the study area.) Furthermore, a secondary zone made up of the remainder of New Westminster would also be expected to spend a portion of their retail spending in the Downtown, albeit at a smaller share than the on-site residents. Accordingly, their total expenditure potential (per capita spending multiplied by trading zone population for each expenditure category) is multiplied by an anticipated share of spending to arrive at the projected secondary zone spending amount. A further amount of inflow spending is added to account for spending in the study area by residents outside of the trading area. As noted above, in the case of Downtown New Westminster, this would likely come in the form of employees who work in New Westminster but who do not live in the city, students from outside of the city, and visitors. The increases in inflow assumptions used throughout this analysis are predicated on assumptions of increasing attraction and destination-ness of the Downtown, and rely on the understanding that not only will improvements to waterfront accessibility readily come to fruition, but that the Downtown will experience an expansion and improvement in its urban merchandising mix (that is, not just retail, but also eating and drinking, arts and culture, and employment).
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CONVENIENCE SHOPPING As is shown on Table 7, average annual per capita convenience retail expenditures have been estimated using per capita retail trade data, adjusted downward slightly to reflect the slightly lower average household incomes of the study area population. Further, per capita expenditures have been adjusted upward by a factor of 1% per annum (as per the medium scenario) to account for real increases in average per capita spending levels commensurate with presumed increases in average per capita incomes. In light of the presence of very strong competitive retail facilities outside of the Downtown as detailed above, the consultant has applied relatively conservative site market shares with market shares rising over the course of the study period to reflect a broader and deeper array of offerings in this merchandise category. This is true both of the primary and secondary trading zones. Under the medium-case scenario, starting at 40% and 15% of the primary and secondary trading zones, respectively, in 2011, the study areas market share is expected to rise to 55% and 25%, respectively, by the end of the study period. After accounting for anticipated inflow sales, this translates into an estimated study area expenditure level totalling $44 million by 2011, rising to as much as $114 million by 2026. All dollar values are expressed in 2006 dollar value terms. At an assumed productivity level of $350 per square foot a year, the medium scenario indicates demand for convenience retail space of around 125,000 square feet in 2011, rising to 240,000 square feet by 2026. Although a large portion of this demand would be met by the existing facilities in Columbia Square and the eventual transit village around New Westminster Station, there is still potential for further incremental additions of conveniencetype retail, especially in the form of, for instance, specialty food shops, and other unmet imported grocery or wine/beer/spirit niche stores.
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TABLE 7
CONVENIENCE SHOPPING - MARKET DEMAND
2006
Primary Zone - Downtown Population - Low Scenario (1) Population - Medium Scenario Population (1) - High Scenario Per Capita Expenditures - Low Scenario (2) Per Capita Expenditures - Medium Scenario Per Capita Expenditures
(2) (2) (1)
2011
8,900 8,900 8,900 10,600 10,600 10,600 $ $ $ $ $ $ 3,250 3,291 3,373 34,455,283 34,884,894 35,756,974 35% 40% 45% $ $ $ 12,059,349 13,953,958 16,090,638 $ $ $ $ $ $ $ $ $
2016
12,700 12,600 12,700 3,374 3,459 3,634 42,852,775 43,582,181 46,151,819 40% 45% 50% 17,141,110 19,611,981 23,075,909 $ $ $ $ $ $ $ $ $
2021
15,200 15,400 15,800 3,503 3,635 3,915 53,240,741 55,984,268 61,854,656 42% 50% 55% 22,361,111 27,992,134 34,020,061 $ $ $ $ $ $ $ $ $
2026
18,200 18,400 19,300 3,636 3,821 4,217 66,175,489 70,302,372 81,395,957 45% 55% 60% 29,778,970 38,666,304 48,837,574
$ $ $ $ $ $
3,131 3,131 3,131 27,868,570 27,868,570 27,868,570
- High Scenario
Expenditure Potential - Low Scenario Expenditure Potential - Medium Scenario Expenditure Potential - High Scenario Market Share of Primary Zone Spending - Low Market Share of Primary Zone Spending - Base Market Share of Primary Zone Spending - High Projected Sales Volume - Low Scenario Projected Sales Volume - Medium Scenario Projected Sales Volume - High Scenario Secondary Zone - New West Non-Downtown Population (1) - Low Scenario Population (1) - Medium Scenario Population
(1)
52,700 52,700 52,700 $ $ $ $ $ $ 3,131 3,131 3,131 165,019,510 165,019,510 165,019,510 $ $ $ $ $ $
56,400 56,400 56,500 3,250 3,291 3,373 183,328,108 185,613,966 190,591,416 10% 15% 15% $ $ $ 18,332,811 27,842,095 28,588,712 5% $ $ $ 1,519,608 2,089,803 2,233,968 $ $ $ $ $ $ $ $ $ $ $ $
59,200 59,200 60,400 3,374 3,459 3,634 199,754,666 204,767,073 219,493,690 10% 17% 20% 19,975,467 34,810,402 43,898,738 7.5% 2,783,743 4,081,679 5,023,099 $ $ $ $ $ $ $ $ $ $ $ $
64,100 64,100 66,800 3,503 3,635 3,915 224,521,807 233,025,428 261,512,092 13% 20% 25% 29,187,835 46,605,086 65,378,023 10% 5,154,895 7,459,722 9,939,808 $ $ $ $ $ $ $ $ $ $ $ $
67,600 67,600 71,900 3,636 3,821 4,217 245,794,675 258,284,800 303,231,569 15% 25% 30% 36,869,201 64,571,200 90,969,471 10% 6,664,817 10,323,750 13,980,704
- High Scenario
(2)
Per Capita Expenditures - Low Scenario (2) Per Capita Expenditures - Medium Scenario Per Capita Expenditures (2) - High Scenario Expenditure Potential - Low Scenario Expenditure Potential - Medium Scenario Expenditure Potential - High Scenario Market Share of Secondary Zone Spending - Low Market Share of Secondary Zone Spending - Base Market Share of Secondary Zone Spending - High Projected Sales Volume - Low Scenario Projected Sales Volume - Medium Scenario Projected Sales Volume - High Scenario INFLOW SALES LEVEL: Inflow Sales Volume - Low Scenario Inflow Sales Volume - Medium Scenario Inflow Sales Volume - High Scenario TOTAL PROJECTED SITE SALES VOLUME: Total Sales Volume - Low Scenario Total Sales Volume - Medium Scenario Total Sales Volume - High Scenario ESTIMATED PER SQ.FT. PRODUCTIVITY:
(4)
$ $ $ $
31,911,768 43,885,855 46,913,318 350
$ $ $ $
39,900,320 58,504,063 71,997,746 386
$ $ $ $
56,703,841 82,056,942 109,337,892 427
$ $ $ $
73,312,989 113,561,255 153,787,749 471
TOTAL WARRANTED FLOORSPACE (SQ.FT.): LOW SCENARIO MEDIUM SCENARIO HIGH SCENARIO 91,000 125,000 134,000 103,000 151,000 186,000 133,000 192,000 256,000 156,000 241,000 326,000
Notes: 1. See tables of per capita retail spending by category 2. Assumed real per capita expenditure per annum increases of 0.75% for low, 1% for medium, and 1.5% high scenarios, respectively. 3. For purposes of this analysis, convenience retail includes supermarket, convenience and specialty food stores, pharmacy and personal care, and beer/wine/liquor stores. 4. Productivity assumed to grow at a nominal 2% per annum. Source: Urbanics Consultants Ltd.
29
COMPARISON SHOPPING As is shown on Table 8, average annual per capita comparison retail expenditures have been estimated using per capita retail trade data, adjusted downward slightly to reflect the slightly lower average household incomes of the study area population. Further, per capita expenditures have been adjusted upward by a factor of 1% per annum (as per the medium scenario) to account for real increases in average per capita spending levels commensurate with presumed increases in average per capita incomes. In light of the presence of very strong competitive retail facilities outside of the Downtown as detailed above, the consultant has applied relatively conservative site market shares albeit rising over the course of the study period to reflect a broader and deeper array of offerings in this merchandise category. This is true both of the primary and secondary trading zones. Under the medium scenario, starting at 20% and 10% of the primary and secondary trading zones, respectively, in 2011, the study areas market share is expected to rise to 35% and 20%, respectively, by the end of the study period. After accounting for anticipated inflow sales, this translates into an estimated study area expenditure level totalling $45 million by 2011, rising to as much as $142 million by 2026. All dollar values are expressed in 2006 dollar value terms. At an assumed productivity level of $300 per square foot a year, the medium scenario indicates demand for comparison retail space of around 130,000 square feet by 2011, rising to 300,000 square feet by 2026. Although a large portion of this demand would be met by certain existing retail facilities along Columbia Street and in certain pre-existing retail areas (e.g. Columbia Square), there is still considerable potential for further additions of comparison-type retail throughout the Downtown in a wide variety of merchandise categories especially local shops of a specialty character. (The elements of merchandising concepts are discussed later in the report.)
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TABLE 8
COMPARISON SHOPPING - MARKET DEMAND
2006
Primary Zone - Downtown Population - Low Scenario (1) Population - Medium Scenario Population
(1) (1)
2011
8,900 8,900 8,900 10,600 10,600 10,600 $ $ $ $ $ $ 5,229 5,294 5,426 55,426,867 56,117,967 57,520,847 15% 20% 25% $ $ $ 8,314,030 11,223,593 14,380,212 $ $ $ $ $ $ $ $ $
2016
12,700 12,600 12,700 5,428 5,564 5,846 68,935,585 70,108,952 74,242,628 17% 25% 30% 11,719,049 17,527,238 22,272,788 $ $ $ $ $ $ $ $ $
2021
15,200 15,400 15,800 5,635 5,848 6,298 85,646,300 90,059,705 99,503,170 20% 30% 35% 17,129,260 27,017,912 34,826,109 $ $ $ $ $ $ $ $ $
2026
18,200 18,400 19,300 5,849 6,146 6,784 106,453,925 113,092,679 130,938,496 25% 35% 40% 26,613,481 39,582,438 52,375,398
- High Scenario
(2)
Per Capita Expenditures - Low Scenario (2) Per Capita Expenditures - Medium Scenario Per Capita Expenditures
(2)
$ $ $ $ $ $
5,037 5,037 5,037 44,831,080 44,831,080 44,831,080
- High Scenario
Expenditure Potential - Low Scenario Expenditure Potential - Medium Scenario Expenditure Potential - High Scenario Market Share of Primary Zone Spending - Low Market Share of Primary Zone Spending - Base Market Share of Primary Zone Spending - High Projected Sales Volume - Low Scenario Projected Sales Volume - Medium Scenario Projected Sales Volume - High Scenario Secondary Zone - New West Non-Downtown Population - Low Scenario (1) Population - Medium Scenario Population
(1) (1)
52,700 52,700 52,700 $ $ $ $ $ $ 5,037 5,037 5,037 265,460,440 265,460,440 265,460,440 $ $ $ $ $ $
56,400 56,400 56,500 5,229 5,294 5,426 294,912,766 298,589,937 306,596,967 5% 10% 15% $ $ $ 14,745,638 29,858,994 45,989,545 10% $ $ $ 2,305,967 4,108,259 6,036,976 $ $ $ $ $ $ $ $ $ $ $ $
59,200 59,200 60,400 5,428 5,564 5,846 321,337,529 329,400,792 353,090,925 7% 15% 20% 22,493,627 49,410,119 70,618,185 12% 4,105,521 8,032,483 11,146,917 $ $ $ $ $ $ $ $ $ $ $ $
64,100 64,100 66,800 5,635 5,848 6,298 361,179,462 374,858,904 420,684,287 10% 20% 25% 36,117,946 74,971,781 105,171,072 15% 7,987,081 15,298,454 20,999,577 $ $ $ $ $ $ $ $ $ $ $ $
67,600 67,600 71,900 5,849 6,146 6,784 395,400,293 415,492,670 487,796,781 15% 20% 25% 59,310,044 83,098,534 121,949,195 15% 12,888,529 18,402,146 26,148,689
- High Scenario
(2)
(2)
- High Scenario
Expenditure Potential - Low Scenario Expenditure Potential - Medium Scenario Expenditure Potential - High Scenario Market Share of Secondary Zone Spending - Low Market Share of Secondary Zone Spending - Base Market Share of Secondary Zone Spending - High Projected Sales Volume - Low Scenario Projected Sales Volume - Medium Scenario Projected Sales Volume - High Scenario INFLOW SALES LEVEL: Inflow Sales Volume - Low Scenario Inflow Sales Volume - Medium Scenario Inflow Sales Volume - High Scenario TOTAL PROJECTED SITE SALES VOLUME: Total Sales Volume - Low Scenario Total Sales Volume - Medium Scenario Total Sales Volume - High Scenario ESTIMATED PER SQ.FT. PRODUCTIVITY:
(4)
$ $ $ $
25,365,635 45,190,846 66,406,732 350
$ $ $ $
38,318,198 74,969,840 104,037,890 386
$ $ $ $
61,234,287 117,288,146 160,996,758 427
$ $ $ $
98,812,054 141,083,117 200,473,283 471
Notes: 1. See tables of per capita retail spending by category 2. Assumed real per capita expenditure per annum increases of 0.75% for low, 1% for medium, and 1.5% high scenarios, respectively. 3. For purposes of this analysis, comparison retail includes all non-convenience store types, such as furniture and home furnishings, electronics and appliances, home centres and hardware, building materials and garden stores, clothing stores, shoe and accessory, general merchandise, sporting goods, hobby, music, book stores, and miscellaneous retailers. Does not include auto dealerships, auto parts and service, or service stations. 4. Productivity assumed to grow at a nominal 2% per annum. Source: Urbanics Consultants Ltd.
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EATING AND DRINKING The eating & drinking category refers to all purchases made in restaurants, both full-service and limited-service/fast-food. As is shown on Table 9, average annual per capita eating and drinking retail expenditures have been estimated using per capita retail trade data, adjusted downward slightly to reflect the slightly lower average household incomes of the study area population. Further, per capita expenditures have been adjusted upward by a factor of 1% per annum (as per the medium scenario) to account for real increases in average per capita spending levels commensurate with presumed increases in incomes. In light of the presence of competitive retail facilities outside of the Downtown (albeit not quite to the same degree as evidenced in other retail categories), the consultant has applied conservative market shares rising fairly rapidly over the course of the study period to reflect a broader and deeper array of restaurant and caf offerings especially if the riverfront can be made more accessible, if a stronger retail cluster develops in the Downtown, and if the downtown employment base grows in accordance with the recommendations contained herein. Again, site market shares are expected to be relatively higher, as on-site workers, shoppers, and residents elect to visit restaurants and cafs in closer proximity, rather than traveling uptown or elsewhere. This rise in anticipated market shares should be true both of the primary and secondary trading zones. According to the medium attraction scenario, market shares by 2011 might start at 25% and 15% of the primary and secondary trading zones, respectively, and the study areas market share would be expected to rise to 40% and 35%, respectively, by the end of the study period. After accounting for anticipated inflow sales, this translates into an estimated study area expenditure level totalling $24 million by 2011, rising to as much as $75 million by 2026. All dollar values are expressed in 2006 dollar value terms. At an assumed productivity level of $350 per square foot a year, the medium scenario indicates demand for eating and drinking retail space of around 68,000 square feet by 2011, rising to 158,000 square feet by 2026. Although the precise nature of this restaurant space cannot be determined at this time, the most important consideration is that of diversity. An ideal circumstance would include a variety of eating and drinking options at different price points and serving different market segments (family, pub, ethnic, contemporary, etc.) with both independent and chain operators. Accordingly, all recruitment efforts should focus on attracting establishments that fill currently unmet market niches. It should also be emphasized that this new supply need not necessarily be in direct competition with the existing supply, since the creation of more critical mass is of benefit to all establishments in this category.
