A world-class luxury Shangri-La hotel is being developed on a prime downtown site as part of a $350-million 60-storey commercial-residential tower that will become the tallest building in Vancouver

The 120-room hotel will occupy 15 floors of the landmark 664,500-square-foot project, at Georgia and Thurlow, which will also include a penthouse condominium unit with an asking price of $13 million — more than double the record $6.02 million paid for a Coal Harbour condo last fall.

The hotel will mark the Hong Kong-based Shangri-La Hotels and Resorts’ first expansion into the North American market. Renowned for its five-star quality accommodation and service, the luxury chain, founded in 1971, currently owns or manages 42 properties around the Asia-Pacific, including Australia, China, Fiji, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Taiwan, as well as the United Arab Emirates.

In addition, the group has 28 new projects under development in other locations, including India, The Maldives, Oman and Qatar.

In November 1994, during the first Team Canada trade mission to Asia — led by then-prime minister Jean Chretien and nine provincial premiers — the Canadian business delegation stayed at the Island Shangri-La in Hong Kong.

“We are very thrilled about coming to Vancouver,” said Giovanni Angelini, Shangri-La’s chief executive officer and managing director.

“It’s an exciting gateway city for Asians to come to, and is a very logical move on our part. It is a wonderful opportunity for Shangri-La to enter the North American market with this landmark hotel and our dedicated partners.

“It is an important step in the group’s expansion plans outside Asia- Pacific to develop Shangri-La hotels in international gateway cities around the world, targeting the prime North American market, plus the fast-growing outbound traffic from China and the rest of Asia.”

Following Vancouver, Angelini said the group will explore other North American destinations, such as New York, San Francisco and Los Angeles.

Although the Shangri-La group is a publicly-traded company in Hong Kong, the controlling shareholders are the Malaysian-Chinese Kuok family, whose patriarch, Robert Kuok, owns Hong Kong’s English-language South China Morning Post, one of the world’s most profitable newspapers.

The group’s portfolio also includes commodity trading, beverages, logistics, shipping, edible oil refining and plantations.

The new Vancouver investment will also mark the Kuok’s return to B.C. They were previously involved in residential and commercial property projects in the 1990s around the Lower Mainland through their company, Abbey Woods, but sold the firm’s assets several years ago to Vancouver developer Ian Gillespie.

Now it is Gillespie’s Westbank Projects that is developing the Georgia and Thurlow property, in a joint venture with Ben Yeung’s Vancouver-based Peterson Investment Group.

Yeung said he has owned the strategically-located site since 1994, and has previously turned down half a dozen development proposals.

“Shangri-La handpicked this location in a building designed to change Vancouver’s skyline forever,” said Gillespie, whose upscale Shaw Tower in Coal Harbour is nearing completion.

“Their decision speaks volumes to the business confidence shown for our city, with the 2010 Olympics on the horizon.”

Hospitality industry sources say Shangri-La’s imminent entry will mark the first new hotel brand to come to Canada in the past five years, ever since the U.S.-based Fairmont Group acquired the Canadian Pacific Hotel chain.

Inspired by the imaginary land featured in author James Hilton’s legendary novel, Lost Horizon, published in 1933, the name Shangri-La encapsulates the serenity and service for which the hotel chain is internationally renowned.

Angelini said training for its 23,000 employees is the chain’s top priority, resulting in the group earning numerous international awards and recognition over the years from guests, prestigious travel publications and industry partners.

The Vancouver facility’s 120 deluxe rooms and suites will range from 550 square feet to 750 square feet — among the largest in Canada — while other amenities are to include a 6,000-square-foot spa, three full restaurants, business centre, fitness facilities and outdoor pool, 24-hour room service, same-day laundry and valet service, satellite television, data ports and wireless broadband Internet services.

Angelini said he is aiming at achieving Vancouver’s highest year-around average room rate “above $250.” In the past several years, the Wedgewood and Pan Pacific hotels have managed to charge the highest year-around rates of about $200.

Designed by noted Vancouver architect James Cheng, the 642-foot-high Westbank-Peterson tower will also comprise 227 “live-work” units (with special zoning that allow home business operations) on floors 16 to 40, along with 66 condos from floors 41 to the top.

Realtor Bob Rennie has been awarded the marketing contract for the project.

While pricing has not been finalized, Rennie said the live-work units will range from about $375,000 to $1.2 million, and the condos from about $1.5 million to $13 million for the 9,000-square-foot penthouse, which is to include a private outdoor pool.

The building will also house an upscale Urban Fare grocery store, owned by the Jim Pattison Group.

Ledcor Group is slated to start construction on the entire project early next year. At 642 feet high, the tower will exceed the Sheraton Vancouver Wall Centre Hotel, currently the city’s tallest building at 496 feet.

The Shangri-La is targeting an opening date in summer 2007, with the live-work and condo components following about five months later.

VANCOUVER’S SHANGRI-LA

Development is about to start on Vancouver’s tallest building, which is to include a Shangri-La hotel. The chain is known for its opulence around the world (examples on left).

The 120-room hotel (right) will occupy 15 floors of the landmark 664,500-square-foot project, at Georgia and Thurlow, which will also include a penthouse condominium unit with an asking price of $13 million.

Ran with fact box “Vancouver’s Shangri-la”, which has been appended to the end of the story.

