Friday, February 13, 2015

Would this Nanaimo hotel project meet
the standard set by recent Vancouver
BC Supreme Court decision?

From: Frank Murphy
Subject: Georgia Park
Date: February 12, 2015
Cc: David Witty , Fred Pattje , Wally Wells , news@nanaimobulletin.com, SAnderson@nanaimodailynews.com

To: Mayor&Council , Ted.Swabey@nanaimo.ca

Mayor McKay and Nanaimo City Councillors —

Your new Council has created a new and very welcome tone to civic affairs. Leadership shown by symbolic gestures, and more substantively, though not more importantly, in policy terms: your support for Councillor Gord as he recovers in hospital, requiring “Empire” Days name be changed to qualify for further funding, reviews of City operations and the Advisory Committee structure, the defeat of Staff’s recommendation to return the Committee of the Whole meetings to the Annex where they would not be video recorded or telecast.
So, so far so good. There is on the horizon though something I’m afraid could undo much of what you’ve accomplished in rebuilding citizen trust in our City Hall: Georgia Park. Here’s three areas where I have concerns: the referendum, the public hearing and the deal itself negotiated between your Senior Management and local developer Insight Holdings.
The referendum. I’m concerned that the referendum will be divisive. Nanaimo will be asked to take a side on a proposal to lease to a commercial development, a portion of this downtown waterfront park.
When this proposal was first announced I spent many mornings at the park (it’s on my morning walk) talking to people about what they thought. I learned that there was a strong undercurrent of opposition and a lingering distrust of powerful players, including our City Hall, making deals behind closed doors. I and others were able through social media primarily, to publicize the public hearing. Although this hearing was announced and then quickly scheduled over late August early September, while many were still on holiday followed by the rush to ready kids for school, it was well attended, lively and informative. Concern and opposition to this proposal was also evident in local newspaper coverage and editorials and letters to the editor. You will also be aware of how heated and polarized public discussion of this was during the November municipal election.
So that the proposal is controversial and divisive I think there can be no doubt. It’s my view — based on what information I’ve able to learn from the staff report to Council, the public hearing and talking to Councillors and, informally one morning, representatives of the developer who happened to be at the park — that the referendum is not only unfortunate but also unnecessary. The proposal to lease waterfront parkland to the developer seems to have originated with City Senior Management more than with the proponent and as then-Councillor Fred Pattje pointed out was not part of the original concept presented to his Planning Advisory Committee.
A referendum about privatizing a city park for a commercial purpose will draw national attention. (Let’s be clear: I’m not at all opposed to the City permitting a use which can be argued enhances the public's enjoyment of a park — You’ll notice there has yet to be a report from your Parks Department or your Parks and Rec Committee arguing in favour of the public benefit to a waterfront park of a hotel loading zone.) 21st century city building ideas are very much in the air right now and I can confidently predict that this will catch the attention of urbanists like Brent Toderian, Gil Penalosa, the Strong Towns organization, SFU’s Gordon Price and UBC's Patrick Condon. And I can confidently predict that they will not be in support of this plan.
The public hearing. There is, with justification seems to me, a general cynicism about the inclusive public consultation that these hearings might produce. They are seen as a rubber-stamping part of the process, required to move forward plans and schemes formulated in private by powerful players. You will be aware of the recent BC Supreme Court decision which “threw out” a major development in downtown Vancouver —

https://twitter.com/1sidewalkballet/status/560303928504381440

"Justice Mark McEwan sided with the petitioners. He said the city’s process had been “opaque” and that the established principles of a transparent public hearing process had been violated. He not only threw out the development permit for the city’s property, but also the development permit for the site [the developer] now has under construction. He ordered new public hearings be held, and awarded the petitioners court costs.”
Would the Nanaimo Front Street proposal public hearing meet the standard set in this BC Supreme Court decisions? From the decision —

“A public hearing is not just an occasion for the public to blow off steam: it is a chance for perspectives to be heard that have not been heard as the City’s focus has narrowed during the project negotiations. Those perspectives, in turn, must be fairly and scrupulously considered and evaluated by council before making its final decision.”

