Friday, August 24, 2012

A walking tour of the Olympic Village

This morning, Sam Cooper of The Province took me up on my offer to do a walkabout in the Olympic Village to see and hear firsthand my suggestions to enhance the marketing program now underway in the community.

We discussed 12 suggestions that I made almost two years ago when I thought Millennium and the City were not doing everything they could to accelerate the sales program.

While some of these items have been addressed, unfortunately many have not. The following are some of the things noted and discussed during this morning's walkabout.

Entry to the neighourhood along Columbia
For many potential buyers, their first approach to the community by car or the Canada Line is along Columbia Street. This is what they find.
If they walk further along Columbia Street, this is what they see.  It doesn't, in my opinion create a positive impression.

Why do residents have to stick paper signs with their suite numbers on windows? Surely the developer can offer coordinated stick on numbers or maybe even something better. Again, this detracts from the attractiveness of the project.Similarly, rather than allow people to stick signs on building facades, why not install some community notice boards? This is a sign of bad management

If the potential buyers are driving, which is likely the case for many, they will have a hard time finding a place to park. Both the photographer and I had this problem at 10 am on a Friday morning, even though the Sales Centre was closed. All the on-street parking was either being used, or restricted. After driving around a couple of times, the photographer directed me to the underground parking he had discovered by chance.
After some difficulty finding the pay station, I read it was broken with this sign stuck to it.  Surely while we are encouraging customers to come to the new commercial operations, or visitors to the Presentation Centre, the City should reconsider its decision to charge for parking.  Instead of this sign, how about a sign saying 'Free Parking: Thank You for visiting and supporting our neighbourhood'?

I would also again recommend that the large gravel area along First Avenue near the Sales Centre be converted to Sales Centre parking.  (The City Manager and Jeff Lee will recall I got quite upset two years ago when I learned the city was towing the cars of potential buyers from this area!)

Town square maintenance
Walking around the Town Square potential buyers are attracted to the views and yes...the large birds. But they can't help but noticed cigarette butts and dirt underneath these often photographed birds and elsewhere throughout the Square. Surely it would be a simple thing to sweep the area on a regular basis.  And yes, remove the weeds growing through the pavers and around the benches.

Speaking of seating, I would remove the awflul yellow benches and replace them with something simple. They are ugly, collect water and graffiti and detract from what is a very nice space.
I would again suggest that the large green electrical transformers be wrapped in graphics as they often are elsewhere in the region. Perhaps the graphics could inform visitors that OV has been awarded LEED Platinum status. Put the logo on one of the boxes, along with other good news stories. And reconsider my old idea to put some food carts in the square to animate it, and provide additional amenity for visitors and potential buyers.
Outside the Presentation Centre
Again, everyone who has ever sold real estate knows you do what you can to improve the appearance of the product whether it be a house or a neighbourhood.  While I am the first to admit we often overlook things that we see every day, I can't understand why steps away from the Presentation Centre the public boulevards must look like this.

Building entries
Decades ago, Andre Molnar taught many of us the value in dressing up entries, often by simply adding flowers around the front door.  I thought of this as I walked by the oftentimes barren apartment building entrances throughout the community.  They are just not inviting and could benefit from some attractive planters or other measures.

(At SFU's UniverCity, inspired by Molnar and other community developers, during the early stages of neighbourhood marketing, we placed crates of fresh fruit and vegetables outside the corner store to enhance the look of the mixed use Cornerstone Building. (The operator of the store refused since he maintained the produce kept getting stolen or rotten before sale!)  You do what you can!)

