The Vision Vancouver-majority city council decided to sell land earmarked for non-profit housing to a luxury tower developer at a fraction of the appraised value, theBreaker has learned.
Pinnacle International bought 601 Beach Crescent in November 2016 for $20 million, which was higher than the $8.1 million property assessment. But, documents obtained by CityHallWatch via freedom of information and provided to theBreaker, show that the land beside the north end of the Granville Bridge was appraised at $90 million to $160 million, depending on how high and dense a tower could be built on the site.
In May of this year, Pinnacle revealed its plan to build a 52-storey tower near Westbank’s Vancouver House. The Pinnacle tower, designed by Shanghai’s JYOM International, would be 535 feet, compared to the 493-foot Vancouver House. Pinnacle must also build 152 affordable housing units, worth $44.5 million.
City hall spokeswoman Ellie Lambert said the sale was structured with rezoning in mind. She called the $20 million paid a “base purchase price… but this is not the final overall price.”
“The appraisal estimations were based on two scenarios which were created to provide estimated market value on rezoning and inform the evaluation of the bids,” Lambert said in a prepared statement. “Until the developer rezones the lands and square footage is confirmed, we will not know the final sales price but we anticipate that it may well be at the higher end of the appraisal estimates.”
Nobody from Mayor Gregor Robertson’s office responded to theBreaker.
The appraisal, conducted for city hall by CWPC Property Consultants, contemplated a 425-foot or 42-storey tower, totalling 390,937 square feet or a 500-foot or 50-storey tower with 567,000 square feet. If the property is not developed in the first five years, city hall has the option to buy it back for the purchase price.
In a Nov. 21, 2016 news release, city hall said it received four offers and deemed the Pinnacle proposal “the best overall value.” But the news release made no mention of the appraisal.
The deal calls for Pinnacle to pay an extra $365 per additional buildable square foot above the current zoning. Pinnacle would owe $73 million to $127.75 million if the city approves another 200,0000 to 350,000 square feet above its current 186,641 square feet zoning. The triangular property had been zoned for a 17-storey tower, six-storey low-rise and a four-to-five storey low-rise. In its August 2016, court filings against city hall, Concord Pacific claimed city hall was breaching the original October 1999 sale agreement that included a promise for the land to be “used exclusively for charitable public purposes through development as non-profit housing units and that its designation would be maintained.”
NPA Coun. George Affleck said Pinnacle got the upper hand. He said the city should be making long-term leases with developers or developing land itself.
“I don’t think we should be selling city property, there are better ways to use city property than sell it,” Affleck said. “It hurts our long-term viability.”
Pinnacle president Michael De Cotiis did not respond to an email query.
The Elections BC database shows no significant donations to Vision Vancouver from Pinnacle, which is a separate company from major donors Rossano De Cotiis’s Onni and Donato De Cotiis’s Amacon Management Services.
The appraisal estimated a 15% profit, or almost $77 million, for the developer from a 50-storey tower with 567,000 square feet.
“It is our opinion that a developer would want to participate more in the profit in the second scenario as opposed to sharing the lift with the City of Vancouver for achieving the higher density,” said the CWPC report.
The Pinnacle land is less than a kilometre south of the controversial Brenhill land swap that is the subject of an RCMP investigation.
City hall traded the $15 million-valued 508 Helmcken to Brenhill Developments for 1099 Richards, worth $8.4 million. Brenhill built a new social housing project at 1099, with a $39 million B.C. Housing loan, to replace the one at 508 where Brenhill is building a luxury tower that overlooks Emery Barnes Park.
In 2016, three years after it was rezoned, Helmcken was worth $90.2 million.
Glen Chernen, the Coalition Vancouver city council candidate who complained to the RCMP about the Brenhill land swap, calls the Pinnacle deal “just another giveaway of our prime city-owned lands.”
“These were non-competitive back door deals,” Chernen said. “They seem to have been given away at a discount of as much as 75%.”
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