The penthouse balcony of Cape Development Corp.’s 26-storey Pacifica tower on the Nanaimo waterfront during a recent visit offered a panoramic glimpse of the many shovel-ready projects boosting the city’s prospects.
Downtown is no longer down at the heel in Nanaimo as an eclectic mix of shops moves into quarters formerly occupied by pawnshops and strip clubs, while stimulus funding from Ottawa is spurring infrastructure projects ranging from a new $22 million cruise ship terminal to a $45 million water treatment plant.
The projects must complete by the March 30, 2011, deadline to qualify for spending federal stimulus dollars, but ongoing infrastructure projects include a $25 million expansion of the local airport, a $27 million upgrade to boilers at the Harmac paper mill just outside the city in Cedar, a $37 million expansion of the Nanaimo General Hospital emergency department and $91 million in upgrades to B.C. Transmission Corp.’s local facilities.
Nanaimo council has also approved a development permit for First Capital Realty Inc.’s planned makeover of Port Place Shopping Centre. The first phase is transforming the 145,000-square-foot enclosed mall into a village-style shopping centre while subsequent phases will add office and residential components that will increase the densification and urbanization of the city’s harbourfront.
The city is also seeking a developer for the long-awaited 170-room hotel adjacent to the Vancouver Island Conference Centre, which Millennium Development Corp. was originally supposed to develop with the hope of boosting the calibre of rooms in a city with more than its share of aging motels.
Mike Lowe, managing director, British Columbia for First Capital, said economic prospects have been improving in Nanaimo and the mid-Island area generally.
“It’s been good to us,” Lowe said of Nanaimo. “If we didn’t believe that, we wouldn’t be spending all this time and money to do this.”
First Capital also owns the Terminal Park, Woodgrove Crossing and Longwood Station malls in Nanaimo and is redeveloping Duncan’s Coronation Mall.
While some renovators question the burden homeowners will bear under Vancouver’s plan to mandate environmental upgrades during home renovations (see “Green angst building for city developers” – issue 1097; November 2-8), RBC Royal Bank finds that even current renovation expenses make B.C. homeowners the least likely of any across Canada to renovate.
Just 55% of B.C. homeowners surveyed for RBC by pollster Ipsos Reid intend to undertake renovations in the next two years. The national average is 62%, with more than 60% of homeowners in every province but Alberta and B.C. intending to renovate.
The economics of home improvement is a key drag on intentions in B.C., according to Kevin Lutz, manager, B.C. mortgage specialists, for RBC. With the average B.C. renovation project valued at $13,000, homeowners think carefully about their budgets – a fact reflected in exceptionally modest overspending. Overruns are typically 10% or less versus upward of 20% in the rest of the country.
The end last year of Ottawa’s home renovation tax credit, the introduction of the HST and flagging consumer sentiment add to the caution consumers exhibit when it comes to planning renovations.
On the other hand, Lutz suggested that a relatively mobile population in B.C. is taking advantage of a large stock of new homes to keep renovation intentions and spending in check.
“There just tends to be more newer homes available here, and people are tending to move into newer homes,” he said. “You move into a new home, and you don’t need to renovate it.”
A year ago, Jordan MacDonald and Justin Mitchell stepped out from positions at Cushman & Wakefield Ltd. in downtown Vancouver to launch a new real estate firm serving Surrey and Langley. Today, they’ve got a booming brokerage headquartered in Cloverdale and plan to triple the company’s size to 15 people within six months.
“We’re trying to build this company that’s got a very, very strong market presence, specifically in Surrey and Langley,” MacDonald said.
Frontline has partnered with residential marketing firm Braun/Allison to rebrand as it grows beyond its first-year sales of $60 million. While markets have been slow, MacDonald said growth to date is driven by demand for a brokerage familiar with and local to developers active in the Fraser Valley.
With attention turning to Surrey as the Lower Mainland’s second city – regional plans tag Surrey City Centre as the region’s second downtown, an impression Mayor Dianne Watts has touted as she’s pushed an aggressive makeover of the former Whalley neighbourhood – MacDonald said it makes sense that the new city should have its own brokerage.
While commercial and industrial sales demand is sluggish, it’s a different story on the residential side, as recent sales to BFW Developments Ltd. and others underscore.
“If you can get the product and you can put it together,” MacDonald said, “the demand is there at a specific price point and specific terms.”