The social housing
Over the past few years, there has been much discussion about the social housing at the Olympic Village. Given the potential financial losses that I estimated the City would incur many years ago, I advocated the sale of 126 social housing and related 126 market rental housing units as affordable housing. The city decided against this idea. When I was subsequently told the Portland Hotel Society might manage the social housing, I publicly stated that 'hard to house' people would detract from the marketablilty of this neighbourhood.While some tried to discredit me by suggesting I was opposed to mixed income communities, this was not the case at all.
The fact is, neither the Portland Hotel Society nor any other non-profit organization was selected to manage these units. Instead a cooperative housing organization is managing the buildings on a special arrangment. I raise this point since I wondered this morning what is happening to a barren grassed area outside the social/rental housing units. It looks quite sad at the moment. Is there supposed to be play equipment installed?  Is it intended for some other purpose? To my mind it certainly doesn't add to the neighbourhood. (NOTE: I have subsequently been told that this is a City park, not part of the social housing.  It was intended that a large piece of industrial equipment be installed to celebrate the area's industrial past, but this is on hold for financial reasons.)

Two other buyers' concerns
I don't know if the marketing team has done any exit surveys, (if not, I think they should), but from my discussions with many potential buyers, two factors are affecting their potential purchasing decisions. They are:
a) concerns about building construction quality and deficiencies; and b) the long term performance and operating costs of the various sustainability features.

I am told by the project publicist that these problems have both been worked out. If this is the case, there is still a need to share and promote this information. I would suggest that highly respected third parties be asked to inspect and investigate and provide independent reports to offset these concerns. Otherwise I maintain some price adjustments may be required for some of the units, especially as the neighbouring buildings are completed and more units come back to market in this emerging part of the city.

In conclusion,
I recognize that the look and upkeep of a neighbourhood is just one factor in any potential buyer's decision. But it is a factor that could be relatively easy to address. As I believe these photos demonstrate, the Olympic Village neighbourhood needs more attention to its grounds.

There is also a need to address the oftentimes mentioned concerns about construction quality and sustainability features.

However, the neighbourhood is now greatly enhanced by Urban Fare,Terra Breads and Daniel Frankel's new wine bar. People are enjoying the outdoor patios and while the Square is occasionally used, it should be animated much more than it is, especially in the fall.
The drugstore will soon be opening bringing more people into the neighbourhood and one day the Salt Building will be occupied. (I still maintain additional signage or graphics should be added to this building so that people know what might be coming.)

While the Olympic Village is intended to be a sustainable walkable community (and I compliment the city on the audio tour), parking is becoming a significant problem that needs to be addressed in a much better fashion than it is right now. Otherwise, I maintain this will affect traffic to the Presentation Centre and sales performance.

As an architect/planner/developer who has been involved with a number of large scale communities including the original phases of the South Shore of False Creek, Bayshore and SFU's UniverCity; and as a taxpayer and proud Vancouverite, I want to see this neighbourhood succeed. It has a lot going for it, but some things are being neglected, years after they were first pointed out. This is no doubt contributing to my frustration. More importantly, they are contributing to what I consider a less than stellar sales performance.

But I hope that I can now stop writing about the Olympic Village; and if I write about it two years from now, it will be to point out what a complete and happy neighbourhood it has become, and how the next phases of South East False Creek are being creatively planned.

 I hope these observations will be helpful to the team responsible for the project. If I'm off base, I invite readers or those involved to tell me (publicly or privately) and I'll happily respond.

Wednesday, August 22, 2012

Some unsolicited advice on the Olympic Village

This week the Olympic Village was back in the news as a result of the release of another report by the Receiver, leading to a story by Frances Bula in the Globe and Mail.  She also posted a blog entry on the topic which attracted a few comments.

If I had any sense, I'd do what Bob Rennie asked me to do and 'put a sock in it'. But I don't think the team responsible for the marketing of the Olympic Village is doing everything it can to sell out the community, and feel compelled to share my views in what I hope will be seen as a positive gesture.

The following are comments I posted on Frances' site.

I am pleased the village is coming to life and I know that many people who have bought there are very happy with their purchases. I encouraged some people to buy since they were buying penthouses and very prime units at prices well below the original prices and below what they would have to pay in Coal Harbour, or other waterfront locations.

I think the OV and other False Creek developments have the potential to be much better neighbourhoods than Coal Harbour. South East False Creek will be a wonderful neighbourhood one day.

That being said, I remain concerned about the city’s financial picture. Frances, you said the sales are happening faster than anyone expected. This simply is not true.