 After some fractious partisan sparring among some Councillors the “public hearing” — as was originally intended by Staff — proceeded to a “special Council meeting” which quickly approved 3rd reading of all recommendations. Height and building density increase allowances and the privatization of a portion of Georgia Park. The sale to the developer of the adjoining City owned waterfront property to the north and east of the site had already been approved by Council. In my view, we haven’t come close to the standard set by the BC Supreme Court.
The deal. Let me clarify: what a property owner does on his or her own property within the law and in compliance with City regulations and bylaws, is none of my business. Also I have no problem with the property owner enhancing the property to maximize its value.
In this case, Insight’s Front Street property has had its value greatly enhanced. The property owner brought to the table the legal ownership of the site, conceptual renderings of a proposed hotel development and what they called a “commitment” from a famous hotel operator, Hilton. 
The greater portion of the value enhancement has come from our City Hall. The sale of adjoining waterfront property, very large increases in allowable height and building density, the leasing of adjoining waterfront parkland and what appears to be a kind of right of first refusal on improvements to the waterfront park beyond the lands leased to the proponent. We must have had very good reason to add these benefits and enhancement to this property. I’ve yet to understand what they might be. .
I have two areas of concern here. The viability of this proposal itself and what impact has it had on the other hotel development, the SSS Manhao Hotel on Gordon Street at the Conference Centre.
Again, the viability of the business would be, happily, of no concern to me but because we have brought so much to this proposal (and asked for so little in return) we enter different territory, I feel we have become partners in an investment plan and therefore have a responsibility to perform at least basic due diligence. It appears local developer Insight Holdings is proposing that the capital needed to build the hotel come from individual investors who have purchased individual rooms. It appears the goal is to turn ownership of the building over to a strata corporation made up of these small investors. Is it unreasonable of me to ask why Insight apparently doesn't see this as a long term investment? I do understand that the sale of strata units in hotels is accepted practice, but I don’t know of an example of full ownership being held by a strata corporation (with the possible exception of small time-share resorts). We should have sought answers to these and other questions about the long term viability of this plan and its apparent bet on Asian tourism before we brought so much added value to this property. 
But a greater concern is the impact on the other hotel proposal. We do know that after the Insight proposal surfaced the SSS Manhao project stalled. Coincidental? Perhaps. The Chinese corporation had purchased the site for market value when they could have paid only $1 — a gesture of the good corporate citizen it alway seemed to me. They invested in not just conceptual renderings but hired a respected Vancouver architectural firm to supply detailed architectural drawings. I understand geotechnical work was also completed and that all was ready to proceed to building permit. Little or no zoning variance was required or requested. This firm had a credible plan to continue its process of vertical integration in their tourism business. The hotel’s relationship with the City parkade and the Conference Centre were resolved. 

 Surely it would have been prudent to help this project get successfully up and running before we’d entertain another proposal. 
Have we had communication with SSS Manhao about how they feel about an additional 300+ 4 star rooms going into this marketplace backed and enhanced by the City of Nanaimo?
I assume that only a court challenge can change what’s been passed by the previous Council in a rush before your Council was elected. But please consider directing Staff to work with the developer to come up with a better plan in regards to Georgia Park. I hope they will consider the harm that will come regardless of the outcome of a referendum: reputations damaged and public trust in our City Hall further eroded.

And related: Gastown tower rejected by Vancouver's urban design panel — https://www.facebook.com/NanaimoCommons/posts/644781542293940. To my knowledge Nanaimo’s Design Advisory Panel has never “rejected” any proposal presented to it. 
Also UBC’s Patrick Condon writing in The Tyee — http://thetyee.ca/Opinion/2015/02/10/Stop-Dubai-zation-of-Vancouver/?utm_source=fb-page-editor-post&utm_medium=fb-page&utm_campaign=fb-02-2015.
More of my thoughts and some chronology from my website Nanaimo Commons — http://nanaimocommons.blogspot.ca/search/label/Georgia%20Par


— Frank Murphy

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