Developer asks city for second extension on $10-million fee
Vancouver council is being asked again to grant an extension to a major real estate developer that's on the hook for a $10-million fee to the city.
Anthem Properties was required, as part of rezoning for a 33-storey, 127-unit West Georgia Street condo development, to pay $26.1 million for what's called a community amenity contribution to offset costs to the city resulting from the project.
Anthem paid more than $15 million of the total, and the city allowed the remaining $10.4 million, the final 40 per cent of the contribution, to be deferred until the first building permit was given the green light.
Last June — just over two years after the rezoning was approved in principle and just over a year after the bylaw itself was approved following a public hearing — council voted to defer the outstanding balance until the project reaches Stage 2, or two years after enactment of the bylaw, whichever came first.
A Stage 2 building permit refers to project works from foundations to ground level, while Stage 3 means site works above grade, including structures.
Anthem is again citing “market uncertainty from interest rate increases, slow condo market sales/ conditions, coupled with unprecedented increases in hard costs.”
Council's risk management committee and the city manager are recommending that a second deferral be approved, and staff have agreed to work with the developer to amend or replace all legal agreements, covenants and financial securities in place for the outstanding balance.
“Staff have carefully considered this request and are of the opinion that accepting the modification would support the timely delivery of housing while ensuring satisfactory payment of the … outstanding balance,” said a report on the request going before Vancouver council on Tuesday.
The deferred payment is being charged interest from the date of the rezoning approval at prime plus two per cent.
Anthem Properties is planning the tower on the former site of a Chevron gas station near the entrance to Stanley Park. The property at the corner of West Georgia and Bidwell was purchased in 2017 for $72 million, according to Business in Vancouver.
When the first deferral was requested, Anthem didn't answer questions about why an extension was needed. But Michael Geller, a property developer and real estate consultant, said at the time it might be a sign of things to come in the Metro Vancouver housing market because of rising interest rates and development costs.
“There's a lot of projects on the back-burner right now,” said Geller.
“No one should feel sorry for these developers, and I don't mind saying that. But I do think it's helpful to at least acknowledge these realities. Interest rates have increased so much in a relatively short period of time and construction costs have increased.”
Anthem was founded in Vancouver in 1991 and has been active in dozens of markets in B.C., Alberta and several U.S. states.
The company has more than 20,500 homes in its portfolio, nine million square feet of commercial real estate, and more than 34 square kilometres of land in western North America.