With respect to Jesse’s comment that the previous $462MM outstanding debt included the outstanding land payment, my understanding is that the $462MM debt does NOT include any of the outstanding land payment. The outstanding land payment is regarded by the receiver and the City as an ‘aspirational payment’ in the order of $173MM and is never going to be repaid. But it is not a loss :-)

This would not be a problem if the money was all ‘profit’to the city, but my understanding is that most if not all of this amount has been spent on the infrastructure, including theshoreline, the environmental features, the community centre, etc. Indeed, many items were upgraded in anticipation of this big land payment.

Now there’s no use crying over spilled milk…this is not the fault of any one person or any one political party…but I do think the city should be doing everything it can to sell the remaining units (especially the less attractive units) in the not too distant future for a number of reasons. 

Firstly, there are still unsold units in surrounding buildings that are nearing completion, and many of the units Rennie Marketing and other developers/marketing firms sold in neighbouring buildings will soon start coming back onto the market. Why?

Because they were purchased by investors who now realize that they are not going to realize the capital gains they hoped for, and they may not even get the rents they were hoping for.

While these units do not have the sustainability ‘bells and whistles’ nor the cache of the Olympic Village, they are going to be real competition and appeal to many potential OV buyers.

I fear these resales, and the unsold units will be coming onto the market at prices below the current OV prices.

To address this competition, I would urge the City to be creative with some financing programs….I know….I’ve made the same suggestions before…but the City can offer financing programs that other developers or investors can’t offer. Maybe it is time to consider shared equity, silent second mortgages, and other forms of fettered ownership to move these units, without having to significantly reduce the prices.
That being said, I believe the market is telling us that while the better units are very well priced…perhaps under-priced in some cases….many of the less attractive units with awkward layouts are over priced.

I know the City and marketing team will be furious with me for saying this, but I think it must be said. I’m happy to back up my allegations and know that many other real estate consultants and developers agree with me.

So the City should reduce some prices now to to sell units rather than hold onto them for maybe years. Altho the City’s borrowing rate is very low, there are holding costs, and the city is not even getting property taxes. Furthermore, empty units lead to other problems.

On a different matter, I also feel that the City is not doing everything it can to show off the area. The town square is looking tired…there are weeds growing through the pavers…the banners are starting to fade…the electrical boxes that I was assured would be covered with colourful murals are now a dull, faded green. There’s no excuse for not doing something creative here.

The benches with the awful yellow/white sitting surfaces appear discoloured and some are covered in graffiti…whoever designed these should be shot…they’re just awful!

As you walk down the streets many of the hedges in front of unsold units need trimming…they look wild and unkempt…other plantings are dying and not being tended to…and there are weeds and garbage piling up.
Do these things discourage people from buying…it’s hard to say…but all of these things do affect how the area is perceived. I personally think it is important that the area look as well maintained and attractive as possible.

Moreover, I just don’t understand why this is being allowed to happen. The receiver has been paid $4.2MM according to Frances’ story. For this money his team should be pulling out the weeds.

Finally, more effort should be made to let people know what’s coming to the remaining empty spaces. While some do have colourful signage, many do not. In Ireland, where they have lots of empty storefronts, a company has created clever murals that give a visual illusion of what the empty space would look like if it was tenanted.

This would be appropriate for the Salt building which today is an empty box. I’m told something is coming, but it’s not apparent to a visitor…at least it wasn’t apparent to me when I was there last Tuesday.
So I apologize for the negative tone, but hope these comments will perhaps draw the attention of those in positions of influence. I and other real estate consultants and marketing consultants I know would be happy to walk through the project with the Receiver or City staff or the marketing team to point out the things we think should be addressed in order to accelerate the sales program.

I think it is important that the remaining units be sold in a timely fashion, because if they are not, I worry that the City many may be tempted be simply rent out more units, especially after the HST is withdrawn.
While this will have the affect of filling the project and allow planning for other phases to progress, it will also mean a much bigger financial hit. I understand the city has already taken the Receiver’s advice and rented out some of the condos…but this is a very expensive way to work out of the problem.

