Developer pulls plug on con­dos

Buy­ers will get their de­posits back, but say they’re now priced out of mar­ket

Vancouver Sun - - CITY - JOANNE LEE-YOUNG

Vi­va­grand De­vel­op­ments, a Van­cou­ver-based firm that de­scribes it­self as the North Amer­i­can of­fice of a prop­erty developer in south­ern China, has can­celled its Lan­gara West condo project in the Cam­bie Street cor­ri­dor.

It’s a rare move that comes as land prices in the area, as well as end prices for con­dos and town­homes in gen­eral, have surged.

It leaves 71 buy­ers of one-, twoand three-bed­room con­dos who, start­ing two years ago, locked into pre-sale con­tracts of around $700 to $900 a square foot with noth­ing but an of­fer from the developer to re­turn their de­posits, “plus an ad­di­tional 50 per cent of their paid de­posit as fur­ther com­pen­sa­tion. For your $49,390 de­posit, that means you will re­ceive a to­tal pay­ment of $74,085.”

That’s lit­tle con­so­la­tion in an area where prices for pre-sale con­dos are now go­ing for be­tween $1,200 to $1,400 a square foot, ac­cord­ing to buy­ers who shared let­ters they re­ceived from Vi­va­grand.

They are reach­ing out to each other and po­ten­tially seek­ing le­gal advice.

Some say they are now priced out of buy­ing other con­dos or homes in the area given the ap­pre­ci­a­tion in prices.

Vi­va­grand said in an email, “the project will not be re-mar­keted and the prop­erty will be sold. This was an in­cred­i­bly dif­fi­cult de­ci­sion, which was driven by ex­ten­sive per­mit­ting de­lays, sharply ris­ing con­struc­tion costs and the sub­se­quent loss of project fi­nanc­ing.”

It ex­plained to Post­media: “Lan­gara West sub­mit­ted its de­vel­op­ment per­mit ap­pli­ca­tion to the City of Van­cou­ver two years ago, in Septem­ber 2015. To date, the fi­nal de­vel­op­ment per­mit for the project has not yet been is­sued. As such, con­struc­tion has not yet been able to com­mence and the project would not be fin­ished by the con­trac­tual com­ple­tion date (July 2019).

De­tails in let­ters shared by the company with buy­ers re­veal a pos­si­bly shorter time­line, and the city, in an emailed re­ply to Post­media’s queries, agreed:

“The City of Van­cou­ver is dis­ap­pointed that the developer has cho­sen to halt the project at this time, when the per­mit is close to com­ple­tion, af­ter years of col­lec­tive work on the project, and when the city is in dire need of more hous­ing.”

In Jan­uary 2017, Vi­va­grand no­ti­fied buy­ers it had ob­tained con­struc­tion fi­nanc­ing for the de­vel­op­ment from CIBC and Cana­dian Western Bank. The company had also been keep­ing buy­ers in­formed about a sit­u­a­tion in­volv­ing a felled tree. It said in October 2016 that a tree on the cor­ner of the de­vel­op­ment had been cut down with­out per­mis­sion. The company hired a pri­vate firm to in­ves­ti­gate, but was un­able to iden­tify the in­di­vid­u­als in­volved. It then no­ti­fied and worked with the city on a re­vised land­scap­ing plan, which was sub­mit­ted in April 2017.

“Un­for­tu­nately, in this in­stance, the time­line for is­suance of per­mits was ex­tended due to the fact that the developer re­peat­edly sub­mit­ted designs that con­tra­vened by­laws and the site con­di­tions set forth by coun­cil (and re­it­er­ated by staff ), which specif­i­cally re­quired the pro­tec­tion of key trees on site,” ac­cord­ing to the city.

In April 2017, Vi­va­grand let buy­ers know it hadn’t yet re­ceived a de­vel­op­ment or building per­mit and gave them the op­tion to sign an ad­den­dum con­firm­ing a de­sire to con­tinue their con­tracts.

“Ac­com­mo­da­tion of this tree was one of the city’s orig­i­nal re­quire­ments for is­suance of the de­vel­op­ment per­mit,” Vi­va­grand told buy­ers, ex­plain­ing there could be de­sign and ex­te­rior land­scap­ing changes.

The city said it gave the developer feed­back on its sub­mis­sion in March 2016, but did not re­ceive a re­design un­til April 2017, “a pe­riod of 13 months. Dur­ing that time frame, a tree that coun­cil di­rected to be pre­served dis­ap­peared from the prop­erty, which com­pli­cated the pro­posal and caused fur­ther de­lays.”

Around four months later, in mid-Au­gust, buy­ers were told the company was can­celling all pre­sale con­tracts.

The developer ac­quired the land, which sits on the cor­ner of Cam­bie Street and West 59th Av­enue, in March 2014. The sites of the for­mer Flamingo House Restau­rant and two sin­gle-fam­ily homes were com­bined and sold then for $12.5 mil­lion. Com­mer­cial re­al­tors es­ti­mate it is worth about triple that amount now.

“It’s an un­usual case, we hope,” said Anne McMullin, pres­i­dent of the Ur­ban De­vel­op­ment In­sti­tute, which rep­re­sents devel­op­ers. “It is trou­bling and we are con­cerned about these. One is one too many when you have this lack of supply. Peo­ple will not be able to buy back into another project.”

McMullin em­pha­sized she wasn’t fa­mil­iar with the ex­act fi­nan­cial de­tails of the Lan­gara West case, but, in gen­eral “with su­per high land costs, if devel­op­ers can’t get per­mits and it’s tak­ing too long, they can say, ‘I’m out.” They can stop it and sell the land. The money will go else­where. To Burn­aby, Sur­rey, the (Fraser) Val­ley or Seat­tle.”

As well, she said, “only big devel­op­ers can hold. The small and medium-sized ones get squeezed out.”

The city said “a re­view and ap­proval of fi­nal designs across all City de­part­ments cur­rently takes 12 to 14 weeks. (It) is fo­cused on re­duc­ing this av­er­age re­sponse time, how­ever, the re­sponse to the fi­nal sub­mis­sion for this spe­cific project falls within that av­er­age time frame.”


Developer Vi­va­grand De­vel­op­ments blames per­mit­ting de­lays and ris­ing con­struc­tion costs for a de­ci­sion to can­cel a pre-sold con­do­minium project at 7615 Cam­bie St. The per-square-foot mar­ket price for con­dos has dou­bled since the first buy­ers were...

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.