Tallest tower means big payback for city

SKYLINE I Benefits would include 57,000 new trees

Frances Bula

Vancouver Sun

One Wall Centre Shaw Tower

Vancouver’s first 600-foot tower isn’t just setting a height record.

The proposed 57-storey tower at 1120 West Georgia is going where no tall building has gone before when it comes to payback for the city, with the richest package of public gifts ever contributed through a single building.

It’s also unique in that it has generated almost no public controversy.

After a series of tussles in the past five years over tall buildings in the city — the Wall Centre tower on Burrard, the much-debated Bing Thom design for a “sparkling glass crystal spike” on Howe Street, and a recently rejected design for a 400-foot building at 550 Bute — there has been barely a murmur of opposition to the proposed hotel-live/work-apartment tower as it heads to public hearings next week.

Added to that, the city will be getting an unprecedented $16.5 million from the tower’s developers, which will go to an unusual list of benefits to the city, including a sculpture garden, 57,000 trees to be planted somewhere in a B.C. forest to compensate for the building’s carbon-dioxide emissions, the $4.5-million restoration of a 1913 church next door, and $2.3 million for the city’s affordable-housing fund.

Developer Ian Gillespie acknowledges that it’s a big chunk of money, more than has been asked of developers in the past, and that other developers might have fought the city over it.

But he said the group of people he works with decided that wasn’t the approach they wanted to take.

“We looked at this project as a once-in-a-lifetime opportunity to build a truly world-class building,” he said. “You make a little bit less money but you have a chance to do something like this. Wouldn’t it be a shame if you dug in your heels over $1 million and it never got built?”

In spite of that attitude, one that they’ve taken since the beginning of the project, Gillespie and his development partner Ben Yeung had more than a few surprises in the negotiations over the final package of city benefits.

Gillespie found out earlier this fall, on one particularly dispiriting day, that the new Vancouver city council had decided to increase the rate for development cost levies — a fee that builders pay in order to help the city cover the cost of things like transportation, housing, parks and daycare as residents are added to the city — from $2.50 a square foot to $6 a square foot and that his building would be caught by the change because the council had decided on a relatively short grace period before the new rates came into effect.

That added $2,341,092 to the cost of a project that is already in the $200-million-plus range, bringing the cost of DCLs for the building to just over $4 million.

Then, in the more recent stages of negotiations, when the public-benefit package was being calculated — that’s money over and above the standard DCL charges that certain special projects are asked to pay — one staffer suggested $3 million might be a nice amount of money to contribute to the affordable-housing fund, on top of the $1.3 million already going in through the DCL. That was also in addition to $11.5 million being put into the heritage church, the sculpture garden, the $50,000 worth of trees and other already-agreed-on benefits.

That floater was quickly quashed once central-area planner Larry Beasley, who has the last word on the city’s major-project deal-making, returned from an out-of-town trip.

At that point, the city’s real-estate department scrutinized the project’s pro forma (the estimate of costs and revenues) and accepted the argument that a 600-foot building actually costs more than twice as much money to build than a 300-foot building because of the cost of building a stronger core and hauling materials up a higher distance.

Beasley says the two sides agreed the project was gaining about $13.7 million from the “land lift” it would get when the city allowed it to add the extra height and density it was asking for. The area is normally zoned for what’s called, in planning lingo, 9 FSR, which means the building’s floor space can be nine times the square footage of the lot. (Residential houses in Vancouver get .6 FSR or 60 per cent of the lot.) If approved, the building will have 12.81 FSR.

The city will get back 91 per cent of the $13.7 million created by that land-value increase, which is considerably higher than the 50 to 60 per cent that has been negotiated on other buildings in the past.

“That’s a very good benefit for the city,” Beasley says in his understated way, although he also points out that the developers still get their margin of profit — generally about 15 per cent, Gillespie said — on all the extra units they’ll be building.

Beasley made the case with his own staff to allow the project to hang on to some of that profit.

Beasley says he wanted to leave the builders some room for the risk they’re taking. Gillespie says that Beasley also understands that, if the city wants a landmark building as it says it does, “you’ve got to leave enough on the table that the guy can build a landmark.”

The project still has design revisions to go through on its way to being a Vancouver landmark.

At an urban-design panel review in June, several panelists stressed that the building has to be more than just a conventionally lovely piece of architecture.

One comment: “Whether you like it or not, this building will be iconic. It will give identity to the city. Think seriously about it because it will be seen around the world.”

Some also added that it looked more like a slightly better version of the existing towers in the city, instead of being a symbol of a new phase in the city’s architectural future.

Architect James Cheng said there’s more design work to do even if and when the building is approved at the public hearing.

It’s already been an architectural challenge, because it had to be designed so that it doesn’t intrude on one of the city’s view cones — the sight lines that city planners established in the 1970s to protect views of the mountains.

One face of the building is actually on a diagonal because of the way the view-cone line slices the lot.

Cheng, whose design was also praised by some panelists as a “good start” towards creating an exquisite, subtle spire, has already altered some aspects. He’s introduced a crystal cube two-thirds of the way up the Georgia and Thurlow corner of the building, something that “breaks the simplicity and creates more of a focus.”

In spite of the architectural demand for a more distinctive building, the general public has been largely positive at two open houses held so far.

City rezoning planner Phil Mondor says the main concerns have been from the relatively few number of local residents on Melville and Alberni, who are concerned about shadowing or noise impacts.

As for city staff, they’re fully supporting the project.