As a taxpayer, I would not like to see the city rent out any more units.
I hope this is helpful.

Thursday, August 16, 2012

Calculating Community Amenity Contributions to Finance Growth

There is a discussion taking place in many municipalities around the topic of how best to determine the payments by developers when they are undertaking new developments, especially those involving the rezoning of land.  This discussion is also happening on Frances Bula's Blog, following a recent story she wrote for the Globe and Mail

Many of the readers of Frances' blog seem to confuse, in my opinion, the question of whether developers should pay CAC's, or the amount of the CAC's, with the methods used to determine the amounts. This prompted me to draft the following comment on the Fabula Blog, that I have decided to reprint here.

The key issue to my mind is not whether community amenity contributions and development cost levies should be collected, or the amount of the payments…it is how should they be determined?

Right now, in many neighbourhoods in Vancouver and other municipalities, CAC/DCL’s are clearly set out, based on a determination of the community needs and the cost of financing growth. They are generally expressed on a square foot basis and known when a developer purchases a piece of property. There are some problems with this approach that need to be resolved, especially when non-profit and charitable projects must pay the fees, but in principle, I do not object to this approach.

Where the problem arises, in my opinion, is when the CAC/DCC’s are not predetermined. Rather they are calculated on a case by case basis, not based on the cost of providing services or financing growth, but rather on the ‘value’ of the land before rezoning, and the ‘value’ of the land after rezoning. Again, this is not happening just in Vancouver. It is happening in other municipalities that are copying Vancouver.

I am not making this up!

I put value in quotes since it is often a very subjective thing, especially when a rezoning results in a new form of development, or development in a new neighbourhood, and there is uncertainty as to what might happen in the future.

Even the city’s best appraisers will admit that there are many variables affecting value, both before and after rezoning, and a ‘good’ appraiser can assist the landowner/developer in his negotiations with the city or a municipality to achieve a lower number.

I am not making this up.

At one time, the city calculated the difference in value or ‘lift’ relying in part on the price paid for the land. Staff requested copies of Purchase and Sale Agreements. However, this created problems when sites were purchased at too high a price, as was the case back in the 90′s for a property I rezoned on West 41st. More recently, we witnessed the phenomenon along Cambie Street where some inexperienced developers paid much too much for the land not understanding that the city would be expecting additional payments.
Today staff generally ignore the price paid, or claim to ignore it, and simply look at ‘appraised value’ before and after rezoning.

The problems with this entire approach are too numerous to list. However, the net result is that many good developers have decided not to play the game and have moved their activities to municipalities that offer greater certainty. (Burnaby, Coquitlam and Richmond come to mind along with others.)  They know it is too difficult to assess a project’s viability when you don’t know whether you might have to pay millions to the city in CAC’s based on ‘lift’.

Some developers, who I won’t publicly name, but are well known in the industry, have managed to determine exactly how to play the game. They often come forth with a variety of ‘amenities’ that invariably cost much less to produce than the value ascribed in staff reports, and are confident enough in their relationships at the Municipal Hall, that they can buy sites and take chances that others pass on. Invariably they succeed.

I am not making this up!

Moreover, let me clarify that this happens under all political jurisdictions….In Vancouver it is not a Vision vs NPA or COPE issue. Indeed, as most industry insiders know, some developers are equally adept at working with any administration!

Now, everyone knows that sometimes property values go down as well as up. They must be wondering what happens in such cases. If the city calculates a $4M CAC based on certain assumptions and the assumptions change, does the city give the developer some of his money back? Of course not!
Although in the past the city has ‘helped’ at least one developer when faced with such a situation. While this is well known in the industry, it is not talked about publicly.

No, I am not making this up either.

So…while fixed predetermined CAC/DCL’s may not fully address the vagaries of the market, along with its ups and downs, this would be a much fairer system in the minds of most knowledgeable real estate professionals.  Sure, it would result in less work for the appraisers, and less work and less bonuses for some real estate and development consultants who often assist developers going through the process. But it would result in a more certain, equitable development approval process.

