Latest changes come in response to the COVID-19 pandemic
VANCOUVER — The ongoing COVID-19 pandemic and its impact on local government budgets continues to evolve. The latest evidence of that came this week when Vancouver City Council members voted to approve two amendments to their agreement with Holland Partners Group for the development of a new mixed use building on the long-vacant Block 10.
The parcel of land at 1000 Columbia Street is slated to give way to a 154-foot tall tower, which would be the new headquarters for Holland, along with 150,000 square feet of office space, 12,000 square feet of retail and restaurant space, and 105 residential units.
The council had previously approved two amendments to its developer agreement with Holland. One of those provided for property tax credits in the amount of $772,000 over eight years, in exchange for an agreement to make 20 percent of the residential units inside the building fit within the definition of affordable housing.
The third amendment, approved Monday, allows Holland to extend its closing deadline by a month, which the company requested due to unanticipated issues raised by the coronavirus pandemic. That amendment also allows Holland a small window to escape from their obligations in the event the COVID-19 situation escalates further.
In exchange, Holland is increasing its security deposit with the city from $250,000 to $500,000, and allowing the city to hold the security deposit through the issuance of a temporary certificate of occupancy (rather than requiring the city to release the security deposit after proof of $5 million of improvements as currently agreed).
“So greatly increasing the duration that we could hold that,” explained City Attorney Jonathan Young, “providing more financial security for the city that the project is, in fact, coming to fruition.”
Young noted that Holland has already submitted architectural plans for the building, along with filing permit requests for the first two floors.
The fourth amendment gives Holland the option to purchase Block 10 outright for $3.3 million, rather than signing a 99-year ground lease that was in the original agreement.
The city’s Chief Financial Officer Natasha Ramras, noted that the plan would give up approximately $1.1 million over the life of the lease, but it would have taken approximately 40 years for the city to realize the $3.3 million from an outright purchase.
“The environment over the last few months has changed pretty significantly,” said Clyde Holland, the company’s CEO and chairman. “And being able to respond to those changes in a way that keeps this project on track, and we can bring the quality building and home for us in a building that we can all be proud of to the city, is something that we’ve invested a lot of time and energy to bring together.”
Holland said the purchase of the property, if agreed to by their creditors, would give them more flexibility with the project, but also help to infuse some cash into the city’s general fund at a time when they’re facing a massive budget hit from the pandemic.
“There is reasonable assurance from the city negotiating team’s perspective that Holland is committed to building the sort of building that has been put forth to the council for consideration over the past year,” added Young.
Despite the challenging environment, Holland said they have continued meeting with lenders, and have the equity needed to get the development off the ground. They hope to break ground sometime in the next month.