“These proponents have approached this in what I would say is the right way,” says Beasley. “Rather than starting a fight about view corridors, they shifted their design. It’s been founded on working with public policy, rather than challenging it.”

© The Vancouver Sun 2004

CREDIT: Ian Smith, Vancouver Sun Construction continues at Concord Pacific’s King’s Landing condos near foot of Homer, where 136 units in two towers have been snapped up at prices from $600,000 to $8 million.

The Lower Mainland’s residential building boom during the first five months of the year generated a total of 22,481 person years of employment, up 57 per cent from 14,319 full-time equivalent jobs for the same period in 2003, construction industry figures show.

“That’s an additional 8,162 jobs in just five months,” said Peter Simpson, chief executive officer of the 420-member Greater Vancouver Home Builders Association.

“The largest job-creation gains were recorded in Burnaby, Langley, New Westminster, Surrey, Vancouver and White Rock.”

Statistics released Tuesday by Canada Mortgage and Housing Corp. indicate housing starts in Greater Vancouver rose 58 per cent in May to 1,852 units, compared with 1,175 units the previous May.

B.C.’s construction industry uses a multiplier of 2.7 equivalent full time jobs for one year for each new start.

Multiple units — mostly condominiums — accounted for 1,354 starts last month, a 93-per-cent jump from 702 units in May 2003.

“Greater Vancouver home builders continue to increase production to satisfy demand for new homes,” noted Cameron Muir, CMHC’s senior market analyst in Vancouver.

“Strong employment growth, low mortgage rates and rising home prices are contributing to a high level of consumer confidence in the housing market. As a result, many areas of Greater Vancouver are experiencing a boom in residential construction, with multiple units leading the charge.”

Through the first five months of this year, 8,029 residential units broke ground, up 57 per cent from 5,114 homes the previous year.

Condo starts totalled 5,694 units, almost double the 2,923 units a year ago.

On a percentage basis, the highest year-over-year increases in new housing construction from January through May were recorded in White Rock, up 333 per cent to 104 units from 24; Burnaby, up 269 per cent to 1,186 units from 321; Langley district, up 103 per cent to 590 units from 291; and Vancouver city, up 93 per cent to 1,969 units from 1,021.

Across the province, urban housing starts climbed 61 per cent in May to 2,981 units, up from 1,849 units in May 2003.

For the first five months, urban B.C. starts improved by 54 per cent to 12,723 units, compared to 8,252 units the previous year.

The new construction boom figures follow on the heels of a report by Statistics Canada on Monday indicating Greater Vancouver municipalities issued more than $1.5 billion worth of building permits January through April, a 34 per-cent increase over the same period in 2003.

In May, condo sales continued driving the region’s sizzling property market as 1,767 units sold at a record average price of $256,800.

Overall, 3,918 detached houses, townhomes and condos changed hands last month, a year-over-year rise of 19.5 per cent from 3,279 residences the previous May.

In April, a total of 4,106 homes sold in Greater Vancouver on the Multiple Listing Service, up 33 per cent from 3,095 transactions the previous April.

All-time record prices were set in April 2004 for detached houses, hitting an average of $532,500, up 21.4 per cent over $438,600 the previous year, and townhomes, reaching an average of $306,800, a 20-per-cent appreciation over $255,100.

Across B.C. in April, a total of 10,320 homes worth a total of $3.01 billion changed hands, a 50 per-cent increase in dollar volume over April 2003.

ECONOMIC EXPLOSION

An additional 8,162 person years of employment were created by the Lower Mainland homebuilding industry during the first five months of 2004 compared with the same period last year. The sector now employs 22,481 people.

Job Growth

Vancouver: additional 2,654 jobs

Burnaby: 2,422

Langley area: 983

New Westminster: 490

Surrey: 1,336

White Rock: 225

Source: Peter Simpson, Great Vancouver Homebuilders Association

RESIDENTIAL CONSTRUCTION STARTS:

WHITE ROCK

104 starts up 333%

BURNABY

1,186 starts Up 269%

LANGLEY

590 starts up 103%

VANCOUVER

1,969 starts up 93%

Ran with fact boxes “Residential Construction Starts” and “Economic Explosion”, which have been appended to the end of the story.

© The Vancouver Sun 2004

Tuesday’s decision by the Bank of Canada to hold the line on interest rates may be the last call for Canadians to make important decisions about their mortgage.

Those who wait until Governor David Dodge makes his move, most likely in the fall, will miss out on relatively low long-term mortgage rates.

Those rates increased by up to four-tenths of a point Tuesday as financing costs rose in the bond market where banks finance their mortgage lending.

With the Bank of Canada warning that higher energy prices will put upward pressure on inflation in the next several months, investors reacted by demanding higher interest rates in return for parting with their money.

CIBC announced that rates on one- and two-year house loans rose 0.4 of a percentage point, while rates on three- to five-year mortgages increased by between one fifth to more than one third of a point. The changes are effective today.

A one-year rate at CIBC rises .40 of a point to 6.85 per cent, while a three-year rate increases .35 of a point to 6.15 per cent, and a five-year rate a fifth of a point to 6.7 per cent.

The bond market has been driving mortgage rate increases for several weeks. For example, six weeks ago, the average discounted rate for the popular five-year fixed-rate mortgage was 4.72 per cent.

On Tuesday, the same discounted five-year rate was an average of 5.23 per cent. On a $150,000 mortgage, this increase means an extra $43.50 on the monthly payment, and an additional $2,610 in interest over the five-year term.

