Wednesday, June 20, 2018

Vancouver development fees ‘nail in the coffin’ for long-delayed project from mental health non-profit and developer

After 15 years of planning and fundraising, the Kettle, a mental health non-profit in Vancouver has backed away from their joint project with a developer to build 200 market units and 30 supported housing units for mentally ill people in Vancouver.
Tuesday marked the end of the road for a long-delayed East Vancouver development combining supportive housing, condos, and mental health facilities.
Additional development costs expected to be imposed on the project would render it “financially unviable,” said the proponents, Boffo Properties and the Kettle Society (a non-profit supporting people with mental illness).
Senior city officials and the project’s proponents both expressed disappointment in the news, but offered different perspectives on what led to it.
The city said the developer didn’t submit a rezoning application needed to trigger any formal discussion on development costs (Community Amenity Contributions). But the developer said it made no sense to file a formal application, without a strong chance of keeping its community amenity contribution costs down.
The proposed 12-storey building near Venables Street and Commercial Drive would have included 30 supportive housing units, up to 200 market condos, and a drop-in centre for people with mental health issues.
But the developer and non-profit said the municipal government recently indicated the project’s approval would require an additional cash community amenity contribution of between $6 and $16 million.
Community amenity contributions are cash or in-kind contributions that property developers must pay to the city in exchange for re-zoning rights so they can build more units. The city uses the money for parks and libraries, and has become increasingly reliant on community amenity contributions to fund the city’s capital plans.
Boffo Properties principal Daniel Boffo said that in this case the proposed project would have filled an in-kind need for the community, worth $39 million in public benefits through its supportive housing and extended drop-in centre.
“The (additional community amenity contribution amount) was the nail in the coffin,” Boffo said. “When you feel like you have a project that has everything going for us, widespread support from the community and council, you wonder if ours can’t succeed, then who’s can?
“When you’ve got projects like this, when both a market developer and a non-profit partner can work successfully together through the process and not be able to take it through the last few steps, it’s frustrating and deeply disappointing.”
Boffo said the proponents believe no additional cash contributions should be warranted, adding that the community amenity contribution policy is deeply flawed and needs to be revised.
However, city manager Sadhu Johnston said the Kettle-Boffo project’s demise was not indicative of a broader problem with the community amenity contribution system.
Johnston said there were no formal community amenity contribution negotiations because the developer never filed a rezoning application, despite the city’s repeated requests over the past two years.
“We sat down and said: ‘Put in an application, let’s get going on this.’ And they never did that for some reason, and that was a bit of a quandary to us.
Johnston said he didn’t believe Tuesday’s outcome had anything to do with opposition to the project from some groups in the neighbourhood over the years.
“We had a very, very clear mandate from council to make this project happen and we did everything we could, and we’re disappointed that they’ve decided not to pursue it anymore,” he said. “We’re disappointed they never even put in an application, to be honest.”
In response, Boffo said: “After everything we’d been through to get the project this far, Kettle and Boffo weren’t prepared to submit a rezoning application unless we had confidence that the project would have a strong chance of success.
“Multiple meetings, pro-forma reviews and discussions in recent months made it clear to us that the city wouldn’t consider a rezoning without an additional multi-million cash (community amenity contribution) — one that rendered our project financially unviable,” Boffo said. “The rationale for submitting a rezoning application under these circumstances just wasn’t there.”
In a letter sent Tuesday to the mayor and council, Keough said the cancellation “will impact the most vulnerable residents of our community.”
“Vancouver city council committed to a housing policy that nurtures a more compassionate, diverse and inclusive community where neighbours care for and about each other. And yet, in practice, city staff were unable to make our project — one that enjoys both council and community support — work,” Keough’s letter reads.
“In over seven years of discussion with The Kettle and Boffo, the city had not indicated that an additional community amenity contribution would be warranted after the public benefits from this project were delivered.
“We hope the city can find a new approach to ensure innovative partnerships like this can move forward in the future.”
As for the Kettle Society, which provides drop-in support for about 5,000 individuals with mental illness a year, the project’s cancellation means sticking to a facility in dire straits.
“It’s small, it’s packed and the air conditioning broke yesterday because the building’s getting older,” said Keough. “We often don’t even have enough room for people to sit. It’s not conducive when you’re already very distressed in your life to be in a cramped space.”
Keough said she has received questions about the project from community members on a daily basis. And increased demand has brought a greater need for supportive housing in the area.
“We had hoped that those units would go to some of our seniors. We have a person living in a park on Commercial Drive who is 78,” Keough said. “There’s long-term members who have been on the waiting list for years to get supported housing.”
News of the Kettle-Boffo project’s cancellation happened just as the city’s senior housing staff were attending a council meeting, in which the agenda was packed with measures intended to tackle the housing crisis.
A report last month from the C.D. Howe Institute called Vancouver one of the “most restrictive regions in Canada” when it comes to development. The authors suggested that excessive regulation proved to be barriers to housing supply.

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