Lexpert Magazine

80 LEXPERT MAGAZINE | NOVEMBER/DECEMBER 2016 | COMMERCIAL REAL ESTATE | wiped out in the process, so they've come up with an imaginative solution. His- toric buildings are assigned a "density allocation." at means, for example, if a developer buys a five-storey, turn- of-the-century apartment building and restores it, the developer will have addi- tional density it can then sell to someone else. "Your reward for spending all that money is that the city says, 'We're going to give you 100,000 square feet of herit- age density,' which you can sell to other developers or qualifying sites so that they can build bigger buildings," Julian says. "So instead of building a 20-storey build- ing, they can build a 28-storey building. Imagine a 36-storey develop- ment with a supermarket as part of the retail on the first two floors, 14 floors of offices, and 20 storeys of residential con- dos stacked on top and three floors of un- derground parking. Issues such as odours, loading docks and parking for retail cus- tomers (as opposed to residents, office workers or visitor parking) all have to be negotiated, managed and legally docu- mented. It comes down to what belongs to whom, what is common space, how occupants share the cost of things like electrical systems that run throughout the development, who is responsible for what and how you manage it. Benhamou, of Davies Ward, says in some provinces "what you end up with is condo declara- tions within condo declarations within condo declarations." BC has also been particularly innova- tive in its legal treatment of such build- ings. Under the province's Land Title "view corridors and shadow impact" on other buildings and public spaces, says Patrick Julian, who leads Koffman Kalef 's commercial real estate practice group. at means firm lawyers are nego- tiating with city lawyers and working dir- ectly with both architects and planning consultants on behalf of their clients. Providing a new development doesn't impact any of the 27 "protected-view" corridors, planners have been accom- modating greater density by permitting higher buildings, says Julian, who sees that as a good thing. "What Vancouver really needs to do, if you're looking at the next 50 or 100 years, is become more like Manhattan — eliminate all of the single- family homes and have multi-family de- velopments. So we've got to look up, and we've got to look at density." Vancouver has just six high-rises over 92 metres, Julian says, the highest being the mixed-use Shangrila. At 197 metres, it towers over almost everything else. He believes there needs to be more height to relieve price pressure, and while planners are relaxing height requirements a bit, lawyers draing agreements are caught in a constant battle "between height and the impact on views and shadowing." If downtown Vancouver didn't have the mountain and water views, it would have a lot more density, he says. Like Toronto and Montréal, the result of growing demand on limited space is seeing aging "mom-and-pop businesses" and low-rise apartments being torn down to be replaced by mixed-used develop- ments. But Vancouver's urban planners don't want the city's heritage buildings Act, developers filing plans for new tow- ers can divide the floors up into "air space parcels." Each parcel, while not on terra firma, is considered as if it were: land with registered title, deeds and all the same rights and easements. It's just that the lots are volumetric cubes of air instead of land-based. "Twenty years ago you didn't see them very oen: today they're a fact of life," says Scott Smythe, leader of the real property and planning group in the Vancouver office of McCarthy Tétrault LLP. "When you don't have much land le, you've got to build up." Take that 36-storey mixed-use develop- ment and put it in BC. e way it works is, developers can take the top 20-storeys of residential units and put them into one air space parcel that can be sold, mort- gaged, leased or even subdivided into condo units if the developer chooses. e middle 14 floors of office space can be set up as a second air space parcel "or even four separate air space parcels if the developer wants," says Smythe. Same with two floors of retail space and three levels of underground parking. "It can be whatever you want. It just depends on the developer's vision." Regardless of how the space is carved up, air parcel units require lawyers like Smythe to dra agreements on easements, mechanical equipment, utilities and boundaries. Julian and Smythe both feel that because of its topography and protected-view and shadowing issues, downtown Vancouver will not be filled with 100-storey towers any time soon. Both see a lot of density and a lot of development money going into transit-oriented development — especially tied into the public transit that connects downtown Vancouver with the airport and to bedroom communities such as Burnaby, New Westminster and Surrey. Julian points to Marine Gateway as the "iconic blueprint" for the next 10 or 15 years. e allowable density for the five-acre site, on the edge of South Van- couver allows for over 300 condo units and 100 rental units. Its developers also included a main street with a Cineplex, a food store, a Starbucks "and all the retail you would expect." Marine Gateway is also billing itself as a hub for green jobs, with Westport Inno- PATRICK JULIAN > KOFFMAN KALEF LLP "What Vancouver really needs to do, if you're looking at the next 50 or 100 years, is become more like Manhattan — eliminate all of the single-family homes and have multi-family developments. So we've got to look up, and we've got to look at density."

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