Also, with the higher rate, the borrower’s principal balance at the end of the term would be $1,067 higher.

With rates rising, borrowers have to measure their means when choosing between a fixed-rate and variable-rate mortgage, said Vancouver‘s Rob Regan-Pollock of Invis, Canada‘s largest independent mortgage brokerage firm.

For those borrowing below their means, Regan-Pollock recommends a variable rate mortgage with payments set as if they reflected a fixed-rate mortgage of between five and six per cent, in line with the prime rate average over the past decade.

“Even with rates rising, and they are expected to rise slowly, those people will have a buffer and they will still get ahead and reduce their principal.” he said.

“We are most concerned about people who are stretching to make their payments and have minimal equity, especially if they are planning children or changes in employment. For them, we would recommend a five, or seven, or even a 10-year fixed-term mortgage, where they know they can afford the payments and they don’t have to worry.”

Regan-Pollock cautions that longer term mortgage rates are likely to have stabilized at a higher level by the time the Bank of Canada increases the prime rate to which most variable rate mortgages are pegged.

“We would recommend that anybody looking to review their mortgage strategy contact their broker or financial institution now, just to make sure they know where they stand.”

For prospective buyers, or those with a mortgage coming up for renewal, it is possible to lock-in a rate today for up to four months. Prospective buyers who choose a three-year fixed term, or longer, will generally qualify to borrow more than those who opt for a variable rate mortgage.

Variable rate mortgages save money over time but borrowers have to be able to ride out any spike in interest rates.

© The Vancouver Sun 2004

Gastown’s business community hopes Vancouver‘s newest tourist attraction, Storyeum, turns its cobbled streets into gold.

Storyeum predicts it will attract up to one million visitors a year for its 70-minute underground history tour.

“It’s the flagship investment,” said Jon Stovell, president of the Gastown Business Improvement Association. “It’s going to help retail and the basic viability of the area.”

Stovell figures 250,000 new visitors a year will stroll through Gastown after leaving Storyeum.

In anticipation, Gastown retailers are extending their leases, while contemporary furniture store Inform Interiors is expanding its Water Street store.

“We feel it’s very good for the area,” said Inform co-owner Nancy Bendtsen. “Storyeum is a quality show.

Under the city’s heritage plan, developers like Stovell’s Reliance Holdings are converting buildings into live/work condos.

This week, work starts on 58 more units on the former parking lot at 55 Water Street.

Storyeum has invested $22.5 million in the city-owned site, and will lease it back for 40 years.

“There wasn’t a major attraction hook [in Gastown], outside of the steam clock,” said Walt Judas of Tourism Vancouver.

“Storyeum provides that anchor that is really needed for Gastown, and gives people a lot more reason to go there and spend time.”

Judas said Storyeum will be a great selling point to tour operators and travel writers.

“This will be one of those things that will get attention around the world,” he said.

Storyeum’s vice-president of marketing, Graeme Drew, expects more development for Gastown and more social programs for the Downtown Eastside.

“Hopefully the different merchants here on the street level are going to be able to keep some more profit in the bank,” he said.

On its first day last week, more than 1,000 people visited Storyeum despite some technical glitches, said Drew.

Senior city planner Nathan Edelman said Storyeum is part of the plan to preserve Gastown as a heritage site while restoring it as a neighbourhood.

“We’re also trying to make sure there’s opportunities for the low-income population as well, in terms of securing their housing and providing job opportunities.”

© The Vancouver Province 2004

…Yaletown Park CREDIT: Vancouver Sun File   It’s a similar story for The Shaw Tower and … CREDIT: Vancouver Sun File   The penthouse in the Carina project was sold to Americans. CREDIT: Vancouver Sun File

A growing number of wealthy Americans are snapping up luxury residences in Greater Vancouver, attracted by the area’s amenities and lifestyle, along with the value offered by their investment and the safety and security of living in Canada.

One investor from Atlanta has reportedly purchased 10 condos in Vancouver, including one of the few available units at the upscale Shaw Tower in Coal Harbour, paying $1.65 million for the 2,000-square-foot suite.

“He saw what happened to property values in Atlanta with the 1996 Olympics there,” said realtor Bob Rennie.

“Americans are buying Vancouver as a safe place to invest and as a safe place to live. They are cognizant of the fact the Vancouver-Whistler area is hosting the 2010 Winter Olympics.”

In late February, when Rennie launched marketing of Yaletown Park, an 850-unit condo project in Yaletown, among the hundreds of prospective purchasers who lined up overnight were people from Seattle and San Francisco.

Currently, Americans make up about 15 per cent of those buying smaller homes, but when waterfront properties are factored in, the number of U.S. purchasers exceeds 25 per cent, Rennie said.

Developer Bruce Langereis said Americans comprise “at least 30 per cent” of the purchasers at his two luxury Coal Harbour condo towers, called Carina and Callisto.

At the 92-unit Carina, the $3.5 million penthouse suite is owned by an American, while two other Americans bought the two sub-penthouses in Callisto, each paying about $2.2 million.

Still others from south of the border are looking at purchasing the $5.5-million penthouse at Callisto, a 128-unit building scheduled for occupancy near the end of 2004.

“Our American buyers are mostly from the western U.S., such as people from Arizona trying to escape their summer heat for six months,” said Langereis, president of Delta Land Development.

“A lot of them say they would like to stay a lot longer, but Canadian immigration will only allow U.S. visitors to stay for a maximum of six months.

