City of Vancouver faces complex negotiations on 717 expiring strata leases in False Creek South
The City of Vancouver has created a framework to negotiate with residents leasing municipal lands in False Creek South.
This will guide the city in talks, given what a staff report describes as “complex nature of the legal arrangements between the City and the strata leaseholders”.
Leases will expire starting in 2036, and the city has the option to either renew or end the contracts.
As a landlord, the city has not decided either way what it will do regarding the leases of 669 residential strata and 48 commercial strata units, or a total of 717 leases.
The city owns 80 percent of the 55-hectare neighbourhood, home to almost 5,800 residents.
All in all, there are 3,155 market and non-market housing units in the neighbourhood, with the remainder of the lands owned by the private sector and other levels of government.
With its extensive park lands and three kilometres of seawall, and its mix of different housing types, False Creek South is one of the most desirable neighbourhoods in the city.
Situated north of West 6th Avenue between the Cambie and Burrard Bridges, False Creek South is a success story of transforming industrial lands into a thriving neighbourhood.
The city intends to continue to own its lands in False Creek South, and it is interested to explore development opportunities.
A report written by Greg Hamilton, manager of the city’s Property Endowment Fund, and included in the agenda Wednesday (July 12) of council, outlines the complex situation facing the city as landlord.
“The City is in a challenging position where it has no simple method, within the construct of the current lease agreements and the B.C. Strata Property Act, to embark on a negotiation process with over 700 strata leaseholders, who have acquired a leasehold interest in strata lots constructed on leased land in False Creek South,” Hamilton wrote.Nearly 5,800 people live in False Creek South.VIA ARCHITECTURE
According to Hamilton, the city has the sole option to renew a lease for a term of at least five years.
Or it may not.
“If the City elects not to renew a strata lot lease (either at the end of the current lease term, or at the end of some extended/renewed term), then pursuant to the requirements of the Strata Property Act and the terms of the lease, the City must purchase the lessee’s interest in the strata lot on the termination of the strata lot lease,” Hamilton wrote.
However, the city executive noted that the method for computing the purchase price of a lessee’s interest was not defined in the lease.
“This means that the purchase price must therefore be the fair market value of the lessee’s interest in the strata lot evaluated, in accordance with the regulations, as if the strata lot lease did not expire,” Hamilton wrote in his report.
According to Hamilton, the province has “not enacted any regulations under the Strata Property Act that set out the methodology for evaluating the leasehold tenant’s interest in the strata lot, and the Province has not announced that any regulations are forthcoming”.
He went on to note that “unless the Province enacts a regulation to provide clarity, a common understanding needs to be negotiated between the City and the strata leaseholders”.
One of the most illustrious residents of False Creek South is erstwhile Vancouver city councillor Geoff Meggs.
Meggs recently stepped down as city councillor after he was named chief of staff to incoming B.C. NDP Premier John Horgan.
Back to Hamilton’s report, the manager wrote: “Given the complex nature of the legal arrangements between the City and the strata leaseholders, the framework process for negotiations should streamline, to the extent possible, the complexity of negotiating with all 717 strata leaseholders, whilst ensuring that all strata leaseholders are able to participate in the process.”
The framework includes the development of options that may include changes to existing leases, creation of new leases, or allowing leases to expire.
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