Bob Mackin
The BC Liberal government waited until the afternoon before handing-down the 2017-2018 budget to quietly reveal the location for the new Liquor Distribution Branch warehouse.
Site of the new Liquor Distribution Branch warehouse in 2018 (CBRE)
It plans to move from Broadway and Rupert in East Vancouver in spring 2018 to 7003 72nd Ave. in Delta’s Tilbury district, according to a Feb. 20 news release.
The warehouse is owned by 0977221 B.C. Ltd., a numbered company held by GWL Realty Advisors. The 412,000-square foot building was offered for sublease by Gurch Ollek and Jason Kiselbach of CBRE. GWL, a wholly-owned subsidiary of Great-West Life Assurance Company, bought the warehouse in 2013 for $62.75 million from Beedie Group. Last year, the warehouse on 21 acres near the South Fraser Perimeter Road was assessed at $55.61 million last year.
The B.C. government and the insurance giant are growing ever-closer. GWL Realty Advisors is one of three primary managers of B.C. Investment Management Corporation’s $18 billion real estate portfolio, which was rebranded as QuadReal in 2016. On Feb. 20, Craig James, the Clerk of the Legislative Assembly, sent a memo at 9:28 a.m. to advise MLAs and their staff that Great-West Life would become their medical and dental plan provider on April 1, after the Pacific Blue Cross contract expiry.
The capital budget for what is officially called the Interim Distribution Centre Project rose $6 million since theBreaker revealed the plan in January after a notice of the no-bid contract was posted on BC Bid without the location or name of the landlord. The government says it will cost $57.1 million for the move, new systems and equipment, but the news release does not show the cost of leasing the warehouse for 10 years plus two, five-year options. CBRE was asking $8.20 per square foot (per annum), which would be almost $3.38 million-a-year, plus $1.2 million in annual taxes and operating costs.
Site of the new Liquor Distribution Branch warehouse in 2018 (CBRE)
The move is a major about-face. LDB had been looking last spring for 35 acres of land on which to build a new warehouse of up to 1 million square feet. LDB wanted to buy the site or lease it for at least 60 years and have it ready for occupancy in 2019. The move will happen a year earlier, but to a warehouse much smaller than originally desired.
Here is why: A source told theBreaker last fall that the interim option was taken because Treasury Board wants to take a second-look at privatizing LDB, should the BC Liberals win the May 9 election.
In 2012, the government used a new B.C. Government and Service Employees’ Union contract as the foil to cancel a controversial attempt to privatize the LDB warehouse. The government had no business case and faced allegations of bid-rigging. Leaked documents showed how proponent Exel Logistics, in its own words, tried to use its lobbyists’ connections with then-liquor minister Rich Coleman to acquire LDB.
The aging East Broadway site sold for $37 million in 2014 to prominent BC Liberal donor Aquilini Investment Group and three First Nations for redevelopment. The contract has still not been made public, nor has LDB revealed how much it pays to lease-back the 220,000 square foot warehouse.
More to come…