“They like our cheap golf, variety of food, and everything. And our real estate prices — compared to major U.S. cities — are so reasonable.”

In September, an unidentified American business executive from Houston, Tex., purchased the 5,700-square-foot penthouse at the $110-million, 57-unit One Harbour Green residential tower in Coal Harbour, paying $6.02 million — the highest price ever for a condo in Vancouver.

In West Vancouver, about 25 per cent of all purchasers of $1-million-plus homes are Americans, particularly from California or the eastern U.S., such as Chicago and New York, according to realtor Jason Soprovich.

“They’re very seasoned and recognize excellent value, investment-wise,” said Soprovich, of Prudential Sussex Realty, who sold about $38 million worth of properties in 2003.

“About half of them are buying homes as secondary residences, while the other half are moving here permanently, either on transfer from another occupation, or changing companies.

“The U.S. market has grown exponentially over the last three or four years. These Americans are fantastic to deal with, every one of them. They’re very knowledgeable buyers.”

The heated interest from Americans seeking to invest in Lower Mainland residential real estate has recently prompted three young Vancouver entrepreneurs to sink their life savings into buying the local rights to the so-called Real Estate Book.

It has with different editions published and distributed in more than 400 North American cities.

This free reader’s digest-sized magazine showcases realtors, developers and their projects in each local market, and any edition is available to the public by calling a toll-free 800 number.

“The 2010 Olympics have put Vancouver‘s real estate market on the world map,” said Andrew Powler, principal owner of the Vancouver edition. “Foreign investors — especially Americans — are buying property in the Lower Mainland like never before.”

The Vancouver book is currently 32 pages and growing, Powler said, adding: “They’ll each be at 80 pages in less than a year.”

In the Vancouver area, Powler’s publication is available in “little green boxes” at busy intersections and outside Starbucks coffee shops, as well as at various restaurants, automobile dealerships and gyms.

© The Vancouver Sun 2004

Bruce Langereis, of Delta Land Development Ltd., shows off model of 30-storey Coal Harbour tower.   CREDIT: Ian Lindsay, Vancouver Sun

Marketing of what is believed to be Canada’s first condominium tower featuring an ecologically friendly geothermal system for air conditioning and heating water is about to be launched in Coal Harbour.

The $100-million, energy-efficient 30-storey concrete building, called Cielo, will also recycle heat given off by the huge refrigeration system of an upscale Urban Fare grocery store situated at street level.

The combined measures are designed to dramatically reduce energy consumption — particularly costly natural gas — for the project’s 140 condo units, as well as being substantially more gentle on the environment.

The geothermal system, provided by Richmond-based Earthsource Energy Inc., will cost Delta Land Development an extra $300,000 to $500,000 to install compared to conventional systems, but Delta president Bruce Langereis said Friday it will be money well-spent.

“We decided to do this out of a feeling for being environmentally responsible,” Langereis said in an interview. “We’re trying to embrace the concept of sustainability.”

Designed by Downs Archambault Architects, Cielo is being built at Hastings and Bute streets, on one of the last remaining Coal Harbour sites. It will be directly behind two other luxury waterfront towers — called Carina and Callisto — previously developed by Delta Land.

Earthsource president Lynn Mueller said to his knowledge, a geothermal system has never been installed in a residential highrise building in Canada, although it has been used in the U.S.

Mueller explained how the system works:

A series of holes are drilled about 100 metres into the warm ground below the building for water exchange pipes, with the holes refilled with soft clay. The water is at 10 C when it’s pumped through the building.

The water then flows into one or two electrically operated heat pumps installed in each condo unit that raise the water temperature up to 82 C, generating heat for the suite as well as domestic hot water.

Earthsource’s system will also recapture heat given off by Urban Fare’s constantly running refrigeration system and channel it into the condo tower, providing “free” heat for the building.

“This combination will take care of an estimated 80 per cent of the building’s heating requirements, although we’ll still need to use a small traditional gas furnace for peak loads,” Langereis said.

According to Mueller, the geothermal system will slash the expense of heat and air conditioning to a quarter of what natural gas would cost.

“As well, you would avoid 500 metric tonnes of carbon dioxide annually being pumped into the atmosphere,” Mueller said. “That would be the equivalent of planting 100 acres of trees a year for carbon dioxide reduction.”

Besides offering water, mountain or city views and the efficient low-cost heating and cooling systems, Langereis said each unit at Cielo will include quality interior finishes and high-end stainless steel appliances, along with “entertainment-sized” balconies and electric fireplaces.

Common amenities feature a rooftop spa, including a state-of-the-art fitness centre, and a 280 square metre (3,000 square foot) rooftop sundeck with jacuzzi, high-speed Internet connections, landscaped gardens, and a separate dedicated service elevator.

“You can buy a one bedroom unit but feel like a penthouse owner,” Langereis said.

The Cielo units are priced from about $300,000 for a 780-square-foot one bedroom suite, to $1.9 million for a 2,500-square-foot penthouse.

“We wanted to provide an affordable luxury product and I think we’ve done that,” Langereis said. “The market response has been overwhelming. It’s been a very positive experience. I wish we had more sites down in Coal Harbour.”