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TABLE 9
EATING AND DRINKING - MARKET DEMAND
2006
Primary Zone - Downtown Population - Low Scenario (1) Population - Medium Scenario Population
(1) (1)
2011
8,900 8,900 8,900 10,600 10,600 10,600 $ $ $ $ $ $ 1,694 1,715 1,758 17,952,222 18,176,063 18,630,442 15% 25% 30% $ $ $ 2,692,833 4,544,016 5,589,133 $ $ $ $ $ $ $ $ $
2016
12,700 12,600 12,700 1,758 1,802 1,893 22,327,564 22,707,607 24,046,464 20% 30% 35% 4,465,513 6,812,282 8,416,262 $ $ $ $ $ $ $ $ $
2021
15,200 15,400 15,800 1,825 1,894 2,040 27,740,002 29,169,461 32,228,107 25% 35% 40% 6,935,001 10,209,311 12,891,243 $ $ $ $ $ $ $ $ $
2026
18,200 18,400 19,300 1,894 1,991 2,197 34,479,389 36,629,617 42,409,703 30% 40% 50% 10,343,817 14,651,847 21,204,852
- High Scenario
(2)
(2)
$ $ $ $ $ $
1,632 1,632 1,632 14,520,350 14,520,350 14,520,350
- High Scenario
Expenditure Potential - Low Scenario Expenditure Potential - Medium Scenario Expenditure Potential - High Scenario Market Share of Primary Zone Spending Market Share of Primary Zone Spending Market Share of Primary Zone Spending Projected Sales Volume - Low Scenario Projected Sales Volume - Medium Scenario Projected Sales Volume - High Scenario Secondary Zone - New West Non-Downtown Population - Low Scenario (1) Population - Medium Scenario Population
(1) (1)
52,700 52,700 52,700 $ $ $ $ $ $ 1,632 1,632 1,632 85,980,050 85,980,050 85,980,050 $ $ $ $ $ $
56,400 56,400 56,500 1,694 1,715 1,758 95,519,371 96,710,371 99,303,770 10% 15% 20% $ $ $ 9,551,937 14,506,556 19,860,754 25% $ $ $ 3,061,193 4,762,643 6,362,472 $ $ $ $ $ $ $ $ $ $ $ $
59,200 59,200 60,400 1,758 1,802 1,893 104,078,095 106,689,707 114,362,710 12% 20% 25% 12,489,371 21,337,941 28,590,678 30% 5,086,465 8,445,067 11,102,082 $ $ $ $ $ $ $ $ $ $ $ $
64,100 64,100 66,800 1,825 1,894 2,040 116,982,508 121,413,147 136,255,542 15% 25% 35% 17,547,376 30,353,287 47,689,440 35% 8,568,832 14,196,909 21,203,239 $ $ $ $ $ $ $ $ $ $ $ $
67,600 67,600 71,900 1,894 1,991 2,197 128,066,302 134,574,027 157,992,625 15% 30% 40% 19,209,945 40,372,208 63,197,050 35% 10,343,817 19,258,419 29,540,665
- High Scenario
(2)
(2)
- High Scenario
(3)
$ $ $ $
15,305,963 23,813,214 31,812,358 350
$ $ $ $
22,041,349 36,595,290 48,109,022 386
$ $ $ $
33,051,209 54,759,507 81,783,921 427
$ $ $ $
39,897,579 74,282,474 113,942,567 471
Notes: 1. See tables of per capita retail spending by category 2. Assumed real per capita expenditure per annum increases of 0.75% for low, 1% for medium, and 1.5% high scenarios, respectively. 3. Productivity assumed to grow at a nominal 2% per annum. Source: Urbanics Consultants Ltd.
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SERVICE COMMERCIAL These facilities generally include barber shops, hair stylists, day spa and beauty parlour, dry-cleaning services, laundromats, etc. but exclude financial services, insurance, real estate, travel agency, video rental, and the like. The consultant has derived the per capita expenditure figure for service-commercial transactions based on the Statistics Canada Survey of Household Spending for BC, which indicate per capita expenditures should amount to approximately $250 for 2006. This amount is adjusted upward over the course of the study period by assuming an annual real increase in these expenditures of 1% per annum (as per the medium scenario) commensurate with presumed increases in average per capita incomes. Because service commercial is generally of a local-serving orientation as opposed to regional, the consultant has applied much more aggressive market shares than was the case with other retail categories, and rising over the course of the study period to reflect a broader and deeper array of offerings in this commercial category. This is true both of the primary and secondary trading zones, as not only should the increased depth and breadth attract business from throughout the trading area, but the presence of a considerable Downtown employment base would also help to bring in inflow spending in this category. Under the medium scenario, starting at 45% and 25% of the primary and secondary trading zones, respectively, in 2011, the study areas market share is expected to rise to 70% and 35%, respectively, by the end of the study period. After accounting for anticipated inflow sales, this translates into an estimated study area expenditure level totaling $6.4 million by 2011, rising to as much as $15 million by 2026. All dollar values are expressed in 2006 dollar value terms. At an assumed productivity level of $350 per square foot a year, the medium scenario indicates demand for comparison retail space of around 18,000 square feet in 2011, rising to 32,000 square feet by 2026. These figures can be found in Table 10.
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TABLE 10
SERVICE COMMERCIAL - MARKET DEMAND
2006
Primary Zone - Downtown Population (1) - Low Scenario Population (1) - Medium Scenario Population (1) - High Scenario Per Capita Expenditures - Low Scenario (2) Per Capita Expenditures - Medium Scenario Per Capita Expenditures
(2) (2)
2011
8,900 8,900 8,900 10,600 10,600 10,600 $ $ $ $ $ $ 270 273 280 2,860,912 2,896,584 2,968,995 40% 45% 50% $ $ $ 1,144,365 1,303,463 1,484,497 $ $ $ $ $ $ $ $ $
2016
12,700 12,600 12,700 280 287 302 3,558,178 3,618,742 3,832,106 45% 55% 60% 1,601,180 1,990,308 2,299,263 $ $ $ $ $ $ $ $ $
2021
15,200 15,400 15,800 291 302 325 4,420,717 4,648,520 5,135,953 50% 65% 70% 2,210,359 3,021,538 3,595,167 $ $ $ $ $ $ $ $ $
2026
18,200 18,400 19,300 302 317 350 5,494,723 5,837,389 6,758,518 50% 70% 70% 2,747,362 4,086,172 4,730,963
$ $ $ $ $ $
260 260 260 2,314,000 2,314,000 2,314,000
- High Scenario
Expenditure Potential - Low Scenario Expenditure Potential - Medium Scenario Expenditure Potential - High Scenario Market Share of Primary Zone Spending Market Share of Primary Zone Spending Market Share of Primary Zone Spending Projected Sales Volume - Low Scenario Projected Sales Volume - Medium Scenario Projected Sales Volume - High Scenario Secondary Zone - New West Non-Downtown Population - Low Scenario Population (1) - Medium Scenario Population
(1) (1)
52,700 52,700 52,700 $ $ $ $ $ $ 260 260 260 13,702,000 13,702,000 13,702,000 $ $ $ $ $ $
56,400 56,400 56,500 270 273 280 15,222,211 15,412,011 15,825,302 15% 25% 25% $ $ $ 2,283,332 3,853,003 3,956,326 25% $ $ $ 856,924 1,289,116 1,360,206 $ $ $ $ $ $ $ $ $ $ $ $
59,200 59,200 60,400 280 287 302 16,586,151 17,002,344 18,225,133 20% 30% 35% 3,317,230 5,100,703 6,378,797 30% 1,475,523 2,127,303 2,603,418 $ $ $ $ $ $ $ $ $ $ $ $
64,100 64,100 66,800 291 302 325 18,642,631 19,348,709 21,714,031 25% 35% 40% 4,660,658 6,772,048 8,685,612 30% 2,061,305 2,938,076 3,684,234 $ $ $ $ $ $ $ $ $ $ $ $
67,600 67,600 71,900 302 317 350 20,408,972 21,446,060 25,178,107 25% 35% 40% 5,102,243 7,506,121 10,071,243 30% 2,354,881 3,477,688 4,440,662
- High Scenario
(2)
(2)
- High Scenario
(3)
$ $ $ $
4,284,620 6,445,582 6,801,029 350
$ $ $ $
6,393,933 9,218,315 11,281,478 386
$ $ $ $
8,932,321 12,731,662 15,965,013 427
$ $ $ $
10,204,486 15,069,981 19,242,868 471
Notes: 1. See tables of per capita retail spending by category 2. Assumed real per capita expenditure per annum increases of 0.75% for low, 1% for medium, and 1.5% high scenarios, respectively. Includes dressmaking, tailoring, clothing storage and other clothing services, laundry and dry-cleaning services, laundromats and self-service dry cleaning, hair grooming and other personal services. Excludes financial services, insurance, real estate, travel agency, video rental, etc. 3. Productivity assumed to grow at a nominal 2% per annum. Source: Urbanics Consultants Ltd.
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OTHER In addition to the retail and service-commercial space requirements noted above, the need for other type of commercial and professional arts space will be required to house financial, insurance, and real estate services, travel agencies, video rental, pet care, florist, rental car, and other similar commercial functions with retail-like characteristics. As the Downtown population continues to expand and as the on-site employment base does likewise, there should be sustained growth in demand for these service types. The space required for such functions is conservatively estimated at around 10% of the total retail space in the subject area, with a range provided to indicate the possible variation upwards or downwards by a few percentage points. Based on this ratio, the consultant anticipates as much as 34,000 square feet of such space in the subject area by 2011, rising to 73,000 square feet by 2026, under the assumption of the medium growth scenario and with a conventional 10% ratio.
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TABLE 11
RETAIL DEMAND - SUMMARY
RETAIL CATEGORY CONVENIENCE SHOPPING TOTAL WARRANTED FLOORSPACE (sq.ft.): LOW SCENARIO MEDIUM SCENARIO HIGH SCENARIO COMPARISON SHOPPING TOTAL WARRANTED FLOORSPACE (sq.ft.): LOW SCENARIO MEDIUM SCENARIO HIGH SCENARIO EATING AND DRINKING TOTAL WARRANTED FLOORSPACE (sq.ft.): LOW SCENARIO MEDIUM SCENARIO HIGH SCENARIO SERVICE-COMMERCIAL TOTAL WARRANTED FLOORSPACE (sq.ft.): LOW SCENARIO MEDIUM SCENARIO HIGH SCENARIO OTHER SERVICES TOTAL WARRANTED FLOORSPACE (sq.ft.): @ 7.5% of total retail space @ 10% of total retail space @ 12.5% of total retail space 2011 2016 2021 2026
91,000 125,000 134,000
103,000 151,000 186,000
133,000 192,000 256,000
156,000 241,000 326,000
72,000 129,000 190,000
99,000 194,000 269,000
144,000 275,000 377,000
210,000 300,000 426,000
44,000 68,000 91,000
57,000 95,000 124,000
77,000 128,000 192,000
85,000 158,000 242,000
12,000 18,000 19,000
17,000 24,000 29,000
21,000 30,000 37,000
22,000 32,000 41,000
16,000 34,000 54,000
21,000 46,000 76,000
28,000 63,000 108,000
35,000 73,000 129,000
TOTAL WARRANTED FLOORSPACE (sq.ft.): TOTAL WARRANTED FLOORSPACE (sq.ft.): LOW SCENARIO MEDIUM SCENARIO HIGH SCENARIO TOTAL RETAIL SPACE (@ MEDIUM SCENARIO) INCREMENTAL NEW RETAIL SPACE DEMAND CUMULATIVE NEW RETAIL SPACE DEMAND
235,000 374,000 488,000 374,000
297,000 510,000 684,000 510,000 136,000 136,000
403,000 688,000 970,000 688,000 178,000 314,000
508,000 804,000 1,164,000 804,000 116,000 430,000
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4.5
RETAIL MARKET SUMMARY
The projected retail space demand from 2011 to 2026 can be seen in Table 11, which indicates that over the course of the study period, an additional 430,000 square feet of retail and retail-like activity should be warranted in the subject area, for a total of around 800,000 square feet of retail space. It should be noted that there may appear to be a discrepancy between the forecasted retail demand and what is currently present in the study area as indicated in the November 2008 study commissioned by the City of New Westminster. This study indicates a current supply of around 700,000 square feet of retail in the Downtown area, whereas the findings in this report indicate that such demand should not be reached until 2016. This should not be interpreted as a signal that retail demand in Downtown New Westminster is already stronger than what is envisioned by the consultant seven years into the future. Rather, this should be seen as an indication of the low per square foot retail productivity currently evidenced in the Downtown, which lags far behind what would normally be expected of a healthy retail precinct. The result of this low productivity is that a much larger amount of square footage is required to generate the same level of retail sales that should be generated from a much smaller amount of space under normal market conditions. The result of this low productivity is a crowding out of other establishments and the prevention of the creation of the diversity and critical mass needed to accelerate the retail strength of the precinct. Furthermore, it should also be re-emphasized that market share assumptions employed throughout these analyses are both practical and conservative, but are conditional on a series of other policy actions on the part of the City the details of which are described further below in this report. In the absence of these policy measures, these market shares will not be possible because the precinct will not be able to attract sufficient people into the area and Columbia Street will continue on its present course and the remainder of the Downtown will follow suit. As a further aside, a discrepancy between these findings and those that were indicated in the November 2008 study warrants some explanation, as the findings are materially different. A substantial portion of this discrepancy is likely due to the use of systematic use of ratios of retail space per capita consistent with the Metro Vancouver average. However, the consultant believes that New Westminster evidences certain characteristics that render this approach unsuitable for the Downtown, not only because of the Regional Centre designation, but also because of the heritage qualities of the Downtown, the public transportation/SkyTrain access, and the concentration of population, institutional, educational, and other commercial
38
space in the area. For these reasons, a simple ratio approach to determining projected retail supply is inadequate for Downtown New Westminster. Also, as important as the number crunching analysis may be, in the real of developing successful, regionally-oriented commercial precincts, there are many other variables that will determine whether a project enjoys, on a sustainable basis, high or low levels of attraction and investment. In arriving at objectivelyconceived market shares, it is necessary to consider a number of important siterelated planning and design variables. The extent to which an area-wide concept fully exploits the positive aspects of these variables, particularly in concert with one another, will determine, to a greater extent than not, whether the area achieves relatively high or low market shares. While none of these variables are expected to be resolved immediately, they do go to some length in determining not only the scale of retail facilities that might be warranted but equally importantly, the annual average per square foot productivity of such space and the attendant rents that can be expected to be achieved. Some of these important variables will be discussed in greater depth later in this report, but are worthy of noting in the context of market share determination, and include:

Traffic generators these may be in the form of unique merchandising clusters, culture and entertainment facilities, etc. Leveraging the areas capacity, particularly for creating a dominant, regionally-oriented retailing experience. This may include, as discussed previously, serious consideration to either closing certain portions of streets and or bridging certain portions of streets with plazas and the like. Insuring optimum internal and external connectivity. Physical connectivity. Creating optimum synergy amongst various area-wide existing and planned developments. Plaza 88 exemplifies this sort of internal creativity, but is too limited. The location and availability of weather-protected connectivity between existing and planned buildings, in relation to retail facilities, at different grades when appropriate. Leveraging property assemblages to create larger palates on which the best use mix can be developed. Create a more attractive pedestrian circulation program, especially in light of the steep grade changes in the Downtown area. Place-making becoming of increasing importance particularly in terms of creating a regional-like destination complex. Indeed, if done properly, the area could become a regional focal point not unlike Metrotown or
39
Lonsdale. Different sections could be animated and include public art, entertainment features, buskers, etc.
Merchandising themes and retail clusters (e.g. childrens only, food emporium, recreation/athletic/leisure, entertainment/culture, etc.)
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5.0 OFFICE MARKET ANALYSIS

This section is chiefly concerned with weighing the study areas office supply and demand factors against one another, so as to determine the warranted amount of office space for the subject area of Downtown New Westminster. The analysis will include an assessment of the role of the Downtown in attracting office uses, and its competitive advantages in relation to other business centres in the region. This analysis will build on the findings of the draft New Westminster Urban Development Forecast - 2007 to 2041 Part 2: Commercial, Industrial and Institutional Forecasts prepared in November 2008. This is both in order to generate a finer level of detail as concerns Downtown office space requirements, as well as to examine alternate methodologies so as to provide the greatest insight into the nature of the office space market in the study area.
5.1
OFFICE SUPPLY
This is a detailed quantitative and qualitative analysis of existing and proposed retail and commercial supply. Of importance is to see whether there is a perceived over or under supply of different types of these activities within the study area over the study period. There is a variety of broad types of office space types:
Professional arts space: This is space occupied by professionals and other service providers that cater to the everyday needs of nearby residents, including doctors, dentists, lawyers, accountants, travel agents, real estate agents, and so on. This space is typically located on upper floors on neighbourhood shopping streets, in retail plazas, or in communityoriented shopping locations. This also includes space occupied by office users serving a broader customer base, for instance a larger or more specialized version of the local-serving office space tenants, and patrons might be expected to travel farther to patronize these services (e.g. a medical specialist instead of a general practitioner). In most cases, these users space requirements are virtually identical to local-serving professional arts space and exhibit roughly similar market characteristics. Office space: This is space serving clients across the region, province or beyond, and includes, for instance, corporate offices or back-office functions. These types of office users typically locate in Downtown
41
Vancouver, in business park locations, or in Regional Centre and Town Centre locations.
Institutional Space: This type of space is somewhat harder to quantify, because certain institutional uses require purpose-built space (such as an art gallery or fire-hall), whereas other institutions exhibit more generic office-space characteristics (such as City Hall or a local public health clinic).
Throughout the central suburban region of Metro Vancouver, the overwhelming majority of office availability can be found in Burnabys business parks and the Metrotown area, although a considerable amount of space can be found in New Westminsters Downtown and, increasingly, north Surrey. Comparatively, Coquitlam has a much more limited supply of office space, almost all of which is of a professional arts orientation with a very local clientele, as opposed to corporate office space that might exhibit more regional characteristics. An inventory of the regional office space also includes substantial amounts of business park and office park and as such, encompasses space that can be utilized for office purposes, warehouse/light industrial purposes, or both. Consequently, the total inventory of vacant space is overestimated and may be best thought of as business park space, of the type most typically found in the suburban areas of Metro Vancouver. Therefore, a significant amount of the study areas office space is deemed to be of a non-competitive nature, owing to its business park (and somewhat more light industrial-like) character, as compared to the professional arts and typical office uses that would be attracted to Downtown New Westminster. By far, Burnaby represents the largest supply of space in the study area. However, it should be kept in mind that Burnaby maintains the largest amount of office space by virtue of the explosion in business and office parks within the municipality in recent years, as they try to accommodate the growing number of businesses that either cannot find suitable or affordable space in a downtown location, or whose businesses are not readily suited to a downtown location. The vast majority of office space in New Westminster is of an older stock, with very little having been built new in the past two decades and several structures dating back to the turn of the 20th century. That said, a substantial amount of the local stock of office space was renovated in the 1990s or more recently.
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5.2
OFFICE DEMAND
This is an assessment of office market opportunities, derived primarily from a forecast of population growth and increases in the share of the Metro Vancouver office market captured by suburban locations. Additionally, in view of the uncertainty in the market and economic environment, a sensitivity analysis will be employed in order to account for a range of likely market shares that the proposed project might be able to capture. Table 12 compares office property market statistics of the suburban inventory versus the Metro Vancouver area as a whole, as was compiled by Colliers International. It should be noted, that Colliers employs its own office supply criteria, tracking their own supply inventory. As such, office inventory statistics are not directly comparable to the supply statistics compiled by the consultant, although broad generalizations can be made. The suburban office inventory includes Burnaby, Richmond, New Westminster, Surrey, and the North Shore. Of particular importance is the supply of suburban office space, as a share of the total Metro Vancouver supply. As is shown in the graph on Table 12, the suburban office market has grown to represent almost 41% of the total metro area office supply, up from 38.7% in 1999. Forecasts project this trend to continue, largely due to the problems tenants have finding large enough spaces to accommodate their operations in or near Downtown Vancouver. The result has been the proliferation of office parks, particularly in areas of Burnaby and Surrey, which aim to house those larger sized tenants. Combined with an easterly shifting population concentration and a trend of increasing preference for working near ones residence, in addition to the incentives of lower costs vis--vis Downtown Vancouver, and the overall result is a growing demand for office space in the eastern communities of the Metro Vancouver area. This trend serves as a further supporting factor for existence of relatively stable and growing demand for suitable office space in new developments throughout the eastern municipalities, including New Westminster. This demand analysis will utilize two methods to assess the level of on-site office demand at the subject site: 1. Projecting suburban office inventory based on past growth 2. Projecting office space requirements based on population growth within the study area.
43
TABLE 12
GREATER VANCOUVER OFFICE MARKET
OFFICE PROPERTY MARKET STATISTICS
Suburban (sq. ft.) Office Inventory Vacant Space Net New Supply
1999 16,779,800 1,379,333 973,100 5.8% 754,967 8.2%
2000 17,260,900 1,076,332 833,600 4.8% 1,243,724 6.2%
2001 18,181,631 1,709,073 920,731 5.1% 287,236 9.4%
2002 18,621,235 2,326,361 439,604 2.4% -127,521 12.5%
2003 19,492,235 3,063,041 871,000 4.5% 134,320 15.7%
2004 20,654,030 2,820,862 1,161,795 5.6% 1,403,974 13.7%
2005 20,658,189 1,879,895 4,159 0.0% 810,155 9.1%
2006 20,664,192 1,887,812 5,081 0.0% 175,000 9.1%
2007 20,670,195 1,679,288 6,003 0.0% 214,940 8.1%
2008 21,349,872 1,587,956 685,680 3.2% 348,375 7.4%
Average 19,433,228 1,940,995 590,075 3.1% 524,517 9.9%
Net New Supply % Net Absorption Vacancy Rate
Greater Vancouver (sq. ft.) Office Inventory Vacant Space Net New Supply Net Absorption Vacancy Rate
1999 43,315,345 3,123,405 1,049,100 932,445 7.2%
2000 44,117,445 1,747,030 1,154,600 2,640,645 4.0%
2001 45,621,176 4,185,664 1,503,731 -667,377 9.2%
2002 46,995,545 6,230,692 1,374,369 -70,032 13.3%
2003 48,185,045 6,888,015 1,189,500 532,177 14.3%
2004 51,098,814 5,808,362 2,913,769 3,993,422 11.4%
2005 50,958,456 3,879,795 -140,358 1,783,228 7.6%
2006 51,295,700 3,354,257 337,244 592,002 6.6%
2007 51,260,447 2,490,540 -35,253 214,940 4.9%
2008 52,193,332 2,398,483 897,632 348,375 4.6%
Average 48,504,131 4,010,624 1,024,433 1,029,983 8.3%
1999 Suburban Share of GVRD Office Market, % 38.7%
2000 39.1%
2001 39.9%
2002 39.6%
2003 40.5%
2004 40.4%
2005 40.5%
2006 40.3%
2007 40.3%
2008 40.9%
Average 40.0%
Suburban Share of GVRD Office Market

42%
41%
40%
39%
38% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Suburban Share of GVRD Office Market, %
Notes:
1
Includes Burnaby, Tri-Cities, Richmond, New Westminsiter, North Shore and Surrey, excluding Downtown Vancouver and the Broadway Corridor.
Sources: Colliers International Office Market Reports, to Q42008 Urbanics Consultants Ltd.
44
5.3
OFFICE INVENTORY PROJECTION METHOD
Table 13 outlines the projected amount of suburban office supply, based on the historical growth in supply over the last five years, utilizing Colliers Internationals suburban office inventory, as was presented in Table 12. As shown, the growth in suburban office space in the first five years of the forecast period reflects a lower rate than the historical growth of suburban office space, largely as a result of economic uncertainty for the remainder of the 2006-2011 period. After 2011, however, the consultant expects that the suburban office supply is expected to return towards the five year average annual growth rate of roughly 3.0% per year under the base case scenario. This results in almost 2.2 million sq.ft. in the suburban area over the 2006-2011 period, and a further 3 million and 4.1 million square feet in the following two five-year forecast periods, respectively. To determine the study areas share of new office supply, the consultant has applied a study area market share to the annual growth in office supply, based on the historical size of the New Westminster office space inventory as a percentage of the suburban market. This has recently been around 7.3% of the total. However, to reflect the very strong growth of business park and office development in Surrey, and to a lesser extent, Langley, the share is expected to be slowly eroded over time as these cities garner a larger share of the suburban office market share over the study period. Accordingly, the consultant expects that the share of the office market captured by New Westminster would diminish over time, to 6.6% by 2026. This results in a projected demand of 100,000 square feet in incremental office space between 2006 and 2011, rising to almost 140,000 square feet for the 2011-2016 period, and to over 210,000 square feet in the 2021-2026 period. Given that Downtown New Westminster is the most likely destination for much of this space (the remainder being largely in Sapperton, and to a lesser extent, Uptown and Queensborough), the consultant believes that a share of two-thirds of the total is warranted for the Downtown. Based on this somewhat conservative market share as employed in the medium scenario, the Downtown would be expected to warrant an incremental 100,000 square feet in the first five years of the projection period, followed by 137,000 additional square feet the following five years, and a further 182,000 and 211,000 square feet in the next five-year projection periods, respectively. This results in a cumulative growth of almost 630,000 square feet of office space Downtown over the 2006-2026 period.
45
TABLE 13
DOWNTOWN NEW WESTMINSTER
OFFICE MARKET DEMAND FORECASTS - OFFICE INVENTORY PROJECTION METHOD
Historical 2001 Suburban Office Inventory (sq. ft.) 1 18,181,631 3.0% 3.0% 3.0% 20,664,192 20,664,192 20,664,192 2,482,561 2,482,561 2,482,561 7.3%
5
Projected 2006 20,664,192 1.0% 2.0% 2.5% 21,718,000 22,815,000 23,380,000 1,054,000 2,151,000 2,716,000 7.0% 74,000 151,000 190,000 67% 50,000 101,000 127,000 50,000 101,000 127,000 2.0% 2.5% 3.0% 23,978,000 25,813,000 27,104,000 2,260,000 2,998,000 3,724,000 6.8% 154,000 204,000 253,000 67% 103,000 137,000 170,000 153,000 238,000 297,000 2.0% 3.0% 3.5% 26,474,000 29,924,000 32,191,000 2,496,000 4,111,000 5,087,000 6.6% 165,000 271,000 336,000 67% 111,000 182,000 225,000 264,000 420,000 522,000 2011 2016 2021
2026
Avg. Annual Growth Rate (2) - Low Scenario Avg. Annual Growth Rate (2) - Medium Scenario Avg. Annual Growth Rate (2) - High Scenario Projected Office Supply (sq. ft.) - Low Scenario Projected Office Supply (sq. ft.) 3 - Medium Scenario Projected Office Supply (sq. ft.) - High Scenario New Office Supply (sq. ft.) - Low Scenario New Office Supply (sq. ft.) 3 - Medium Scenario New Office Supply (sq. ft.) 3 - High Scenario New Westminster Market Share New West Potential New Demand (sq. ft.) - Low Scenario New West Potential New Demand (sq. ft.)5 - Medium Scenario New West Potential New Demand (sq. ft.)5 - High Scenario Downtown Share of Total New Westminster Market 6 Warranted New Downtown Office Space (sq. ft.) - Low Scenario Warranted New Downtown Office Space (sq. ft.) - Medium Scenario Warranted New Downtown Office Space (sq. ft.) - High Scenario Cumulative New Downtown Office Space (sq. ft.) - Low Scenario Cumulative New Downtown Office Space (sq. ft.) - Medium Scenario Cumulative New Downtown Office Space (sq. ft.) - High Scenario
4 3 3 3
2.0%
3.0%
3.5%
29,229,000
34,690,000
38,233,000
2,755,000
4,766,000
6,042,000
182,000
315,000
399,000
67%
122,000 211,000 267,000
386,000 631,000 789,000
Notes:
1
GVRD less the City of Vancouver (Downtown Vancouver and Broadway Corridor) - Source: Colliers International Office Market Reports
2 Average suburban office growth rate expected to slow for the five-year period from 2006-2011, but under Medium Growth Scenario would return to long-run growth rate of around 3.0% for the remainder of the study period. Low and High Growth Scenarios are adjusted downwards and upwards, respectively. 3
Projections from 2006-2011 forward reflect shortage of supply in short term, returning to historical 5 year average annual growth rate in supply over long term.
4 Market share derived from historical share of suburban office market occupied by New Westminster (approx. 1,500,000 sq.ft., or 7.3% of the total in 2006), with the projected market share adjusted downward over time to reflect the increasing capture of office market demand by Surrey - particularly the City Centre area. 5 6
Reflects estimated study area share (demand) of Suburban market office space growth, but does not reflect regional constraints for office land. Reflects consultant's estimate of probable share of new office space Downtown vs. Queensborough and other non-Downtown Mainland, e.g. Sapperton.
46
6.6%
5.4
OFFICE SPACE PER CAPITA PROJECTION METHOD
As an alternate means of testing the projected level of office demand over time, a methodology reliant on per capita projection can also be used, the results of which will help to refine the consultants overall projections. As is shown in Table 14, an office space per capita ratio is applied to the study areas incremental growth in population. Based on the study areas population growth, the consultant will be able to estimate the approximate amount of office space that is warranted for the area, such that the historical relationship between suburban population and office inventory will be maintained. The nine-year historical office space per capita ratio is calculated to be 14 feet per capita. In keeping with the historic growth in this ratio, it is forecast to continue to increase by 2% per annum, as it has over the last seven years. This increase also highlights the growing importance of the suburban office inventory within Metro Vancouver, as more and more businesses and employees chose to commute to suburban municipalities for work as opposed to Downtown Vancouver. As was projected in Figure 1, the study areas population is estimated to increase by an average of between 9,000 and 10,000 people per year, although annual incremental growth will wane slightly in the latter years of the study period. Based on the office space per capita ratio, this population growth translates into a warranted incremental office space demand of over 750,000 sq. ft. between 2006 and 2011. By 2016, incremental office space demand will reach over 850,000 sq. ft. for the five-year period, rising to over 1,000,000 sq. ft. for the 2021-2026 period. Employing a market share of 15% for Downtown New Westminster as a share of all suburban office space in the study area (that is, the study area not including Richmond, North Shore, or Langley), the amount of on-site office space demand can be determined. As is shown in the table according to the medium scenario, an average of 20,000 to 25,000 square feet of office space will be warranted every year, rising to the high end of that range toward the end of the study period. Note that the market share employed here is larger than the share used in the earlier analysis on account of the smaller amount of competitive space in this study area (that is, by not including Richmond or the North Shore, New Westminster accounts for a larger proportion than when compared to the entire suburban office stock.) This translates into a cumulative demand for almost 375,000 square feet of new office space in Downtown New Westminster by 2021 and 530,000 by the end of the study period in 2026.
47
TABLE 14
OFFICE MARKET DEMAND FORECASTS - OFFICE SPACE PER CAPITA PROJECTION METHOD
Historical 2001 Study Area Population 598,000 Incremental Population Growth Office Space (sq. ft.) per Capita Ratio - Low Scenario 2 Office Space (sq. ft.) per Capita Ratio - Medium Scenario Office Space (sq. ft.) per Capita Ratio - High Scenario New Office Demand per Period (sq. ft.) - Low Scenario 3 New Office Demand per Period (sq. ft.) - Medium Scenario New Office Demand per Period (sq. ft.) - High Scenario Downtown New West Market Share
4 3 3 2 2
Projected 2006 2011 680,000 2016 730,000 2021 777,000
2026
631,000 33,000 14.0 14.0 14.0 462,000 462,000 462,000
827,000 49,000 15.0 15.5 16.0 735,000 757,399 784,000 15% 110,000 114,000 118,000 114,000 50,000 15.8 17.1 18.1 788,258 853,296 905,127 15% 118,000 128,000 136,000 242,000 47,000 16.6 18.8 20.5 778,759 885,581 962,624 15% 117,000 133,000 144,000 375,000
50,000
17.4
20.8
23.2
870,727
1,040,163
15%
Warranted New Downtown Office Space (sq. ft.) - Low Scenario Warranted New Downtown Office Space (sq. ft.) - Medium Scenario Warranted New Downtown Office Space (sq. ft.) - High Scenario Cumulative Site Office Space (sq. ft.)
131,000 156,000 174,000
531,000
Notes:
1 Reflects a study area of Burnaby, New Westminster, Whalley/Guildford, and portions of Coquitlam. 2 Office Space per Capita ratio is derived from the seven year historic trend between suburban GVRD population (less Vancouver) and suburban office space inventory, assumed to continue increasing by the historical rate of 2% per annum. Reflects estimated municipal share (demand) of Suburban market office space growth, but does not reflect municipal constraints for office land. 3 4
Reflects consultant's estimate of demand for office space within the office space study area.
Sources: GVRD, BC Statistics Urbanics Consultants Ltd.
48
1,158,639
5.5
WARRANTED OFFICE SPACE
The first projection methodology, the office inventory projection method, indicates that there should be demand for over 100,000 square feet of incremental office space for Downtown New Westminster as compared to 2006, or approximately 20,000 square feet of incremental office space demand per year. This figure is anticipated to rise over the course of the study period, resulting in a cumulative new demand of around 630,000 square feet of new office space by 2026. The second projection methodology, the office space per capita projection method, indicates that there should be demand for over 110,000 square feet of incremental office space for Downtown New Westminster as compared to 2006, or approximately 22,000 square feet of incremental office space demand per year. This figure is anticipated to rise over the course of the study period, resulting in a cumulative new demand of around 530,000 square feet of new office space by 2026. An average of the medium scenarios in these two methodologies indicates that, between now and 2026, there should be warranted demand for approximately 580,000 square feet of new office space in the Downtown. Although the second methodology produces a slightly more conservative absorption schedule, the two demand analyses coincide fairly closely, and as a whole indicate that there is considerable potential for an expansion of the office supply in Downtown New Westminster. In all instances of office demand forecasting, it should be noted that office space can be quite lumpy in terms of the nature and volume in which it comes to market, and does not typically get built and absorbed according to the smooth stream that might be understood from the forecasts presented herein. However, over the course of the study period, the net overall absorption would be anticipated to be consistent with the findings indicated in this study.
49
TABLE 15
OFFICE MARKET DEMAND FORECASTS - SUMMARY
2011 INVENTORY PROJECTION METHOD Warranted New Downtown Office Space (sq. ft.) - Low Scenario Warranted New Downtown Office Space (sq. ft.) - Medium Scenario Warranted New Downtown Office Space (sq. ft.) - High Scenario Cumulative New Downtown Office Space (sq. ft.) - Low Scenario Cumulative New Downtown Office Space (sq. ft.) - Medium Scenario Cumulative New Downtown Office Space (sq. ft.) - High Scenario
2016
2021
2026
50,000 101,000 127,000 50,000 101,000 127,000
103,000 137,000 170,000 153,000 238,000 297,000
111,000 182,000 225,000 264,000 420,000 522,000
122,000 211,000 267,000 386,000 631,000 789,000
PER CAPITA PROJECTION METHOD Warranted New Downtown Office Space (sq. ft.) - Low Scenario Warranted New Downtown Office Space (sq. ft.) - Medium Scenario Warranted New Downtown Office Space (sq. ft.) - High Scenario Cumulative New Downtown Office Space (sq. ft.) - Low Scenario Cumulative New Downtown Office Space (sq. ft.) - Medium Scenario Cumulative New Downtown Office Space (sq. ft.) - High Scenario
110,000 114,000 118,000 110,000 114,000 118,000
118,000 128,000 136,000 228,000 242,000 254,000
117,000 133,000 144,000 345,000 375,000 398,000
131,000 156,000 174,000 476,000 531,000 572,000
AVERAGE OF BOTH METHODS Warranted New Downtown Office Space (sq. ft.) - Low Scenario Warranted New Downtown Office Space (sq. ft.) - Medium Scenario Warranted New Downtown Office Space (sq. ft.) - High Scenario Cumulative New Downtown Office Space (sq. ft.) - Low Scenario Cumulative New Downtown Office Space (sq. ft.) - Medium Scenario Cumulative New Downtown Office Space (sq. ft.) - High Scenario
80,000 107,500 122,500 80,000 107,500 122,500
110,500 132,500 153,000 190,500 240,000 275,500
114,000 157,500 184,500 304,500 397,500 460,000
126,500 183,500 220,500 431,000 581,000 680,500
50
6.0 HOTEL MARKET ANALYSIS