And believe it or not, a more certain, equitable and less arbitrary system would not only benefit the city and developers, it would benefit neighbourhood organizations and future buyers. But that’s another story!

Tuesday, August 14, 2012

Blooming Chicago and not so blooming Vancouver

Recently there has been a lot of discussion about the condition of Vancouver's streets and parks.  Many people, myself included, do not think they are as well kept and attractive as they used to be.  I have written about this before...Vancouver needs a good spring cleaning.... and there was my recent post regarding the weeds along the False Creek Seawalk.

One of my friends who I greatly admire often tells me that I am too hard on my home town.  Vancouver has so much going for it, especially by international standards. He thinks I should refrain from being so critical.  He may be right.

But I found myself thinking about the look and feel of Vancouver's streets on my recent trip to Chicago. Why? Well just take a look at these photos taken in their downtown.  Now I realize Chicago is a major, world class city, but we want to be a major world class city too....and the greenest city in the world to boot.

So I would like to see us do more to beautify the downtown. We don't have to do as much as Chicago...its urban landscaping has developed and expanded over many years. But perhaps we can start with the Art Gallery forecourt.

Now, as a former Trustee of the VAG, I know the gallery is short of funds, and there is some question whether this space is Provincial or City territory. But surely we can do better than this...I'm frankly embarrassed every time I walk by it...and I'm sure many other Vancouverites are too.

If neither the City nor Province want to spend the money, maybe they can invite some citizens or a corporation to beautify the space in return for short term naming rights...just a thought. I'm sure there are other ideas to improve the area in a cost effective way.

If we can't re-do the front courtyard, surely city staff can do something about this 'planter' on Georgia Street. And the weeds along the street.  This is not a question of's a matter of attitude, in my opinion.

To be fair, the City has put hanging baskets along the Granville Street Mall that add to the area, and there are some lovely gardens at Denman and Beach and elsewhere. But compared to Chicago, or Richmond, (just check out No 2 Road and Gilbert for two examples of what a small amount of money and care can accomplish) or Trail BC, we have a long way to go.  Perhaps Sadhu Aufochs Johnston, who came from Chicago and is now Vancouver's Deputy City Manager responsible for the Greening of the City, will take this on as one of his projects :-)

Monday, August 6, 2012

The best and worst of America

It is only 65 miles from Gary Indiana to Lake Bluff Illinois, but these two communities represent two extremes in contemporary America that I experienced following a recent trip to Chicago to attend a Board meeting at the Adler School of Professional Psychology.

I visited Lake Bluff on the suggestion of several Board members when I told them I was interested in seeing attractive residential communities in and around Chicago. 

I visited Gary since there was absolutely no information whatsoever about it in any of the brochures we had picked up in the Indiana Tourist Office and I was curious. Surely this waterfront city had some attractions that would appeal to a tourist, I thought. I didn’t stay long enough to find out. Driving along Cline Avenue, I was immediately struck by a parade of abandoned and neglected fast food outletsand other businesses lining the street, as well as grand old buildings in disrepair. It reminded me of the disturbing images of Detroit that circulate on the internet; grand old buildings literally rotting, with weeds growing out of windows, roofs and chimneys.
We stopped at a gas station for directions to the city centre and the attendant did not seem to understand our request. “Here?” he asked. “You want to go downtown here!” So we drove on, past a few grand old apartment buildings that were occupied, but many others that were in total disrepair.
Eventually we arrived in what was once the downtown, but most of the large buildings were all abandoned…a museum, the convention centre, the library, a large multi-story apartment building. Even a grand old church was in ruins, not unlike the ancient structures we saw in Ireland a month ago. The only building that seemed looked after was a relatively new baseball stadium.   It was all quite surreal. 
Weeds filled vacant lots strewn with old cars. Weeds were growing through the pavement and sidewalks along both sides of the streets and collecting garbage.  What had happened to this city? Why was this allowed to happen? Where was the sense of civic pride that surely once existed in the town?I subsequently did some research only to discover what I suspected. Gary Indiana, home of the Jackson Five, was once a vibrant town established by US Steel in the early 20th century. It had a population over 200,000 in the 1950’s with many grand buildings. However, with the decline of the steel industry the jobs ended and the population had declined to less than 80,000. The whites fled the city and at one point it had one of the highest concentrations of African-Americans and the highest crime rate per capita in America. Grand buildings were left to decay and then demolished. Today it is regarded as America’s Ghost Town and has been compared to post evacuation Chernobyl. (I found these haunting interior shots on one of a number of sites on the internet illustrating the desolation of the town.