© The Vancouver Sun 2004

His office and his daughter’s school nearby, Andrew Cheng, an Olive buyer, is a Cambie believer. CREDIT: Ward Perrin, Vancouver Sun   Tomato Restaurant owner Christian Gaudreault thinks the new OLIVE/Capers development in the block north of his restaurant will change his area of Cambie for the better. CREDIT: Peter Battistoni, Vancouver Sun   Dr. Andrew Cheng says he likes Cambie’s centrality and lifestyle. The area has retained a small-town feel, although boxy developments have started to encroach. CREDIT: Ward Perrin, Vancouver Sun

When Vancouver dentist Andrew Cheng bought a thousand-square-foot penthouse suite in the new Olive development at Cambie and 16th, he was buying into the community as much as into the project.

The 40-year-old Cheng wanted a neighbourhood where his daughter would not only have access to a private school several blocks away, but also one with plenty of amenities and within walking distance of his office at Broadway and Heather.

“There’s a lot of good restaurants there and I go to the Tropika for one,” the single dad reports. “It [the neighbourhood] also has a bit of a bohemian feel, being close to the Main Street bistros, and it’s centrally located. It’s very easy to go from A to B and I don’t have a big house to take care of.

“The area was as equally important to me as the building.”

Cheng’s decision to buy there is just one sign of what many believe is the looming renaissance of a somewhat sleepy neighbourhood between 12th and 19th known as South Cambie Village — a renaissance that will be partly propelled by the Olive development itself, a $50-million, 109-unit townhouse and condominium project that will help redefine the community.

But while the high-end development will bring a lot of new consumers to the area, it will probably be best known for its anchor tenant — a 20,000-square-foot Capers Community Market, the largest Capers in the Lower Mainland.

The natural and organics food store will occupy the ground floor of the complex, which the developer says is designed for “urban gourmet” living.

Capers is expected to open in about a year, offering what the company says will be a greater range of fresh, locally produced organic and all-natural products at a time when demand for such products is experiencing huge growth.

With the pending construction of Olive/Capers, the area may no longer remain the sleepy urban village to which current residents are accustomed.

Christian Gaudreault, a long-time resident, is the owner of Tomato Fresh Food Cafe, a funky restaurant at 17th and Cambie that displays original West Coast art on the walls.

He feels the area is ready for a change and that Capers could be just the ticket.

“I think it will help the neighbourhood and expand the clientele,” he says. “There’s still empty space on this street and it’s good for us. It’ll bring more people.”

Gaudreault says that in recent years several merchants have moved to Main, where rents are more reasonable, and that Cambie needs things that get people out and walking around. “A beautiful chocolateur closed down because there wasn’t enough business.”

He cites south Granville and its high-end shops as a concept that Cambie could emulate. “We need more shops here that people can support. That creates a walking neighbourhood. It think it could be like south Granville eventually.”

Gaudreault says the area is largely single family, and that there’s a “nice feel” to the neighbourhood. “I’m a neighbourhood restaurant (and) there’s a nice feel here. This is the last portion of the west side. Main Street, no offence, is a bit of a change.”

Olive publicist Pamela Groberman is also high on the area. She bought a townhouse at Olive and plans to move from her West End condominium to Olive when it opens in January, 2006.

She says she’s getting tired of the traffic noise in downtown Vancouver and needed a change.

“I love the coffee shops in the (Cambie) neighbourhood,” said Groberman. “It’s west side with a slight edge to it and it has everything you need, like the movie theatre, the Tomato Fresh Food Cafe and a cool florist. And everything’s within walking distance. I’ll probably walk to work downtown.”

Groberman says a lot of younger professionals — most from Vancouver, but also from the North Shore and Burnaby — have bought at Olive and that most of them cited the Cambie neighbourhood as a major reason for buying. “Some of the them pushed the envelope for how much they could afford because they liked the area so much.”

Not everyone, however, is entirely pleased with the changes that the Olive/Capers development may herald for Cambie.

Lorri Troughton, who has lived there for 13 years, feels the area doesn’t need to grow. “The area’s already invigorated, although I do like Capers. But I like the feel of the area now. We have a lot of structures already and I don’t see why we need more. Cambie Street already has its own special magic.”

Take a stroll through the heart of the north Cambie Street neighbourhood — 12th to 19th — and you’ll find plenty of amenities.

Leafy streets with heritage homes branch out from Cambie, which has retained a ‘small town’ feel to it. In the main part of the village — from 16th to 19th — there are few of the chain restaurants and stores that increasingly make every place seem like everywhere.

There’s the Kino Cafe, with its live jazz performances, and Tropika, which specializes in southeast Asian food. There’s Black Dog Video, Amy’s Cake Shop and Cafe, the Dutch Wooden Shoe Cafe and the Om Vegetarian Restaurant. There’s also a neighbourhood florist.

Probably the heart of the street is the Park Theatre, one of Vancouver‘s few remaining neighbourhood cinemas.

City Square, a small mall featuring smaller boutiques in restored heritage buildings, is a few blocks north. Further north, big box retailers such as Canadian Tire and the consumer giant Best Buy plan to open stores.

City hall and Queen Elizabeth Park are also nearby.

North of 16th, however, the area loses some of its lustre, with mini-malls and their telltale bright orange metal roofs showing up.

On the west side of Cambie between 14th and 16th, a huge boxy development offers little in the way of architectural interest.

Another structure on the east side has a bare wall facing Cambie.

However, the area is on all the major bus routes, on three designated urban bike routes, and just a short drive from downtown Vancouver and Granville Island.

