Three years ago, the queue of realtors seeking the first units available for purchase at Millennium Water was a sign of ongoing strength in the Vancouver housing market even as the U.S. slipped deeper into its monumental housing meltdown. With more than 4,300 registered for a chance to buy suites in the yet-to-be- built Olympic Village, Rennie Marketing Systems expected to sell 80% of the 302 units offered within the first week. Prices ranged from $450,000 to $3.5 million.
A year later, realtor grumbling about the priority VIPs received on the initial units had yielded to public grumbling about the cost of the project, then running $60 million over budget and fuelling public fears of the financial risk to the city. Vision Vancouver mayoral candidate Gregor Robertson harnessed those fears to claim victory in that year’s civic election, and the city soon became the project’s financier, assuming the entire financial risk of the project to ensure its completion in time for the 2010 Winter Olympics.
Today, mere months after the Games, the grumbling has grown, with handbills heralding a tent city at the village in February 2011 to highlight the erosion of social housing in the project as Vision Vancouver grapples with the financial and political implications of Millennium Development Group’s falling behind in its financial obligations to the city.
Caught between calls to rent the units or sell them off quickly, the city faces two choices that invite financial losses unpalatable to taxpayers. Renting unsold and unoccupied units would diminish their value – when sales relaunched this past spring, prices ran from $385,900 to an ambitious $10.5 million – as would efforts to expedite sales.
Millennium Water is no InVue, a small Kelowna project that Rennie took over this past spring and successfully marketed at prices up to 40% below original pricing.
“The biggest differences between an InVue in Kelowna and Millennium Water is the sheer magnitude of Millennium Water,” said Rennie president Tracie McTavish. “The dynamics of absorption, diverse product mix and an Olympic legacy … combined with the elements of a mixed-use community create a marketing process never before seen in Vancouver and arguably in North America.”
The question now is what that combination of distinctive elements will cost the city.
Another undetermined cost stems from the bike lane planned for Hornby Street.
Vancouver councillors stayed up late last week to approve the lane’s creation in the face of strong opposition from the business community, which took exception to how city staff consulted with them on the project. (See “Business owners blast bicycle lobby’s influence at city hall” – issue 1088; August 31-September 6.)
The concern prompted the Canadian Federation of Independent Business (CFIB) to undertake its own survey of Hornby Street businesses in early September. It found that the majority support bike routes but found the Hornby Street proposal hard to swallow. The city’s consultation process compounded the discontent, with 90% of businesses surveyed distrusting the city to look out for their interests should the bike lane go ahead.
Laura Jones, vice-president, Western Canada, with the CFIB, said survey respondents allowed the association to estimate that Hornby Street businesses would suffer a 23% drop in sales if the bike lane went ahead, or an average of $6,960 per business per month. This leaves businesses wondering what the city is willing to offer them in return.
“Is it just, ‘Oh well,’ or do they have an answer? Will there be some compensation, will there be lower property taxes, will they get rid of the pilot project?” she asked. “What if these losses that we fear come to pass? Are we just road kill?”
Jones said the two-way bike lane instituted on Dunsmuir Street in June affects a smaller number of businesses but one shop cut three staff.
Similar fallout is starting on Hornby Street, with gallery owner Ron Appleton moving his family’s Appleton Gallery to Marpole at the end of October. When the city established a bike lane on the Burrard bridge last year, limiting vehicle access to Hornby Street from Pacific Boulevard and diverting pedestrian traffic, his business took a significant hit. He’s unwilling to bear further pain, and word on the street is other local businesses are also set to shut their doors.
“We have very little traffic, and, pedestrians, now forced to walk only on the west side, do not come around the corner and walk down our block,” Appleton said. “This is not how I envisioned ending a successful business after 40 years in downtown.”