The following section explores the supply and demand side influences as they exist in the study area, with the ultimate goal of rationalizing the amount of hotel space (in terms of the number of rooms) that might potentially be warranted for Downtown New Westminster. The following section provides a review of existing accommodation properties throughout the study area that would be competitive with any new hotel in Downtown New Westminster, including discussion of:
Current hotel capacities (specifically excluding very low-quality hotel/social housing stock, which is non-competitive with any potential new hotel project in the downtown) Amenities offered, especially as regards conference facilities Approximate overnight rates and perceived market orientation Other considerations
Particular attention will be given to identifying underserved market segments in the suburban area, which will form the basis for further discussion of the potential for new accommodation space in New Westminster.
6.1
STUDY AREA DELINEATION
Given Vancouvers size and national significance, the city has a fairly large stock of accommodation. However, a very substantial portion of that stock is located in Downtown Vancouver or near the Vancouver International Airport, with a much smaller supply in the outlying suburban areas. The study area being examined comprises the cities of Burnaby and New Westminster, a southern portion of the city of Coquitlam, as well as a northern portion of Surrey (roughly comprising the Whalley and Guildford areas). This study area has been chosen because it is felt to represent the majority of likely competitive influence in the accommodation market, largely as a result of reasonably close proximity to, as well as easy accessibility to and from, the city of New Westminster, in addition to the considerable distance from both the international airport and Downtown Vancouver, which serve a very different segment of the accommodation market. A map of this trading area can be found in Figure 1, along with an approximate population forecast to 2026.
51
FIGURE 1
HOTEL AND OFFICE STUDY AREA DELINEATION
Note: These projections assume that the downtown's proportion of the total population is consistent with the base case.
Hotel & Office Study Area Study Area Population(1) Annual Growth Rate
(1)
1996 551,000 -
Historical 2001 598,000 1.7%
2006 631,000 1.1%
2011 680,000 1.5%
Projected 2016 2021 730,000 1.4% 777,000 1.3%
2026
827,000 1.3%
Historical and projected population figures derived from aggregating three health regions encompassing the study area (Burnaby, New Westminster, and Coquitlam), as calculated by B.C. Stats P.E.O.P.L.E. 33 population projections, as well as the City of Surrey's population projections for Guildford and Whalley.
52
6.2
HOTEL SUPPLY ANALYSIS
This is a quantitative and qualitative analysis of accommodation supply in the study area. Of importance is to see whether there is a perceived over or under supply of different types of these activities within the study area over the study period, and to what extent that may or may not indicate a market opportunity for further hospitality space in Downtown New Westminster. The consultant has completed a review of the hotel study areas accommodation supply. Figure 2 displays the relative location of each competing hotel within the study area. What is immediately noticeable is the obvious concentration of accommodation along key transportation corridors such as Lougheed Highway and the Trans-Canada Highway in Coquitlam and Burnaby and Kingsway in south Burnaby. In New Westminster, hotel accommodation is chiefly located along the waterfront district, while the supply in north Surrey is largely confined to the City Centre and Guildford Town Centre areas. The competitive locator numbers coincide with the supply inventory as shown in Table 16. The hotel/accommodation supply inventory compares the relative size, age, rates, amenities and market position of each of the hotels found within the study area. It should be noted that all efforts were made to determine the total supply of hotel establishments in the area. The count does not include bed and breakfast type accommodations, or other quasi-hotel establishments (such as establishments classified as social housing). As is shown, the total room inventory in the study area is currently estimated to be just over 2,200, of which about 170 are in New Westminster. This represents about 8% of the area stock. The average nightly room rate is around $100, while New Westminsters stock charges an average of 5% lower than the remainder of the area. It should be noted, though, that these averages are dragged down by a multitude of standard and economy rooms throughout the trade area, many of which are legacy properties built over the past several decades. Moreover, what little hotel room expansion has occurred in the study area over the last 10 years has happened almost exclusively in Burnaby, particularly around Metrotown with the construction of 100 rooms at the Metrotown Holiday Inn and 283 rooms at the Hilton Vancouver Metrotown over the ten to fifteen years. With the exception of these two hotels, the majority of the inventory is ten or more years old, with several hotels being 20 years old or more. In fact, a review of development activities reveals that the current supply of hotel rooms in the study area is expected to remain relatively unchanged over the medium term.
53
FIGURE 2
STUDY AREA - HOTEL SUPPLY INVENTORY
6 7
10
2 5 1 3 13 8 9 12
14 16 15
18
20
22
19
21
Urbanics Consultants
54
TABLE 16
STUDY AREA HOTEL SUPPLY INVENTORY
NEW WESTMINSTER, BURNABY, SOUTH COQUITLAM, NORTH SURREY
Locator # and Municipality

COQUITLAM 1
Hotel Name
Hotel Brand
Address
Number Starting of Rooms Nightly Rate
Max. Market Position Conference / Quality Capacity

Economical / Standard Quality
Age
Amenities/Notes
Ramada Inn, Coquitlam Hotel
Ramada
631 Lougheed Highway, Coquitlam
84
$100
100
20+ years
Executive Plaza Coquitlam
Executive Hotels
405 North Road, Coquitlam
140
$130
550
Middle / Good Quality
8 years
Laundry Facilities, Indoor pool & whirlpool, meeting room/business centre for groups up to 100 people Tennis court, gym, sauna, restaurant, piano lounge, pub, dry cleaning, massage, shuttle/courier services, business centre/meeting rooms (9 rooms for up to 550 people)
Best Western Chelsea Inn Coquitlam Sleep Lodge Coquitlam Inn
Best Western
725 Brunette Avenue, Coquitlam 730 Clarke Road, Coquitlam 319 North Road, Coquitlam
61
$110
Economical / Standard Quality Economical / Low Quality Middle / Good Quality
10+ years (renovated Mini golf, swimming pool, hot tub, dining room, 1 year ago) laundry facilities. 20+ years Swimming pool. Swimming pool, restaurant/lounge, laundry facility, fitness facility, conference space (5,000 sq.ft. in 4 rooms for up to 250 people) Meeting room/business centre, dry cleaning, fitness facility, swimming pool, conference facilities (around 8,000 sq.ft. in multiple rooms for up to 375 people) Hot tub, sauna, fitness centre, restaurant, mini golf, tennis court, meeting rooms/business centre (for up to 100 people) Laundry/drycleaning, florist, currency exchange, gift shop, newstand, meeting room/business centre, outdoor pool, fitness centre, tennis court, conference facilities (9 rooms with 5,400 sq.ft. for up to 180 people)
independent
39
$70
5 BURNABY 6
Best Western
106
$80
250
20+ years
Executive Hotel Burnaby Accent Inns Burnaby Holiday Inn Express Vancouver Metrotown Best Western Kings Inn and Conference Centre
Executive Hotels
4201 Lougheed Highway, Burnaby 377 Henning Drive, Burnaby
125
$125
375
Upper - Middle / High Quality Middle / Standard Quality
10+ years
Accent Inns
128
$140
100
10 years
Holiday Inn
4405 Central Boulevard, Burnaby
100
$130
180
Middle / Standard Quality
5+ years
Best Western
5411 Kingsway, Burnaby
138
$135
$100
Middle / Standard Quality
20 + years (recently Swimming pool, restaurant/lounge, laundry renovated, but no facility, car rental desk, fitness facility, meeting new rooms) room/business centre (up to 100 people) Swimming pool, fitness centre, dry cleaning, tennis courts and meeting room/business centre, full casino/entertainment centre, restaurant, convention/ballroom space and sports bar. Limited on-site facilities beyond laundry. Wireless internet, fitness facility, sauna, tennis court, business centre Dry cleaning, meeting room/business centre, tennis court, mini golf, swimming pool, fitness facility, banquet and conference facility (over 14,000 sq.ft in as many as 11 rooms, with maximum capacity of 900 people)
10
Radisson Hotel Burnaby Grandview Motel & Trailer Park Happy Day Inn
Radisson Hotels
4331 Dominion Street, Burnaby 4825 Canada Way, Burnaby 7330 6th Street, Burnaby
200
$120 (subject to change)
Middle / Standard Quality Economical / Low Quality Economical / Standard Quality
20 + years
11 12
independent independent
31 32
$195 / week $75
20+ years 10+ years
13
Hilton Vancouver Metrotown
Hilton
6083 Mckay Avenue, Burnaby
283
$155
900
Upper - Middle / High Quality
8 years
NEW WESTMINSTER 14 Corporate Inn independent 379 12th Street, New Westminster 900 Quayside Drive, New Westminster 411 Columbia Street, New Westminster 20 $70 Economical / Standard Quality Middle / Good Quality Economical / Standard Quality 8 years Restaurant, laundry. Barber/beauty shop, newstand, drugstore, swimming pool, jacuzzi, business centre, health club, disco, restaurant/lounge, florist, conference facilities (3,500 sq.ft. in up to five rooms, maximum capacity 200 people) Laundry/Dry Cleaning, ATM/Bank, business centre.
15
Inn at Westminster Quay
independent
126
$120
200
16 years
16 SURREY 18
The Met Hotel
independent
26
$100
100+ years
Sheraton Vancouver Guildford Hotel
Sheraton
15269 104th Avenue, Surrey
279
$90
450
Upper - Middle / High Quality
Swimming pool, hot tube, fitness centre, 20 + years (recently restaurant, conference centre (26,000 sq.ft. of renovated, but no meeting space in up to 18 different rooms, with a new rooms) max capacity of 450) 10+ years Spa, restaurant, wine shop, lounge, exercise facility, jacuzzi, banquet/meeting space of 11,000 sq.ft. and a max capacity of 600 people) Swimming pool, hot tube, fitness centre, etc. Restaurant, laundry. Swimming pool, hot tube, fitness centre, kitchen, restaurant.
19
Compass Point Inn Surrey Ramada Hotel and Suites Surrey Guildford Super 8 Motel, Surrey Best Western King George Inn & Suites
independent
9850 King George Highway, Surrey 10410 - 158th Street, Surrey 13893 Fraser Highway, Surrey 8033 King George Highway
81
$90
600
Middle / Good Quality Economical / Standard Quality Economical / Low Quality Middle/Standard Quality
20 21 22
Ramada Super 8 Best Western
77 56 72 Room Inventory:
$80 $60 $90 Average Nightly Rate:
Conference Capacity:
20 + years 20 + years 15+ years
TOTAL STUDY AREA TOTAL NEW WESTMINSTER NEW WESTMINSTER AS % OF TOTAL
2,204 172 8%
$103 $97 94%
3,805 200 5%
Sources: Hotel Canada Reservation Engine, Expedia.ca, B.C. Tourism, Urbanics Consultants Ltd. Notes: Accomodation inventory does not include bed and breakfast establishments.
55
The other significant observation that can be made from the compiled hotel inventory is the relative overrepresentation of economical/standard quality marketed accommodations within the study area. The consultant has estimated the relative market position of the hotels examined, in an effort to identify potential market niches that are currently going underserved. Although chiefly a qualitative analysis, the inventory indicates that the vast majority of accommodation in the area is of standard quality, marketed to the economical traveler. With the exception of the Hilton Vancouver in Metrotown, the Burnaby Radisson, and the Guildford Sheraton, there is very little in the way of higher-end accommodation offerings in the area. While this presents itself as a potential market niche that might be filled through a new hotel in Downtown New Westminster, it should be cautioned that such high quality chains are best reserved for destination locations which offer unique experiences (i.e. Downtown Vancouver, ski resorts, recreational retreat environments) and as such, may not be supported very strongly in the study area. Beyond this, the accommodation industry is entering a period of uncertainty as domestic and international tourism are highly vulnerable to the foreseeable futures economic gyrations. In summary, the supply analysis demonstrates that relatively little supply in the suburban area has come to market over the last 10 years, despite strong population growth throughout the study area. Furthermore, very little new hotel supply has been proposed for the study area. These supply side factors will assist in the derivation of estimated hotel demand in the study area and for the subject site, as will be examined next.
56
6.3
HOTEL DEMAND ANALYSIS
This is an assessment of hospitality opportunities, derived primarily from a forecast of population growth and real increases in per capita expenditures. Additionally, in view of the uncertainty in the market and economic environment, a sensitivity analysis will be employed in order to account for a range of likely market shares that the proposed project might be able to capture. The following section serves to focus the projects target market on several key cohorts, analyzing the characteristics of each market segment in an effort to determine future levels of on-site room-night demand. Using the population forecasts for the study area, as obtained by BC Stats, in addition to the hotel inventory count as was just outlined, the consultant has forecast the warranted demand for hotel accommodation, in terms of number of rooms, over the course of the study period extending to the year 2026. Table 17 compares historical population to the relative hotel room supply in the area, shown as the approximate number of hotel rooms during each census year, based on the estimated age of each hotel. By comparing census population figures to the hotel count, a ratio between the number of people per hotel room can be derived. The 1991 census year has been excluded from the derivation of the ratio, as it is deemed to be an outlier or year of considerable undersupply (not representative of the more recent general trend). As is shown, the average number of people per hotel room over the past ten years was determined to be around 290 people per room. The consultants considered opinion is that, over the course of the study period, that ratio will continue to diminish, given the growing importance of the municipalities in the study area as increasingly important regional centres. In later years of the forecast, the incremental hotel room demand for the study area will average just over 45 units per year, based on the projected population growth in the area. Although a conservative methodology, the analysis indicates a warranted demand for approximately 900 new hotel rooms in the study area, over the course of the study period. Based on the supply analysis and number of proposed hotel developments in the area, the consultant has estimated a site market share for Downtown New Westminster, to determine the amount of warranted study area supply that can be realistically attracted to the subject site according to three scenarios of attraction. As is shown, market shares are estimated quite conservatively, owing to the smaller size of both the population and employment base in New Westminster as compared to Burnaby or Surrey.
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TABLE 17
DOWNTOWN NEW WESTMINSTER HOTEL DEMAND FORECAST
Historical 2001
598,476 2,212 271
Projected 2006
630,820 2,204 286 2,204 280 2,428 224 10% 20% 30% 22 45 67 22 45 67 275 2,655 227 10% 20% 30% 23 45 68 45 90 135
1996
Study Area Population 550,733
(2) (1)
2011
679,770
2016
730,159
2021
2026
777,022
826,893
Study Area Hotel Room Supply 1,650 334 Study Area Ratio of Rooms to People Warranted Projected Hotel Room Demand Incremental Hotel Room Demand (from 2011 forward) New Westminster Market Share - Low Scenario (4) New Westminster Market Share - Medium Scenario New Westminster Market Share - High Scenario Warranted New Westminster Hotel Room Demand - Low Warranted New Westminster Hotel Room Demand - Medium Warranted New Westminster Hotel Room Demand - High Cumulative New Westminster Hotel Room Demand - Low Cumulative New Westminster Hotel Room Demand - Medium Cumulative New Westminster Hotel Room Demand - High
(4) (4)
270
265
2,878
3,120
223
242
10%
10%
30%
30%
22 45 67
24 48 73
67 135 202
92 183 275
Sources: Urbanics Consultants Ltd. Notes:

(1)
Historical and projected population figures derived from aggregating three health regions encompassing the study area (Burnaby, New Westminster, and Coquitlam), as performed by B.C. Stats P.E.O.P.L.E. 33 population projections, and the City of Surrey's population projections for Guildford and Whalley.
(2) (3) (4)
Hotel supply inventory derived from previous table Site market share takes into consideration relative size of population and workforce as compared to other municipalities in the study area.
Assumes projected population-hotel ratio will decrease from 10-year historical average (approx. 290 people per room), and slowly decline further over the study period.
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20%
20%
While at first glace some of these shares appear to be overly optimistic (especially for the high attraction scenario), it should be kept in mind that presently, the consultant is aware of no concrete future plans for a major hotel development in the study area, meaning in effect, it is conceivable that up to 100% of the warranted demand might be attracted to Downtown. To remain more conservative and to account for other potential future developments, the consultant has left the market share at 20%. Based on these assumptions, by 2011 there will be an on-site warranted hotel demand of as many as 45 units under the medium scenario. Incremental demand in future years will rise by around 6 rooms per five-year period for the remainder of the study period, for a cumulative warranted room demand of 180 units by 2026. However, if the surrounding areas do not undergo any further substantial hotel developments over this period, the incremental Downtown New Westminster demand could far exceed this figure. Conversely, if the surrounding areas continue to expand their retail, office, and residential supply and Downtown New Westminster does not keep pace, the inverse would be true, and the actual demand for accommodation would be far lower than that indicated in the forecast. This analysis indicates that under the presumed medium-attraction scenario, there is likely insufficient new demand for a good quality hotel property over the next five years of the study period to support a new hotel in the Downtown. Beyond this time, however, the consultants analysis supports the potential for demand for a new hotel property in Downtown New Westminster as the anticipated cumulative warranted demand for hotel rooms approaches 90 or 100 by 2016 enough to make a hotel property much more feasible from a market perspective. It should also be noted that this is under the assumption of a medium-attraction scenario. If, however, Columbia Streets revitalization can be accelerated and a more attractive Downtown retail, restaurant, entertainment, and public amenity program can be realized, it is entirely possible that the warranted demand would accelerate much faster, as per the high-attraction scenario.
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DEMAND SUB-SEGMENTS
Overall, demand for hotels within the study area can be generally segmented into three distinct groups: 1) In-law demand, or visiting relatives to the existing population; 2) Corporate Demand, and; 3) Tourist/Visitor Demand.
In-law Demand:
The first segment, In-law demand is considered the principle supporting group for the demand analysis just carried out above. Composed of family, in-laws, and friends, this group would normally be accommodated within a primary residence, but for a variety of reasons, is accommodated in a hotel instead. According to Tourism B.C., approximately 30% of all trips taken by B.C. and Alberta residents include visiting friends or family. Contributing factors to this group include weddings, funerals, family reunions, visits and other similar events. While the population/hotel room ratio methodology employed is suitable for conservatively estimating the demand for hotel space from all three segments, it can be argued that it may focus too heavily on typical hotel demand, derived from families living in the area and may therefore underestimate the demand from the other market demand sub-segments.
Corporate Demand:
The second market demand segment, corporate demand, is composed of business travel, primarily from local or regional businesses, as well government, association, and other non-leisure functions. According to Tourism B.C., approximately 38% of all trips taken include some sort of business function, not including conventions and trade shows. Corporate demand, in particular, could represent a major growth market in the area, particularly considering the growing number of business parks and even offices nearby. Consequently, the growth in businesses within the study area is of chief importance to the support for hotel space. Table 18 shows the historical number of business incorporations since 1999. Business incorporations throughout the area have increased by an average of around 9% per year, with an overall increase of 96% over the past eight years. In that time, only two hotels have been built, both in Burnaby.
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TABLE 18
STUDY AREA BUSINESS INCORPORATIONS
1999 Burnaby Coquitlam New Westminster Surrey Total Study Area New West % of Total 992 362 254 1,328 3,607 7.0% 998 393 256 1,521 3,647 7.0% 1,021 385 253 1,455 3,660 6.9% 1,078 428 257 1,614 3,765 6.8% 1,136 426 308 1,943 3,873 8.0% 1,250 465 295 2,220 4,014 7.3% 2000 2001 2002 2003 2004 2005 1,398 580 295 2,755 4,278 6.9% 2006 1,447 596 327 3,194 4,376 7.5% 2007 1,498 618 357 3,279 4,480 8.0%
Average Annual % Change 5% 7% 4% 12% 3% -
Total % Increase 51% 71% 41% 147% 24% -
Study Area Business Incorporations, 1999-2007
5,000 4,000 3,000 2,000 1,000 1999 2000 2001 2002 2003 2004 2005 2006 2007
Surrey
New Westminster
Coquitlam
Burnaby
Source: Metro Vancouver, Business Incorporations by Municipality 1997 - 2007.
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6,000
On the whole, the study area saw business incorporations increase by an average annual rate of 3% per year. This fact demonstrates continued and growing support from the corporate segment of hotel demand, and represents an additional supporting factor for the expansion of the existing on-site hotel room count. Although New Westminster has lagged the surrounding areas (for instance, Surrey has grown at thrice the pace), the area as a whole has seen a steady expansion of the business base that will be beneficial to the accommodation market throughout the study area.
Tourist/Visitor Demand:
The last demand segment, Tourist/Visitor demand can be best analyzed by looking at historical overnight visitation numbers. Although unavailable for the separate municipalities which make up the study area, overnight visitor figures are available for the GVRD as a whole. As is shown on Table 19, total overnight visitors to the GVRD have risen since 1999 by 8%, or on average, 0.9% per year. All countries of origin, with the exception of the U.S. have seen increases in the number of visitors to the GVRD. Owing to issues of national security, combined with the rise of the Canadian Dollar against the U.S. dollar, the U.S. (traditionally the GVRDs largest foreign tourist market) has been in steady decline, particularly since 9-11. Surprisingly, the tourist group to fill this gap the most has been domestic travelers, within Canada, which have grown to represent 60% of the visitors, up from 58% in 1999. All in all, despite the downward trend in American visitors, the GVRD has begun to recover, and in fact exceed the level of overnight visitors to the region, since the decline of 2001. This recovery in tourist/visitor numbers bodes well in supporting the development of further hotel rooms within the region, particularly considering the number of visitors now far exceeds the levels achieved, pre-911. As is demonstrated in the graph on Table 19, occupancy rates have also begun to recover, growing to a current low-70s since the 61.7% low of 2003, a trend that generally shadows the growth in overnight visitors. Likewise, average daily room rates in the region have begun to improve from their low of $115 per night in 2003 to the current $130. Overall, these factors point to general increase in hotel demand, particularly over the last three years, although the future growth in tourism demand is less certain than it has been in several years.
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TABLE 19
METRO VANCOUVER
TOURISM INDICATORS
1999
2000
2001
2002
2003
2004
2005
2006
2007
Average Annual % Change
Total % Increase
% of Total (1999)
% of Total (2008)
Overnight Visitors to Metro Vancouver Canada 4,784,717 United States 2,235,746 Asia/Pacific 737,819 Europe 419,828 4,862,939 2,253,919 785,697 430,931 8,448,542 8,347,153 8,321,683 7,963,956 8,523,303 4,770,249 2,296,902 758,485 404,883 4,705,731 2,374,577 776,213 358,516 4,643,673 2,233,251 620,201 360,185 4,952,140 2,294,669 760,033 400,604 Total Overnight Visitors 8,286,220
5,044,993 2,222,935 776,486 433,258 8,604,870
5,191,253 2,169,971 768,279 433,288 130,134 8,692,925
5,373,504 2,164,873 768,913 454,439 150,796 8,912,525
1.5% -0.4% 0.5% 1.0% 4.2% 0.9%
12% -3% 4% 8% 39% 8%
58% 27% 9% 5%
60% 24% 9% 5%
Note: These projections assume that the downtown's proportion of the total population is consistent with the base case. 108,110 115,056 116,634 106,646 106,646 115,857 127,198
1% 100%
2% 100%
Hotel Occupancy Rates GVRD 67.4% 65.0% 63.3% 62.7%
61.7%
66.8%
67.4%
71.9%
73.8%
Average Occupancy (1999 - 2007):
66.7%
Hotel Average Daily Rate GVRD $121.03 $120.25 $120.57
$118.37
$114.95
$118.58
$120.81
$128.24
$130.57
Average Room Rate (1999 - 2007): $
121.49
Tourism Indicators: Overnight Visitors and Occupancy Rates

9,000,000 8,750,000 8,500,000 8,250,000 8,000,000 7,750,000 7,500,000 1999 2000 2001 2002 2003
Total Overnight Visitors
75%
70%
65%
60% 2004
Hotel Occupancy Rates
2005
2006
2007
Sources: Tourism B.C., GVRD, Urbanics Consultants Ltd.
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6.4
EXTERNAL INFLUENCES OF FUTURE DEMAND
The following external influences will contribute to or detract from demand for accommodation facilities, and include, but are not limited to: Expected economic drivers, particularly within: o Commodity-related markets, including energy and mining, and, to a lesser extent, forestry-related industries o Increased tourism as the local and regional profile expands and assumes greater international recognition (e.g. from the 2010 Olympic and Paralympic Games) Geopolitical influences, particularly: o Passport requirements and border control issues o Potential influence of future terrorist activity on cross-border travel Economic influences, especially: o Exchange rate fluctuations o Sustained low inflation and interest rates o Sustained energy and commodity prices, which have in recent years fuelled the Western economies, but which are currently jeopardized by weakening global demand and depressed prices. Although these elements are all outside of the control of any on-site hotel, they bear mentioning because various contingencies can, to some extent, be made in anticipation of these external forces.
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6.5
INTERNAL INFLUENCES OF FUTURE DEMAND
The following items will further influence the nature and degree of hospitality market capture, as influenced by:
Hotel operator o Class of operator o Strength of operators reservation system o Efforts taken by the operator to develop awareness of the property
Hotel amenities and facilities, including: o Quality of the layout of rooms (with special emphasis on maximizing views), as well as room finishings, including furniture, linens, fixtures, appliances, etc. o Conference/banquet facilities o Business facilities o In-house dining / drinking options o Exercise and/or other wellness/fitness facilities
Changes to the surrounding development program, with respect to: o The size, strength, and branding of non-hotel facilities o The appeal and eating/drinking attraction of street level shopping and
o Reducing the distance and enhancing physical linkages between the surrounding attractions, including the riverfront These internal factors, all of which can be influenced or controlled by a hospitality facilitys management, will to a fairly significant extent determine whether a hotel and/or conference centre will be successful or not. The hotels location and market orientation are not alone sufficient to ensure the hotels success.
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6.6
HOTEL CONCLUSION
The demand projections found in Table 17, supported by the above analysis, indicate that for the short term, there appears to be simply insufficient incremental demand to warrant new accommodation space in Downtown New Westminster as per the medium demand scenario. It is not until the middle and latter part of the study period that, according to the medium demand scenario, the anticipated warranted new demand for hotel rooms would be sufficient to prompt the considerable investment required for a new hotel property. That said, the high attraction scenario indicates that a hotel might be warranted earlier in the study period, with anticipated cumulative hotel room demand of around 90 rooms by 2016. This accelerated level of demand should be sufficient to prompt serious consideration for the creation and absorption of a new hotel property in the Downtown market. It should also be noted that the nature of the hotel industry has changed considerably over the past several years, with investors finding it increasingly difficult to finance new hotels in the absence of hybrid condo-hotel type arrangements. This sort of financing structure, however, is most popular in highend hotels with very particular amenity packages, a circumstance which in the foreseeable future would not be possible in New Westminster. For these reasons, the consultant does not expect that accommodation uses should be seriously considered for the Downtown as being warranted in the immediate and future, and that the potential for this land use be considered more appropriate for the next five-year study period, ideally subsequent to or concurrent with other developments in the evolution of Columbia Street into a destination people place with much more considerable allure for residents, shoppers, diners, and eventually, overnight visitors.
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7.0 CONFERENCE FACILITY ANALYSIS

This section will evaluate the potential demand for new conference facility space by examining the supply of competitive meeting and conference space in the study area. In planning for any amount of new conference space, the amount and allocation of function space, and hence the size and type of event that can be accommodated, is dependent on various characteristics, such as market size and orientation, population, hotel room supply, access, and other factors. Depending on the type of event and the needs of a particular group, hotels may compete directly with publicly operated facilities. As well, although the primary purpose of civic facilities such as arenas or community centres may not be to host conferences, in certain circumstances they may be the only such facility able to host larger functions (for instance, because of availability or price as compared to larger purpose-built spaces). That said, demand for a conference space is generally met by the following sources: Publicly owned convention/conference centres Meeting/conference facilities available hotels with 20,000-50,000 square feet of meeting space Meeting/conference facilities available in local hotels (hotels in the study area, with facilities for more than 100 attendees to meet). Public assembly facilities, such as arenas and community centres Competitive facilities are discussed below, followed by conclusions related to the subject propertys potential competitive position relative to these facilities.
7.1
CONVENTION AND MEETING SPACE SUPPLY
Publicly owned convention/conference centres
There are seven major publicly owned conference / convention centres in the province: Vancouvers recently-completed VCCEP (340,000 square feet) Vancouver Convention and Exhibition Centre (150,000 square feet) Telus Whistler Conference Centre (65,000 square feet) Victoria Conference Centre (45,000 square feet) Penticton Trade and Convention Centre (54,000 square feet)
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Nanaimos new Vancouver Island Conference Centre (38,000 square feet). Prince George Civic Centre (33,000 square feet)
Conference space in Downtown New Westminster would not be expected to compete with the first four of the above, given that their reputation is already well-established and their larger scale and higher market orientation is geared towards larger provincial, national, and international events. However, the conference centres of Penticton, Prince George, and Nanaimo, all cater to a smaller, more localized market, and are able to attract regional and provincial conferences a market in which it may be possible for New Westminster to compete.
Meeting/conference facilities available in provincial hotels
In addition to the seven publicly owned conference facilities discussed above, the subject property might compete for meeting or conference business with hotels that offer a significant amount of function space (likely greater than 20,000 square feet). As shown in the table below, eight of the eleven hotels in the province that fit this criterion are located in downtown Vancouver. The others are in Richmond, Whistler, and Kelowna. Victoria does not have any hotels with functions space exceeding 20,000 square feet (the Fairmont Empress is attached to the Victoria Convention Centre). A summary of B.C. hotel convention spaces with over 20,000 square feet of function space is provided below: Sheraton Vancouver Wall Centre (Vancouver - 48,000 sq. ft.) Westin Bayshore Resort & Marina (Vancouver - 48,000 sq. ft.) Hyatt Regency Vancouver (Vancouver - 45,000 sq. ft.) Fairmont Hotel Vancouver (Vancouver - 37,000 sq. ft.) Westin Whistler (Whistler - 34,000 sq. ft.)