© The Vancouver Sun 2004

In my working day, some of my most rewarding and interesting time is spent answering questions from real-estate investors and would-be investors.

There’s not much I haven’t heard before the inevitable “what do you think?”

There is, of course, one big constant, question: when will the market crash? I invariably reply, “Feb. 28, 2005, 3 p.m. precisely” . . . I mean, what an imponderable.

There are questions that I can attempt a reply. “Is there a ‘bubble’?” (I don’t see one, but I am seeing some very poor “fad” deals).

“Where is inflation going?” (Higher!).

“Isn’t mortgage debt too high?” (Yes, but only because we increased the national percentage of homeownership seven per cent).

“Are people still able to pay their mortgage?” (Yes, because of lower interest rates debt/payment ratios are the same as in 1993).

“Which market is good to invest in?” (The one in which you negotiated the best deal for yourself.)

“Is it over?” (No, it is never over!)

I am convinced the reasons for all the questions are clear: The world is an ever more confusing place. Every year it seems to get a little nuttier.

Consumer debt seems to be soaring, stock markets crash and recover and even real estate investments, seemingly the only safe haven, now begin to worry the “yeah, but-ters“- again. I mean . . . could it continue, would it not collapse this time?

Of course, a careful study of economics usually reveals that the best time to buy anything is last year. And while funny, that is really where I would like to direct your attention. The past.

The average price for a single family home in Vancouver was $13,500 in 1961; $48,000 in ’74; $120,000 in ’82; $180,000 in ’88; and $250,000 in ’92. It is $475,000 today.

In other words, a five-per-cent down payment ($655) in 1961 would generate $474,355 in proceeds, on the sale of that average home. Tax free!

These price increases have occurred around the world — or, in those parts of our world, in which people want to live! (You can still buy a $1 lot in Shell Lake, Sask. And I am certain that there are some choice cheap plots in Siberia too.) But where people want to live and play, real estate values have soared. Soared? Soared!

But only in relation to our ever inflating dollars. The availability of money, the ease with which we can get it is the determining factor … and will be so in the future.

It is just harder to imagine today’s dollars (which seem so real to us) depreciating as much. But imagine if you were back in 1961 in your $13,500 home … could you have imagined a doubling in price … ? Or a 10 fold? A 20 fold? But this is precisely what happened.

Actually, you don’t have to go back that far. Close your eyes and imagine it’s the year 2000. Could you, then, imagining condo prices in Yaletown rising from $100,000 to $190,000 in two years Or the average single-family home in in North Vancouver rising from $320,000 to $460,000?

So, don’t worry, be happy, prices will rise . . . as long as there is excess creation of money and easy access to it.

And is there excess money? Yes! The U.S. created one trillion more dollars last year and prices for hard assets are soaring worldwide. In the U.K., for example, nine homes a day – a day! – sell over there for more than #1 million pounds, The London Telegraph report.

Will it continue forever? Of course not. No market ever goes up in a straight line forever.

That is why the individual investor should be concerned always with the immediate transaction that’s on the table, understand his or her motives and have an exit strategy.

So, what does worry me? Higher interest rates are one worry, although less so now that the Alan (Easy Money) Greenspan has had his chairmanship of the U.S. Federal Reserve extended.

Downtown condo-conversions worry me. Time shares, leased land, people who don’t do their research worry me.

But I am not worried about the astute investor looking to buy, with little to put down, in a good town — Abbotsford and Langley, Cloverdale and Chilliwack, Nanaimo and Cumberland, Parksville and Chemainus – towns which attract people . . . or tenants who pay off the mortgages over time.

There is nothing like creating unearned passive income. Nothing. It creates a self- actualized life.

As I wrote here a few months ago . . . if you can find five condos in B.C. and Alberta . . . that are selling without a down-payment requirement or with a small requirement . . . and you can . . . just five condos that pay you $800 in rent each month . . . you can own them in 18 to 20 years . . . .and with that $4,000 per month income you can pay off a million dollars.

And guess what, it matters not whether values went up or down.

Plan for unearned, passive income in your real-estate investments. Pursuit of that kind of income forces you to make the right decisions.

And don’t worry. The only statement I have consistently heard every year for 35 years: I wish I bought five years ago.

© The Vancouver Sun 2004

Businessman Brad O’Connell has bought a King Edward condominium. ‘I think this will have a positive impact on the area, which is changing.   CREDIT: Ian Smith, Vancouver Sun

KING EDWARD VILLAGE

Address: 1432 Kingsway, Vancouver

Developer: Tri Power Developments Inc.

Architect: Rostitch Hemphill and Associates

Size of project: 206 units, including nine townhomes

Price and size: One-bedroom, 561 square feet for $173,900 ($310/sq. ft.) to a 1,113-square-foot penthouse for $399,900 ($359/sq. ft.)

Strata fees: About 20 cents/sq. ft.

Rentable: Yes

Construction: Concrete

Warranty: 2-5-10 years, from St. Paul Guarantee

Telephone: 604-873-8137

Website: www.kingedwardvillage.com

Presentation centre: 1432 Kingsway, Vancouver; open daily 12 – 6 p.m., except Fridays

King Edward Village, a large condominium/townhome project on the southeast corner of Knight and Kingsway, may well be a major catalyst for a neighbourhood that many people agree needs a facelift.

Because of that, the 206-unit development — the first phase of a project that will ultimately include about 400 homes — is one of those housing developments that has great local support in the surrounding Kensington-Cedar Cottage community.