Will Gary ever recover?  The situation seems so hopeless. But even if it does recover, it will never be as attractive as the small village of Lake Bluff, one and an hour drive to the north.

If Gary Indiana is representative of the worst of America, Lake Bluff is the exact opposite. Also set along the shores of Lake Michigan, it started off as a vacation town for Chicagoans. Today it is a delightful residential community of about 5700 people that was recently voted by Coastal Living Magazine as the fourth happiest coastal community in America. Perhaps not surprisingly, the median income is about three times that of the state of Illinois, and the median house prices, at around $800,000 are three times the state average.

One of the first things that struck me was the number of young children playing in the streets. I was also struck by the variety of beautifully maintained properties with a mix of old and new houses of various styles.  Many were adorned with American flags which did not look at all out of place!

As I stopped to take a photograph of a large new house designed to look like a large old house, I chatted to a local resident out walking her dog. When I commented on how beautiful the town looked, she proudly offered to take me to the local museum so that I might learn more about it history, but feared it might be closed. She mentioned how many of the homes had started as cottages that were subsequently winterized and converted to permanent residences. It had been home to the Swifts (of meatpacking fame) and other notable Chicago families.

The village centre was quite small, but I noticed a real estate office in a new building designed to look like an old building and decided to get out of the car and take a look in the window. Although it was after closing hour, I noticed some people inside so tried the door.  I was warmly greeted by the staff who were enjoying a glass of wine and invited me to join them.  I did.It turned out that a nearby restaurant was being featured that evening on a PBS television show called Check, Please and they were all invited to participate. But first they poured me some wine and started to tell me about what many consider to be a well-kept secret…Lake Bluff.

Lake Bluff is the type of community where most of us want to live. There is a high level of civic pride and it offers both a small town community feel with access to big city amenities. It also has a significant recreational component, as evidenced by the number of signs on houses telling visitors ‘gone to the beach’. While the homes are very attractive and as previously noted three times the state  prices, at a median price of $800,000 they are well below the price of a comparable home in Vancouver.  Not surprisingly, the upper-end realtors were astonished when I told them the prices of Westside Vancouver 33 foot lots, adding that the smallest lot in Lake Bluff is 50 feet.

I left the real estate office armed with brochures and a book and video describing the village’s history and features.  I plan to go back and check out the restaurant in Check, Please. If you want to learn about Lake Bluff’s ranking in the Coastal Living survey, and the other top 14 seaside towns in America, you can find them here

Leaving Lake Bluff I travelled through nearby Lake Forest, another affluent, well-kept community, with perhaps the most impressive high school buildings I had ever seen. I stopped off at the Deer Path Inn that had been suggested as a good place to stay. It was like being back in England.  The Inn was completed in 1929, a significant year in American life, and was styled after The Manor House (c. 1453) located in Chiddingstone, Kent, England.
The nearby town centre of Lake Forest is an attractive pedestrian area, built around the train station that allows local residents easy access into the City of Chicago. As I wandered around, I couldn’t help but think this area represents what so many people work hard to achieve; a friendly safe clean community with a high level of civic pride. Many of the realtors I met in nearby Lake Bluff had grown up in the community and chosen to stay there. Their children had gone to the nearby schools and no doubt many of them will remain in the area.

I wonder how many of them have ever ventured one and a half hours south to Gary, Indiana. They would be horrified with the other side of America.