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