“Usually people line up to oppose [these projects],” says Vancouver Coun. Anne Roberts, a supporter of King Edward Village and former chairwoman of the Kensington-Cedar Cottage CityPlan Committee, which negotiated with the developer to ensure the neighbourhood got what it needed.

“There were maybe one or two people who expressed concern [at the public hearing], but in general most people supported it and still do. The community very definitely supported this.”

King Edward Village, which includes a 12-storey tower in the first phase and a 16-storey tower in the second phase, is going up on a site that included a derelict Safeway store that closed more than a decade ago.

Another problem had been that the city zoning prevented the community group and a series of potential developers from agreeing on a project that both liked. There was also a flea market on the site, which Roberts said did little for the community and attracted an undesirable element. “Many thought it was a place to sell stolen goods.”

But the people who live around Vancouver‘s Kingsway and Clark intersection wanted to see the area become the kind of village-like neighbourhood centre that now exists in Kerrisdale and along Commercial Drive.

In addition to a pedestrian-friendly environment and several blocks of continuous retail, the neighbourhood’s vision included building more dense housing around the retail area to support it.

The city rezoned the site to help create the neighbourhood that residents said they wanted when they went through their CityPlan “visioning” process several years ago.

After that process, the city entertained proposals — and that’s when Tri Power Developments stepped up to the plate with its King Edward Village plan.

Roberts said Kensington-Cedar Cottage is a very active community that got involved from the beginning on the King Edward Village plan.

She said the developer understood that an expanded public library — which will occupy much of the project’s street-level space — was central to the residents’ needs and that the community was not opposed to more density.

“That would give us more amenities and street improvements, with more retail,” said Roberts. “And from the beginning, (the developer) was very respectful of the community. It worked out very well.”

She said a laneway through the King Edward site helped “pull it away from the traffic and made it a more pedestrian-oriented site. And the central lane is open to the public. It definitely can never be a gated community.”

She said the area is still a “little depressed,” but that King Edward Village should entice new investment and prompt other landlords to work together to improve the area. “It’ll be an increasingly desirable location.”

Burnaby resident Brad O’Connell, the 39-year-old owner of Beyond The Grape, an on-site beer and wine making shop, recently purchased a two-bedroom, 871-square-foot condo at King Edward Village for $295,000.

“I’ve looked at other buildings and this was one of the best I’ve seen,” said O’Connell. “And I own a small business in the area, so I wanted to be closer to work. I think this (project) will have a positive impact on the area, which is changing.”

O’Connell said the price was a big factor in his decision — King Edward Village is about $100 per square foot cheaper than a comparable West End condo, according to the sales agent — and he’s looking forward to a view of downtown Vancouver and the North Shore.

“I walked in here and said I found a place I wanted to buy. This is my first purchase.”

Another attraction for the six-foot-tall O’Connell was a ceiling height of eight-and-one-half feet — six inches higher than the standard eight-foot ceiling. “The taller ceilings certainly caught my eye. Other condos felt small and this felt larger.”

He said noise from Kingsway and Knight — both are six-lane highways — was a concern at first, but not anymore. “It’s got double-pane windows.”

A walk around the area reveals a neighbourhood that needs some sprucing up. There’s a small department store at the intersection and several smaller restaurants nearby. Many shops have metal bars on windows and doorways and there’s a tiny library and a discount burglar alarm supply store.

King Edward sales agent Gail Lepore says the King Edward project, which will be ready for occupancy in the summer of 2006, will be a catalyst for the area and that new business will set up shop in the neighbourhood. Buyers recognize that, she added.

“This will definitely bring up property values,” she said. “When you put up something beautiful, it will force others to change. Landlords will definitely have to pick up their socks.”

Lepore noted that 35 per cent of the units are now sold and that there are no other apartment buildings in the immediate area.

She said there are plenty of buyers from Kensington-Cedar Cottage, but also others from elsewhere in the Lower Mainland, including New Westminster, Coquitlam, Richmond and downtown Vancouver. “This is the hub (of the Lower Mainland). It’s only eight minutes to downtown.”

Lepore said the project has several amenities nearby, including Trout Lake, the Kensington Community Centre and shopping and restaurants on Main Street and Commercial Drive.

The display suite is an 810 square-foot two-bedroom unit, with each bedroom on each side of the living/dining area. There’s a storage area that can substitute as an office, a balcony, frosted glass cabinets, washer/dryer, wall-to-wall carpeting and tile (in the entryway, kitchen, bath and ensuite), and eight-foot, six-inch ceilings. Granite kitchen cabinets and marble vanities are also standard.

Lepore said the only option is stainless steel appliances. Not available is a fireplace — an amenity that O’Connell said he would have liked.

Each suite has one parking space and a storage locker. Other features include wiring for high-speed internet access and halogen lighting in the entry and kitchen.

Of the traffic noise on Kingsway and Knight, Lepore said it’s not a factor with most buyers. She noted the building’s concrete construction — “they’re more sound proof” — and that noise is not a problem for buyers on Georgia Street.

Meanwhile, Roberts said there are plans to encourage row housing and townhomes in Kensington-Cedar Cottage, an area that’s primarily single-family residential now.

As well, she said, the city’s looking at ways of enhancing Kingsway and Knight with more trees and possibly dampening noise from traffic and trucks along Knight by using a different type of paving material. “What can we do to make it safer, less polluting and more livable?”

© The Vancouver Sun 2004