Removing the Georgia and Dunsmuir viaducts may have a stronger business case than first thought.
Bing Thom Architects principal Bing Thom recently walked Business in Vancouver through a rough business case for removing the viaducts. (See False Creek Beach Blanket Bingo” – issue 1122; April 26-May 2).
Brent Toderian, the city’s director of planning, hints that Thom’s estimate of the city netting $200 million in public benefits might be low.
Thom believes it could cost up to $100 million to remove the viaducts and reconfigure sewers, streets and other infrastructure.
On the plus side, he said the city could generate $150 million by selling its 10 acres underneath the viaducts and by extracting a further $150 million in community benefits from developers who would build on that land.
“We should always be careful about back-of-napkin assessments in terms of cost,” Toderian told Business in Vancouver.
He would not comment on the estimated $100 million cost to remove the viaducts or the estimated $150 million sale price for the 10 acres underneath the viaducts.
But he clarified how much money the city tends to extract in development cost levies and other benefits.
“We negotiate, on average, between 70% and 80% of the land lift, which is the difference in value of the land before and after zoning, after you factor in a 15% reasonable developer profit,” Toderian said.
Thom estimated that towers built on the 10 acres of land beneath the viaducts could accommodate structures with a value of about $275 million.
The city would therefore assume a developer profit of $41.25 million. If the city were to extract community benefits of about 75% on the remaining $233.75 million worth of value, that would total more than $175 million. That’s more than $25 million more than Thom conservatively projected.
One wrinkle is that Toderian said the door would be open to consider a wide range of potential uses for the land if the viaducts were removed.
“It’s probably premature to assume towers,” Toderian said.