Empire Landmark Hotel (Vancouver - 29,000 sq. ft.) Grand Okanagan Resort and Conference Centre (Kelowna - 30,000 sq. ft.) The Fairmont Waterfront Hotel (Vancouver - 24,000 sq. ft.) Coast Plaza Hotel & Suites at Stanley Park (Vancouver - 22,000 sq. ft.) Best Western Richmond Hotel (Richmond - 22,000 sq. ft.) Four Seasons Hotel Vancouver (Vancouver - 21,000 sq. ft.)
Downtown New Westminster might be able to compete, albeit on a fairly limited extent, with some of these hotel properties for a share of the provincial meetings, conferences, and conventions business.
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Over and above these hotels size, the above hotels all offer advantages that make them more competitive than the subject site in terms of attracting larger functions. Firstly, Vancouver (and by virtue of proximity, Richmond) enjoys not only an international reputation and a major, world-class international airport, but also a wide variety of local amenities, facilities, hotel rooms, shopping, cruises, etc. none of which could reasonably be matched in New Westminster. Kelowna also offers a more established reputation as a resort destination, as well as a year-round set of amenities including extensive lake frontage, golf, and ski facilities. Whistler is already a world-recognized resort destination with fourseason activities and a profusion of world-class hotels. Furthermore, the sheer scale of the above centres populations (excepting Whistler and Richmond) is many times larger than that of New Westminster.
Meeting/conference facilities available in local hotels
Because the study area has several hotels with conference space for more than 100 people (however, it should be noted that the quality of the hotels and the associated meeting space varies widely), the local meeting space inventory is worth noting, as follows:

Executive Plaza Coquitlam (9 rooms for up to 550 attendees) Executive Hotel Burnaby (7 rooms and 8,000 sq.ft. for up to 375 people) Coquitlam Best Western Inn (5,000 sq.ft. in 4 rooms for up to 250 people) Holiday Inn Express Burnaby (5,400 sq.ft in 9 rooms for up to 180 people) Hilton Vancouver Metrotown (over 14,000 sq.ft in as many as 11 rooms, with maximum capacity of 900 attendees, depending on format) Royal Towers (2,000 sq.ft. in up to 6 rooms, maximum capacity of 200) Inn at Westminster Quay (3,500 sq.ft. in up to 5 rooms, max. capacity 200) Sheraton Guildford (26,000 sq.ft. of meeting space in up to 18 different rooms, with a max capacity of 450) Compass Point Inn Hotel Surrey (11,000 sq.ft. of space and up to 600 people)
Public assembly facilities, such as arenas and community centres
Given the higher-quality finish and higher market orientation of any potential new conference space in Downtown New Westminster, it is hard to imagine any competitive influence resulting from public facilities such as arenas or
69
community centres, either in New Westminster or anywhere else in the area. Therefore, such facilities should not be considered as a competitive supply for the purposes of this analysis. However, it is believed that a new multi-use civic facility that is anticipated to be built in the Downtown over the next few years is intended have a certain amount of space that could be used to host smaller conference events and meetings, primarily for local associations or other non-profit uses. If the final facility indeed includes sufficient space to accommodate these and other users, then the consultants findings would have to be revised in light of this new supply in the Downtown. It should be noted that the consultant is not yet certain that this facility will be built downtown, as a number of locations would likely be examined throughout the city, including but not exclusive to the Downtown.
7.2
FACTORS IN CHOOSING A LOCATION & VENUE
The consultant has reviewed literature published by surveys of meeting planners, which indicate the factors that influence their decisions of where to host such events, and which factors influence their choice of facility within that location. Note that these are published by American event planners, so the results will vary slightly from what might be expected in a Canadian context. Tables 20 and 21 provide the relative percentage scores for location and facility, respectively, including a graphical analysis comparing each of the following three submarkets: corporate meetings, association meetings, and conventions. (For purposes of this study, association meetings are meant to encompass training/educational seminars, board meetings, professional/technical meetings, regional/local chapter meetings, and other association off-premises meetings.) Note that because of the very large size of several of the major purpose-built convention facilities and major hotels indicated above, large conventions would not likely to be a reliable source of business for any new conference space in Downtown New Westminster. However, such space might be an excellent location for smaller convention/conference type events, as well as business and association meetings that are otherwise squeezed out of downtown space because of distance, cost, or availability. For instance, the importance of unions and other trade or regional associations cannot be understated as offering considerable potential in this market. Furthermore, as Metro Vancouvers growth patterns shifts ever eastward, New Westminster will increasingly be able to capitalize on its central regional location, bolstered by favourable transportation connectivity, both in terms of private and public transportation accessibility.
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TABLE 20
TOP FACTORS IN CHOOSING A MEETING LOCATION
Top Factors when Choosing a Meeting Location Availability of Suitable Hotels Affordability of Destination Safety and Security of Destination Ease of Transportation Distance Travelled by Attendees Transportation Costs Clean and Unspoiled Environment Climate Mandated by Corporate Policy Availability of Recreational Facilities Sightseeing, Cultural Events, Attractions Glamourous/Popular Image of Location 0% Availability of Suitable Hotels 10% 20% Corporate Meetings 75% 68% 57% 57% 49% 49% 35% 30% 26% 24% 17% 13% 30% 40% Association Meetings * 70% 76% 45% 50% 54% 43% 28% 19% 23% 16% 17% 11% 50% 60% 70% Conventions 80% 75% 51% 50% 49% 39% 31% 23% 26% 19% 19% 11% 80% 90%
Affordability of Destination
Safety and Security of Destination
Ease of Transportation
Distance Travelled by Attendees
Transportation Costs Clean and Unspoiled Environment Climate
Mandated by Corporate Policy Availability of Recreational Facilities Sightseeing, Cultural Events, Attractions Glamourous/Popular Image of Location Corporate Meetings Association Meetings Conventions
* Note: Association meetings include: training and educational seminars, board meetings, professional and technical meetings, regional/local chapter meetings, and other off-premises meetings Source: 2002 Meetings Market Report, Meetings and Conventions Magazine
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TABLE 21
TOP FACTORS IN CHOOSING A HOTEL/FACILITY WITHIN A LOCATION
Top Factors When Choosing Hotel/Facility Within Location Cost of Hotel or Meeting Facility Negotiabile Food, Beverage, and Room Rates Number, Size, and Quality of Meeting Rooms Quality of Food Service Number, Size, and Quality of Sleeping Rooms Efficiency of Billing Procedures Availability of Meeting Support Services Efficiency of Check-In/Check-Out Procedures Assignment of One Staff Person to Handle Meeting Previous Experience in Dealing with Facility and Staff Convenience to Other Modes of Transportation Proximity to Airport Meeting Rooms with Multiple High-Speed Lines Availability of Exhibit Space Number, Size, and Quality of Suites Proximity to Shopping, Restaurants, Off-Site Provision of Special Meeting Services Other On-Site Recreational Facilities On-Site Golf Course 0% Cost of Hotel or Meeting Facility 10% Corporate Meetings 75% 77% 77% 69% 63% 58% 55% 50% 55% 51% 28% 26% 44% 56% 24% 18% 18% 15% 11% 20% 30% Association Meetings * 76% 71% 71% 62% 54% 44% 47% 40% 43% 39% 25% 26% 22% 21% 23% 16% 17% 10% 10% 40% 50% 60% 70% Conventions 80% 80% 87% 71% 71% 48% 50% 44% 52% 43% 22% 21% 21% 44% 21% 24% 16% 9% 9% 80% 90%
Number, Size, and Quality of Meeting Rooms
Number, Size, and Quality of Sleeping Rooms
Availability of Meeting Support Services
Assignment of One Staff Person to Handle Meeting
Convenience to Other Modes of Transportation
Meeting Rooms with Multiple High-Speed Lines
Number, Size, and Quality of Suites
Provision of Special Meeting Services
On-Site Golf Course Corporate Meetings Association Meetings Conventions
* Note: Association meetings include: training and educational seminars, board meetings, professional and technical meetings, regional/local chapter meetings, and other off-premises meetings Source: 2002 Meetings Market Report, Meetings and Conventions Magazine
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7.3
CONCLUSION
In light of the above analysis, some conclusions can be drawn as concerns the potential for new conference space in Downtown New Westminster, from a supply perspective:
It would be extremely difficult for a purpose-built conference facility to directly compete with the larger Vancouver conference space facility offerings (Canada Place/VCCEP, hotels, etc.), although the number of conference spaces both downtown and throughout the region provides an indication of the strong level of market support for meeting facilities in Metro Vancouver in general. Any new Downtown New Westminster conference space will likely be in direct competition with the other more established major hotels in the study area especially the Sheraton and the Hilton, both of which: o Can offer a wide variety of space sizes and formats (e.g. as many as 18 different rooms at the Sheraton and 11 at the Hilton) o Can host fairly large events (e.g. 900 and 450, respectively) o Cater to the same middle or upper market price point which would likely be necessary for a purpose-built conference centre. o Benefit from an established reputation and name-brand recognition o Benefit from a very strong and established reservation system
Furthermore, the current relative lack of a broad enough array of surrounding retail and eating and drinking facilities along Columbia Street, combined with the degree of social problems in the area, lead the consultant to believe that, in the absence of a much-heightened degree of attraction along the Columbia Street and Waterfront areas, there would be little incentive for attracting 3rd-party investment in a conference facility. Although Westminster Quay is an obvious exception, the adjacent presence of a hotel with considerable existing conference/banquet facilities somewhat obviates the ability to create a second facility in the immediate area of the Quay.
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8.0 STRATEGY RECOMMENDATIONS

The above land use marketability analyses provide valuable insight into the potential absorption of space in various land use categories over the study period. However, these forecasts are highly contingent on a number of other things taking place, and the absorption of retail, office, and hospitality space will, in the consultants considered opinion, largely fail to take place on its own and in the absence of several other key factors. There are a number of other key variables that will dictate whether these forecasts can be realized, which fall under a number of categories as described below. The findings of the land use marketability analysis must be tempered by the degree to which place-making will be achieved by means of the recommendations contained herein. It must be emphasized that this is not a planning exercise, but that certain key planning variables have a significant influence on the marketability findings contained herein. Furthermore, New Westminsters problems have individually and collectively been so serious that the City must be very careful about throwing good money after bad. It is the consultants considered opinion that these strategies must all be implemented in concert rather than piecemeal, and that failing to enact these strategies in their entirety will result in the sustained underperformance of the Downtown area. These are necessary in order to make Columbia Street a vibrant, prosperous destination. Half-measures will be wasted money and will not have the impact that both the City and the wider community are striving for.
8.1
BOOK-END CONCEPT
The creation of two book-ends at each end of the Columbia Street pedestrian retail precinct will act as anchors for the street. Whereas shopping malls traditionally relied on a department store for an anchor, the Columbia Street mall (roughly extending from Front Street to Clarkson Street and from 4th to 8th Street) can rely on clusters of activity at each end to anchor the precinct, and the rest will fill in on its own. The Western Bookend should not really extend much farther west than Blackie Street, because after a certain point, the street ceases to be pedestrian oriented and becomes increasingly auto-oriented. A few exceptions would be whatever Plaza 88 transit-oriented retail might front on to Columbia, and The Keg restaurant next to Hyack Square.
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This book-end should be made up of a number of different sub-components, adding to a sense of place, including Plaza 88 and the shopping village, the Keg, the SkyTrain Station, and New Westminster Quay, as well as new residential buildings being built in the area (Plaza 88, Inter-Urban, etc.) Some of the less built-up properties will eventually have towers with two, three, or even four levels of podium space, which will further enhance the supply of retail space in this area, as well as possibly office and institutional space, and furthermore a larger residential base. The eastern bookend would be situated around Columbia Station at 4th Street. Although this side might be somewhat weaker than the western end, at least in the short term, this area also presents a number of interesting development opportunities that would allow for greater diversity of merchandising mix and a larger on-site employment and residential base (refer to the later section treating the subject of sites to be redeveloped). This new mix might include substantially expanded retail options, as well as civic and institutional uses (a potentially relocated City Hall would be highly beneficial to this quadrant), and expanded arts and cultural uses (for instance, theatre, library, performing arts, and art gallery uses). These distances are pedestrian friendly, and are not very encumbered by steep grade changes as would be the case going up the hill to Uptown. Furthermore, the creation of these successful book-ends will result in the interstitial areas increasing in strength proportional with the strength of the anchors on both sides of the Columbia precinct through cross-fertilization.
8.2
DEMAND SIDE RECOMMENDATIONS
The revitalization of the downtown requires measures taken from both the supply and demand side, not only in order to ensure that a sufficiently broad array of traffic-generators exist in the precinct, but to ensure that there is sufficient demand to support these traffic-generators. It is a symbiotic relationship, and accordingly must be supported by appropriate policies on both sides. Although the following is not exhaustive, this listing nevertheless represents a very considerable number of measures to support the demand side of the equation:
The City must do whatever it can to very aggressively encourage new residential development in and around the Downtown, especially at the
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Larco site and along Columbia Street. The importance of the waterfront land to the health of the Downtown cannot be underestimated, and the City must do whatever is in its power to knit the waterfront with the rest of the Downtown. Depending on the need, this may involve the use of cash incentives (tax abatements, etc.) or other regulatory prompts to cause Larco to accelerate its planned development of at least the first phase of the property. This would bring about improved access, parking benefits, encapsulation of a portion of Front Street and the railway, and other benefits that would be in the interest of both the private investors and the wider community.
The City may also have to commission a separate, specialized study of how to accelerate residential development in the desired areas of downtown. Expenditures may be more limited in the area, especially until further development enters the area, not only because of lack of pedestrian traffic and a lack of retail destinationness, but also because of the lower income profile in the study area as compared to the region as a whole. There is an ever-pent-up demand for a village-like environment and what it can produce: ambience/atmosphere, interesting merchandise and unique services, and an overall social experience. This plays right into the hands of New Westminster and its potentialities (heritage, waterfront, transit accessibility, mixed-use neighbourhood, etc.) It is imperative that measures be taken to expand employment opportunities Downtown, which has the benefit of not only enlivening the streetscape with stronger pedestrian traffic, but also helps to correlate jobs with residences in New Westminster. Creating a strong employment base in the Downtown contributes to the creation of a climate where people can live/work/learn/play in an enjoyable walkable environment. And although this is typically advocated in most urban community plans, it would not be possible in New Westminster if it did not already manifest a substantial degree of this opportunity. Firms with regional-oriented operations might find it highly advantageous to locate here. For instance, attracting an engineering firm to New Westminster could be advantageous because of its central location in the region and favourable accessibility. As is the case with accelerated residential development, there may be a need for a separate, focused study to be commissioned on how to attract employment that correlates with Downtown residents. Government-based employment can be a valuable asset in terms of expanding the employment base. However, because there is strong
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competition for these positions from all municipalities, this should not be relied on as the only source of local employment or office use. This is true not only because so many other jurisdictions are competing for these same jobs, but also in light of the current budgetary constraints of all senior levels of government which inhibits the generation of new public sector employment.
8.3
SUPPLY SIDE RECOMMENDATIONS:

Downtown needs a tenant mix and merchandising theme that complements, rather than competes with, principal areas of competitive influence, especially Big Bend, Uptown, Metrotown, and others. The Downtown has to take advantage of heritage-ness of Columbia Street, which works in lock-step with the retail cluster, comprised of local and specialty tenants. This local/specialty element is a big niche, and some elements of this concept are already present (e.g. there is already something of a cluster of antiques, bridal/formal wear, among others). However, more needs to be done in this respect Columbia Street does not benefit from the traffic-generation of largeformat stores, and department stores are already in decline and certainly are not coming into the area. Rather, relying on a finer-grained series of local and specialized shops will not only satisfy local needs, but will beget inflow that is presently absent. This specialty retail certainly need not be high-end to succeed, but it must be local, authentic, and interesting. Antiques are an excellent manifestation of this concept, but on their own are not broad enough to create substantial attraction, and do nothing to meet the local retail needs of Downtown residents. First and foremost the retail offerings must be responsive to the needs of the primary market. But if the retail is competitive on price and is able to reach sufficient critical mass, it is possible to attract a secondary market. An example of this concept is the creation of a baby/infant cluster of shops (for instance, shoes, clothing, accessories, and other specialty goods that are both practical relevant to the surrounding demographic). Efforts should be made to create a series of specialty stores (which are not high-end) and alternative retailing, not unlike Commercial Drive, and certain sections of 4th Avenue, Broadway, and Chinatown, but at a lower price point structure. It must be emphasized that, in light of the local demographics, the merchandise has to be competitive on price! Commercial entertainment is a use that cannot be overlooked. For instance, theatres and cinemas act as substantial traffic generators, so long as they do not consume the entire street frontage by locating above grade
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or at the back of the block. Indeed, there is certainly potential for New Westminster to become the second-most important theatrical venue in the entire Lower Mainland for live drama. This could become part of a larger cultural complex that ties in a refurbished Raymond Burr Theatre. The theatres do not have to be very large (30-40 seat), and could focus on certain niches that are largely unmet elsewhere (e.g. childrens theatre, puppet theatre, alternative theatre, dining theatre, etc.). Although the consultant is aware of the difficulties so far in finding sufficient funds to renovate the Burr Theatre, it is not inconceivable that this project could be paid for in conjunction with a new mixed-use residential and retail development nearby as part of a comprehensive zoning and development agreement.
Eating and Drinking not only improve the vibrancy of an area by generating destination-ness, but restaurants and cafes enrich the merchandising mix of an area. However, because eating and drinking is a relatively risky business with notoriously thin margins, retail will have to take the lead and become better entrenched in the Downtown before a substantial array of new restaurants ventures into the area. Fortunately, they do not need to be large restaurants, so long as they are well-run and offer a variety of restaurant types that is to say, a wide mix is highly important, and should include several cuisine types and price points. Education has to be expanded. Douglas College and various ESL schools form the anchor for this use, but in and of themselves cannot be relied on for expanding the educational base in the Downtown. Douglas currently has no intention of expanding its present campus, and ESL is somewhat oversupplied throughout the region. Partnering with other local institutions to provide more technical/vocational offerings would be a more effective approach than relying on the above-mentioned two bases. The broader and deeper the mix is, the better. Granville Island is an excellent example of an area with wide breadth in its mix, because it demonstrates the power of synergy where the whole is greater than the sum of the parts. It has numerous different uses (retail, performing arts, office, institutional, industrial, arts and crafts, etc.), and even though certain uses are non-complimentary (e.g. industrial can hardly be said to complement performing arts), the sheer heterogeneity and unique local character of the island creates destinationness, variety, and sense of place.
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8.4
PLANNING RECOMMENDATIONS
In the medium-term, it might be possible to bridge across the tracks at certain key locations as a means of enabling enable a pedestrian-oriented /place-making program that creates an uninterrupted people place environment stretching from Columbia down to the waters edge. The built form in and around the Downtown is so important. Slender towers preserve views of the water, and also help to preserve sunlit spaces on the ground. If the area doesnt have attractive ground planes, it will not be able to attract significant retail and restaurant. In recognition that most office users will not require multi-floor office space (such as towers) to accommodate their needs, the focus at the moment should be on including office space in the podium area in new developments, above the retail space at grade but below the residences (if applicable). That said, there may be potential for one or two mid-rise office buildings in the area over the course of the study period. Serious consideration should be made for enacting restrictions on banks, professionals, and educational uses at grade. These uses do not create vibrant street activity and instead diminish the appeal of the street by crowding out restaurants, retail, and entertainment uses. However, so as not to disadvantage these commercial uses, an offsetting provision should also be made to permit entrances off of the street, with the proviso that the entrance account for only a certain percentage of the frontage, or a maximum number of lineal feet of the frontage on any given block, with these less desirable uses located above grade or at the back of the building. The creation of weather-protected sidewalks provides not only continuous protection from rain, but also serves as a way to knit the entire street together. This linkage need not necessarily require the use of the same sort of awning, but consistency in various streetscape elements can be more subtle and effective as a means of tying together the different enterprises, such as the light standards, flower baskets, signage/way-finding, etc. The consultant understands that the requirement for weather-protected sidewalks is already in place, and this will continue to aid and abet the creation of a more desirable retail precinct. All of these thematic aspects are related to the sense of place, which encourages people to not only visit the area, but to linger. Victoria and Gastown are excellent examples of this, not only because of their turn-ofthe-century architecture and heritage preservation, but because they have leveraged these elements to create a common theme with strong streetoriented retail. New Westminster should be very different from these locations, though, because of less emphasis on souvenirs, impulse
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purchases, and high-end shopping and dining. Instead, New Westminster should cater to local residents, not tourism, because it resonates with the Downtown and other nearby residents.
Consideration should be made for an ordinance to force all new facades to blend with the heritage ones. As noted above, this contributes to a sense of place. A future relocation of City Hall into the Downtown would help to increase pedestrian activity, would allow for the creation of a new and more efficient space for the City, as well as create the opportunity for the disposition of the current site for redevelopment, the proceeds of which would fund the redevelopment. The police station occupies a very large amount of frontage, and a possible relocation of the station to a location farther up the hill (perhaps to 6th Avenue in the projected employment precinct) would free up a great deal of valuable frontage for retail use. Alternatively, it should be explored to what extent and at what cost the street-level space in the police station could be redemised to host retail activity along Columbia to make better use of the frontage and to provide a great deal more animation to Columbia Street between Sixth and Eighth. Similarly, the Greater Vancouver Transit Authority Police Service building east of Columbia Station does nothing to create pedestrian traffic in the area. The judicious use of bonusing to accentuate mixed-use development, rather than just residential towers. Encourage two grades of retail (especially on the north side of Columbia Street, where the second storey might possibly have grade-level access from Clarkson or Carnarvon Street) and office use or educational use above the retail. Somewhat more controversially, an avenue to explore would be a restrictions on any new shops opening in New Westminster outside of the Columbia mall (as identified above), with the exception of some very limited convenience retail that would not be covered by this restriction. This would help to focus all retail energy onto Columbia without dispersing retail activity too widely throughout the city. Although it is clearly as a task that extends well beyond any planning regulations, one of the most essential and yet intractable problems with Columbia Street and Downtown New Westminster that must be resolved is the manifestation of social problems through homelessness and panhandling. That said, some initiatives can have a dramatic impact on at the very least changing the character of the street (e.g. through BIA ambassadors, more police, etc.) Furthermore, there is much to be said for
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dispersing or at least avoiding an untoward concentration of agencies and services that provide support and social programs for homeless people and people with drug problems, mental illness, etc. Unfortunately, if a solution to some of the social problems plaguing the area cannot be found, then many of these other initiatives described above may be fruitless. Essentially, if the area is not safe or pleasant to be in, people will not go Downtown to work, shop, eat, and socialize, and may even avoid living there altogether.
A re-animation of the waterfront (e.g. seawall, marina, etc.) is the key, specific, and most important, incremental ingredient for the resuscitation of Columbia Street. This and generates enormous pedestrian traffic, and gets people into the precinct, so even if they are only going to the water, they still pass by all of the other retail, restaurants, services, etc. This need not require the total encapsulation of all of Front Street, but should involve the creation of crossings at key intersections to provide better access directly to the water.
8.5
DOWNTOWN DEVELOPMENT CORPORATION
The formation of a Downtown Development Corporation is possibly the singlemost important implementation measure that can be taken by the City in order to bring the vision of a vibrant Downtown to fruition. The mandate of this corporation, not unlike the models that have been successfully pursued in many other communities, is to leverage the power of the municipal government to assemble and dispose of parcels of land on a strategic basis in furtherance of their community objectives. This is particularly true in areas where land ownership is heavily fragmented, which is clearly the case in Downtown New Westminster. The benefits of the DDC are that it removes the politics from the economics by allowing for a greater degree of autonomy for the DDC to assemble and dispose of properties on a market basis. Furthermore, a DDC would be able to successfully negotiate a long list of municipal entitlements for these properties that would not otherwise be the case with a private sector. Furthermore, a DDC might also be involved in carrying out retention and recruitment programs, not just for retail, but all business. Similarly, the local BIAs agenda and budgeting program may shift in partnership with the City and the DDC to focus more on coordinating recruitment and retention activities, and addressing the quality of the Downtown environment. The Downtown Development Corporation is discussed in further detail in the following section of this study.
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8.6
OTHER COMMENTS
Too often, analysts are called on to make forecasts, but pay no heed to implementation. Accordingly, the above are intended to provide guidance as to the measures that can be taken on the part of the City to ensure that the land use marketability of the important Downtown precinct comes to fruition as described in the above sections. The land use marketability analyses included in this report are not concrete projections, but rather suggest what in principle might be expected over the study period and to provide appropriate context for proposing new developments in the study area. Finally, it must be re-emphasized that the recommendations provided in this section cannot be selected on a one-off or piece-meal basis, but rather must be implemented in concert. Metaphorically, the above-described measures should be considered analogous to fuel for igniting a strengthened and revitalized Downtown. Applying a little bit of energy or stimulus throughout the area will not work, as too much dispersed energy will simply peter out. However, if there is a concentrated supply of energy in only the appropriate locations, it will burn continuously and even spread outwards to other areas. This reinforces the bookend concept advocated at the beginning of this section, which will ensure that these areas are not only become strong in their own right, but that they then spread their strength to other surrounding areas in the Downtown and create a sustainable, desirable precinct in keeping with the communitys vision for the area.
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9.0 LOCATIONAL CONSIDERATIONS

This section builds on earlier findings by identifying appropriate locations for the warranted space over the study period, both in terms of horizontal and vertical considerations, as well reference to mixed-use and infill opportunities. In all instances, great care has been made for consideration of factors that could contribute to the area as a whole. For instance, the consultant has gone to some lengths to examine potential for synergies and clustering, and has sought to indicate the most likely prospective use types where possible.
9.1
LOCATIONAL CONSIDERATIONS BY LAND USE TYPE
RETAIL
To accommodate the new warranted space in the downtown, it would need to be incorporated into multi-level (presumably mixed-use) projects. Virtually all further incremental retail space expansion in the study area will come in the form of more densely-configured space, generally on the lower one, two, three, or even four, storeys of mid- or high-rise residential (or office/mixed-use) towers. This is especially true where the grade differential creates the possibility of creating two at-grade spaces (for instance, street level off of Clarkson Street or Carnarvon Street could well become a second-storey at-grade commercial space). As the various parcels throughout the downtown that currently under-achieve their full development potential eventually are redeveloped, there will be considerable opportunity to increase the amount of retail space on each site that could accommodate the new net growth in the Citys retail supply.
OFFICE
Sixth Street and the area surrounding has been identified in the Downtown Community Plan as the preferred area for new employment uses. However, until Columbia Street works as an effective commercial precinct, there will be little impetus for very much new office space to be built Downtown. Once there is enough commercial activity and sufficient retail and restaurant facilities in the area to make it a desirable place to live, shop, and learn, it will soon become a desirable place to work, too and demand for office space will follow along with all of the supporting commercial service uses required to serve nearby employment space.
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HOSPITALITY
The consultant is unable at this time to recommend an appropriate location for new hospitality uses because of the perceived lack of demand for new hospitality space in Downtown New Westminster in the short term. Given that it could be five years before sufficient incremental hotel space is warranted in New Westminster, a re-evaluation of this land use is recommended when market conditions can be better assessed for the middle and latter years of the study period, and subsequent to further new developments in the Downtown precinct that would make the area more marketable for hospitality uses.
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10.0 DOWNTOWN DEVELOPMENT CORP.

One of the aims of this study is to illustrate to the client the magnitude of the value of public sector entitlements and how to leverage these entitlements so as to reap significant financial and non-financial rewards from real property assets where there is the most potential for creating vibrant clusters with many uses and destination-ness. This section will form the basis of the discussion about how a public sector body, specifically a Downtown Development Corporation, can harvest the values from these entitlements not merely for the potential profits involved, but more importantly in order to generate the public benefits that would accrue through the creation of appropriate new developments in key areas of the Downtown. By extension, the discussion will bear on how this can be accomplished with minimal risk, and what the disposition and exit strategies are that permit the maximum lift. One of the greatest constraints to implementation of successful downtown commercial development, over and above any perceived safety/comfort issues, is the reluctance of the private sector to deal with thin blocks, heavily fragmented land parcels, and heritage restrictions, and the difficulty to assemble lots with the right size, capacity, location, and configuration to attract the necessary uses to make it work. That is why a Downtown Development Corporation should be mandated. Fortunately, one of the most significant advantages facing the City of New Westminster is that there is already in place a mechanism (the New Westminster Redevelopment Act) which provides the authority to undertake various acquisition and disposal activities with considerably greater ease (under the provision that the current use is not meeting the community plan objectives) than is typically faced by most municipal entities. This circumstance should greatly enable and expedite any activities on the part of the client in furtherance of the creation of more developable pieces of land, which will encourage a more highly accelerated development program as described in earlier sections of this study.
10.1 PUBLIC SECTOR ENTITLEMENTS

Although there exists at all levels of government very valuable public sector entitlements regarding land development, this report will focus on locally regionally controlled development entitlements. However, the importance of federal and provincial grants and the employment of other strategic public sector
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resources should not be overlooked, and can represent a very important basis of funding and policy support. The powers vested in the municipal government have a more direct impact on land development, and therefore should be seen as the source of the most opportunity to harness and unlock the values contained therein. These entitlements fall within three principal categories: 1. Public Activities Concerning Land With respect to land acquisition/assembly, the public sector has several means at its disposal, chiefly:

It can provide land out of its portfolio of publicly-owned land It can enter the real estate market and purchase land It can use or obtain expropriation/condemnation authority to acquire land It can make use of air rights, sub-surface rights, and surface right-of-way leases to expand the possibilities of development
The availability of parcels of land with development potential is obviously a fundamental precursor to effective development activity. A public sector body, such as a Downtown Development Corporation, with the power to acquire land, should carefully consider the use of land assembly/acquisition activities to pursue their development objectives. With developable parcels having been assembled, there are several options available to make this land available to private sector investment. 2. Planning and Development Regulations As development cannot proceed without various reviews and approvals by the public sector, it is the public sector itself that is in the best position to advance these processes to its own advantage. Principally, the local government has authority over:

OCP amendments Zoning and land use controls Development rights, including allocation of densities, fees, and levies The development approval process Menu of municipal requirements, including daycare, green space, office space, non-market housing, seniors facilities, etc. Intra-governmental or inter-agency cooperation / coordination
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Not only is the local government able to control its own zoning and development processes, but it can use this to expedite or streamline various review and approval procedures, or it can use this in order to tinker with supply factors to create competition or to constrain development. 3. Taxation The municipal government has a variety of tax tools at its disposal, and can exercise a great deal of discretion as concerns:

Property tax Creation of special assessment districts Tax concessions and exemptions Other tax issues (such as abatements)
(This is the approach that has been taken by the City of Surrey in the creation of special economic zones in the City Centre and South Westminster areas, as a means of encouraging more aggressive commercial development in these precincts, which the City has prioritized for this sort of development. These measures have been lauded by the development community as an example of what a proactive municipal strategy can do to encourage new commercial development in targeted areas of a community that has historically suffered from under-investment in these land uses.) This menu demonstrates the breadth of opportunities that might be leveraged or exploited for added value and procedural improvement as concerns real estate development. A municipally-sanctioned Downtown Development Corporation, as a public sector body and a subsidiary of the local government, is highly advantaged in its ability to strategically negotiate for any or all of these entitlements, and is therefore in a far greater position to do so than any private developer. It is precisely because of this advantaged position that this corporation could benefit from an approach to real estate development that would harness not just the value of development entitlements, but especially the incremental real estate value increases that accrue from the assemblage of several fragmented parcel into a single property onto which the optimal development can be created.
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10.2
IMPLEMENTATION STRATEGY OPTIONS
Given the opportunities to create the anchors for a successful downtown retail precinct as described above, this study has demonstrated that there is strong impetus for engaging in land development in certain portions of the downtown. The implication is that not only should the City become aware of, but also take full advantage of, the land development opportunities that naturally present themselves throughout the study area. This presents two options: 1. Continue past practices This option is essentially a continuation of past practices, and involves taking no pro-active role in the assembly of suitably attractive new development parcels Downtown. 2. Form a subsidiary company to engage in real estate development The second option requires a more participatory and forward-thinking approach to real estate acquisition and disposition, and merits a much more elaborate discussion than the previous option. It can also involve numerous different stages of initiatives and interventions at all levels of development. This option and its different stages are explored in further depth below.
Form a subsidiary organization engaged in land development
The creation of a development body as a subsidiary of the municipality, with specific delegated and autonomous features, offers the potential as an effective mechanism to pursue profitable development. This body would offer the flexibility and responsiveness of a private sector firm, while at the same time enjoying the benefit of exemption from much of the procedural/legal restrictions and political accountability encountered by the public sector. Being immune to certain legal and political constraints, yet maintaining a degree of accountability to the public sector, a quasi-public development authority may perform a useful role and obtain results not otherwise available or achievable in either private or public sector ventures. Once a development subsidiary was formed, it would have to decide on the scope of its mandate, and decide how far into the development process it is willing to go. This study will explore four different stages at which it feels it should engage in disposition of its real property assets, although numerous variations on these four stages are possible:
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1. Stage 1 Land assembly 2. Stage 2 Land assembly and rezoning 3. Stage 3 Land assembly, rezoning, and land development 4. Stage 4 Land assembly, rezoning, land development, and construction Stage 1 Land assembly The DDC would leverage its public sector ability to acquire or expropriate land in the vicinity of a transit station impact area, and would put together an appropriate assembly. The land would then be disposed of as is to a private sector developer on a competitive basis. Stage 2 Land assembly and rezoning As above, except that instead of disposing of the land as is, the DDC would use its public sector influence in the development approval to secure an appropriate zoning amendment as concerns land use type and density. This is the stage at which there is the most lift and for which there is little actual cost to either the DDC or the municipality providing the rezoning. The land package would then be disposed of as is to private sector developers on a competitive basis. Stage 3 Land assembly, rezoning, and land development As above, except that instead of disposing of the land package as is, the DDC would itself engage in site master-planning, demolition (if appropriate), utility servicing, and other site works. The land package would then be disposed of as is to private sector developers on a competitive basis. The rationale for engaging in this expense is that without the improvements, private sector developers will offer a discount to account not only for the costs involved in upgrading the land to a developable state, but also the time required to improve the site (e.g. demolition) and to account for extra risks. Stage 4 Land assembly, rezoning, land development, and construction As above, but instead of selling the land in its developable, serviced state, the DDC engages in the actual construction of whatever development it has planned for the site. This is by far the most capital-intensive of the options, but in most cases yields the highest revenue-generating potential, and allows the development body to leverage its ability to secure fast-tracking of development permits, as well as the possibility of accessing capital at a lower
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borrowing cost than the private sector. Upon completion of the construction, the development body would then market the project for sale or lease, depending on the nature of the development, the market conditions, and the financing requirements of the parent company. If the public sectors preferred option for taking advantage of perceived incremental values is to remain in the development, then this more often than not would be reflected in some form of joint-venture with a suitably selected experienced private sector developer. The consultant is of the opinion that it is not necessary for the public sector development company to go so far as the final stage and engage in the construction of the projects, as the subsidiary may not necessarily have the mandate to do so. It is also the riskiest, most complicated, most capital-intensive, and lengthiest of the options, and therefore perhaps neither appropriate nor politically acceptable (for fears of crowding out the private market or of risking the loss of public funds). It is felt, though, that as a minimum, the DDC should be the intervener who acquires and exercises the entitlements prior to disposition. Indeed, it is the DDC who is in a better position to negotiate and secure these entitlements, far more so than any third-party private developer. Therefore Stage 2 or 3 is likely the most appropriate extent of public sector involvement in this regard. Owner in Fee Simple Once the land package has been assembled and repackaged, it is sold by the public development authority to a private builder, who will finish the building process. Lessee This is essentially similar to the fee simple option, with the exception that the private builder does not gain ownership of the land. Instead, it is acquired on a long-term lease basis, which allows the builder to operate with much lower upfront capital requirements, and facilitates the ability to access capital. The public sector also then has the opportunity to participate, in various ways, in either gross or net revenue proceeds. In addition, in instances of long-term leases, it is not unusual to build in the provision of readjusting base rent revenues through the advent of reappraisals towards the end of long lease terms. It should also be recognized that at the expiration of the lease, the landlord (the public sector) has all of the reversionary
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rights and essentially obtains, at no cost, not only the original base property, but any and all improvements that have been provided, over the years, by the third party private sector lessee.
10.3
DISPOSITION OPTIONS
It is the consultants primary interest to identify the point where the public sector can gain the most from these developments with the lowest risk and lowest capital increases involved. This study tries to demonstrate how to determine where increased costs and involvement terminate at the point of maximum benefit. Time and time again, it has been found that the sweet spot occurs following the acquisition of all appropriate entitlements (at a very minimal cost), putting together a marketing package and disposing of it on a sophisticated, competitive, and possibly phased, basis to private development interests. Of course, no two circumstances are the same. Each asset must be examined on a customized basis.
Land Leasing
The sale of land is now less frequently used as a means to dispose of property possessing a high degree of development potential than in the past. The sale of such land removes valuable property from the public portfolio and limits the opportunity to benefit directly from escalating property values. More and more, governments have made use of the long-term lease as the means to dispose of land. The financial benefits derived from the land are then determined under the negotiated terms of the lease. There has been an increased willingness to share in the potential profits and risks of a project via the way of participation (percentage) rent agreements. With this mechanism, the public sector agrees to accept a moderate base rent in anticipation of a larger overall income from the property resulting from its percentage share of the projects cash flows. This mechanism can sometimes serve as an incentive to development as the public sector risks some of its capital investment in the early years of a project an incentive to the private sector for reduced payments in the critical early years of development. Where the land lease is selected as the mechanism to facilitate joint development, the public sector should be aware that a wide variety of agreements are possible. Long-term leases can reduce the front-end costs of development and make longterm financing easier to obtain for the builder.
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Interim Land Uses
Because the market fluctuates, and it is not always possible to sell land at the optimal time, there is also potential for interim uses that allow the land holder to earn sufficient return from the property so as to carry the land until time of disposition or future use. One of the primary means of achieving this is through storage space. With the cost of residential and office space so high, increasingly residents and businesses of the Lower Mainland have turned to outside storage facilities to store most of their unused or underused items. These storage facilities can be constructed with a very minimal capital outlay, and have very stable operating margins and strong demand. Thus, they represent an excellent approach to interim land use for a property being held for future development.
10.4
IMPEDIMENTS
The issue of public sector land development must always be approached from the perspective of minimizing risk. Therefore, appropriate strategies must be pursued which allow the initial capital outlay to remain low, and which provide for realistic exit strategies at every stage of the development process (for example, through the creative use of land acquisition options).
Consultative Process
The approval process relating to property development can be complicated, convoluted, tortuous, and rife with stalling, delays, and conflicting interests. Additionally, there can be problems from municipalities who fail to see the benefits of densified land development in station impact areas, or who want to share in the revenue implications of new development, or who lack the political will to engage in private sector activities for fear of profiting from new development. The first approach to mitigating political risk is simply to acknowledge and accept the vagaries of municipal councils and their democratic process, and the problems associated with the approval processes, (such as community-wide consultation and expectations of total transparency).
One must recognize the silly season at the end of a municipal term, and therefore that certain activities must be dealt with at the beginning of the term, and not the end Timing can be critical to the success or failure of a project
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A further approach would be secure support from several levels of government. This can be effectively done by sharing the costs with and obtaining grants from more senior levels of government and from several different agencies if possible, which effectively secures wider support for any given project.
NIMBYism
Although it will vary considerably by location, theres no question that due to misperceptions of opportunities and benefits involved in such development, the public can be difficult and will politicize what could be a rational planning decision. It should not be forgotten that municipal officials can be easily persuaded by NIMBYism. In the case of New Westminster, this sort of opposition may come from residents or business groups who are not yet aware of the degree to which these steps will be beneficial not only for the community at large, but for themselves as well. Of course, each situation must be examined on a customized fashion, but there are commonalities as regards potential mitigations. From an education standpoint, the public at large must be aware of the issues involved, and as a subset of that, proper education and advisory of the media is also required
Market Conditions
Market conditions, involving unpredictable real estate market cycles and varying supply and demand dynamics, can present a significant obstacle. The solution is to embark on strategies of acquisition and disposition which minimize exposure to those fluctuations, or even allow the agency to take advantage of changing market conditions.
Firstly, responsible development must be preceded by carefully prepared land-use market studies, to ascertain more accurate information regarding timing/phasing, and what can be expected in terms of market conditions. Secondly, the use of CD (Comprehensive Development) zoning can build in flexibility to a project. This allows the contemplation of swing zoning to accommodate fluctuations in market conditions and whatever zoning adjustments are appropriate to a specific project at a given time. Thirdly, the use of alternative acquisition strategies: o Purchase contracts with exceptionally attractive and flexible terms; o Optioning contracts, which can be very of a very sophisticated structure so as to provide optimum flexibility at the lowest cost.
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Risk Management

First of all, risk must be properly measured. Secondly, one must build in proper contingency plans (to allow for increased construction costs, rising costs of capital, etc.) Thirdly, the initial capital outlay must be kept low, and appropriate strategies must be pursued which allow the initial outlay to remain low. For example, property should be bought in large parcels at wholesale price, or can be acquired from portfolios in the domain of other public sector agencies. Fourthly, one must create and maintain realistic exit strategies right from the beginning such that upon proceeding to each step, there is sufficient assurance that there is a means to extricate oneself from the situation.
These strategies might be created through the use of options, which allow for withdrawal (albeit with a cost involved) or alternative disposition points which offer the maximum lift for the minimal risk. This would likely involve regular engagement in cost-benefit analysis in order to measure the cost of exercising the withdrawal option versus the cost and risk of remaining engaged.
10.5
RECOMMENDATION
If the municipality recognizes that the potential exists for a significant number of development opportunities in the appropriate areas, it is advisable to create a subsidiary DDC charged specifically with pursuing real estate assemblage opportunities so as prompt new development in conformity with the goals of the Downtown area plan. This subsidiary company should ideally be empowered with the following authority:
To prepare and adopt plans, programs, and projects for the development or re-development of property To acquire real property in these zones by a variety of legally appropriate means To sell, convey, transfer, lease, or otherwise dispose of real property to any public or private legal entity under terms deemed to be appropriate for the development objectives To be a vehicle for attracting entitlements and other resources from other levels of government To participate as an equity partner in joint development, if need be, or to be the sole owner and developer of certain parcels of property
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If possible, to be responsible for all licensing and other administrative decisions and actions for the property normally performed by a variety of municipal departments and public agencies that would typically be involved in the development process. A variety of planning objectives may be more effectively achieved with a single, formally coordinated development body. This may prove more cumbersome and controversial than it is worth, however, and may not be an avenue that the City would choose to pursue.
Approach:
a) Identify the joint development opportunities in the Downtown area, that is, compile an inventory of all public land, under-developed parcels, transition areas, and strategic land held privately b) Identify the range of strategies available to achieve development opportunities, i.e. public improvements, land acquisition/assembly and disposition alternatives, financing options, development incentives and criteria, etc. c) Formulate a development plan for each property, i.e. thought to location, type, and timing of desired developments, etc. d) Formulate a clear definition of the roles, tasks, and strategies to be employed by each party, such as a joint committee to negotiate with private developers, determination of how land will be disposed, how additional public improvements/expenditures (e.g. heritage remediation, etc.) will be financed, and so forth. e) Implement the strategies for possible joint development When attempting to identify joint development opportunities the municipality will already hold land in the target area, and in other cases, a different public sector entity (such as TransLink and/or GVTAPS) may hold some as well. Thus, a number of options arise with respect to land acquisition/assembly: a) In select cases, it may be advisable to combine their respective land holdings in order to create an attractive development parcel which can better meet their combined planning objectives compared to piecemeal approach to land development b) The municipality may recognize the importance of acquiring additional strategic parcels of land held privately. The means available to the
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public sector to do so include, as mentioned above: purchase or optioning of land, use of expropriation/condemnation powers, and the possibility of land exchanges or swaps of land in the portfolio.
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Downtown New West Market Study - 09

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Downtown New West Market Study - 09

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APRIL 2009

Urbanics Consultants Ltd.

DOWNTOWN COMMERCIAL LAND USE MARKETABILITY STUDY

DOWNTOWN COMMERCIAL LAND USE MARKETABILITY STUDY

The City of New Westminster

Prepared by: Urbanics Consultants Ltd.

LIST OF TABLES AND FIGURES

Hotel and Office Study Area Delineation Hotel Supply Map

5. OFFICE MARKET ANALYSIS: A projection of warranted office space

9. LOCATIONAL CONSIDERATIONS: Outlines the consultants primary

2.0 STUDY AREA ASSESSMENT

FRONT STREET / NORTH FRASER PERIMETER ROAD

LAND USE CONTEXT

OTHER GEOGRAPHICAL / CONTEXTUAL FACTORS

STUDY AREA DELINEATION

3.0 DEMOGRAPHIC & ECONOMIC OVERVIEW

DOWNTOWN POPULATION DEMOGRAPHICS

TABLE 1 NEW WESTMINSTER

POPULATION - LOW SCENARIO Downtown New West Total Downtown as % of Total

2006 8,900 61,600 14%

2011 10,600 67,000 16%

2016 12,700 71,900 17%

2021 15,200 79,300 19%

2026 18,200 85,800 21%

2006 8,900 61,600 14%

2011 10,600 66,900 16%

2016 12,600 72,500 17%

2021 15,400 80,300 19%

2026 18,400 87,000 21%

POPULATION - HIGH SCENARIO Downtown New West Total Downtown as % of Total

2006 8,900 61,600 14%

2011 10,600 67,100 16%

2016 12,700 73,100 17%

2021 15,800 82,600 19%

2026 19,300 91,200 21%

Source: City of New Wesminster; Urbanics Consultants, Ltd.

(Source: Statistics Canada)

Three Census Metro Vancouver Tract Total

11,120 9,985 11.4% 6,431 5,940 5,703 1.95

2,116,581 1,986,965 6.5% 870,992 817,033 736 2,877

5,940 57% 43% 58% 236,102 $

817,230 65% 35% 41% 520,937

5,940 1.8 48,262 $ 757 $ 1,003 $

817,230 2.6 55,231 812 1,081

9,765 22.0% 27,923 $ 82.4

1,659,535 20.8% 25,032 78.0

Source: Statistics Canada, 2006 Census of Population.

The following observations can be made:

Refer to Table 3 for further detail on these general statistics.

The following observations can be made:

Refer to Table 3 for further detail on these household statistics.

Three Census Metro Vancouver Tract Total

11,095 7,560 240 15 3,275 68%

2,097,960 1,190,555 24,135 2,850 880,420 57%

11,095 7,420 3,520 1,455 1,340 720 155

2,097,965 1,227,495 831,265 388,740 290,830 151,690 39,205

10,070 1,365 2,720 1,000 2,020 690 2,265 41% 59%

1,752,390 303,345 473,315 150,045 282,780 110,945 431,955 44% 56%

Source: Statistics Canada, 2006 Census of Population.

The following observations can be made:

Refer to Table 4 for further detail on these industry statistics.

Three Census Metro Vancouver Tract Total

10,070 7,195 6,865 330 2,880 72.7% 69.4% 4.5%