RCMP investigating controversial Vancouver land swap
SAM COOPER
Published on: April 5, 2017 | Last Updated: April 5, 2017 2:19 PM PDT
The construction site at Helmcken and Richards in downtown Vancouver. ARLEN REDEKOP / PNG
A complaint has been filed with the RCMP concerning a controversial City of Vancouver property exchange involving a luxury condo tower to be built in Yaletown, Postmedia has learned.
Complainant Glen Chernen of the South Vancouver Parks Society began forwarding information to investigators last fall, and officers confirmed in late March that they are continuing to investigate. They are interested in the development of a former City of Vancouver property at 508 Helmcken, information obtained by Postmedia shows.
This complex and previously confidential land exchange and development deal involves the City of Vancouver, B.C. Housing, developer Brenhill, and Vancouver realtor Bob Rennie, among other players. The deal was approved in-camera by Vancouver council in October 2012.
The deal started to move forward in late 2011, when Brenhill approached city officials with a land swap proposal, which was based on the construction of about 162 new social housing and affordable units on property owned by the developer at 1099 Richards, in order to unlock the re-development potential of a valuable piece of city land at 508 Helmcken, city documents say. Social housing units had been built on the property in 1986, and it was encumbered by a long-term lease to a social housing operator.
As plans moved forward in 2012, the city’s Helmcken property was valued internally by city staff at $15 million, for the purposes of the land exchange proposal with the developer in January 2013, documents show.
About two weeks later, in February 2013, a private appraisal commissioned by Brenhill showed that 508 Helmcken would be worth $80 million if rezoned as planned, Postmedia learned from B.C. Housing officials last week.
Now, four years after the city gave 508 Helmcken to the developer at a $15-million value, it has been assessed as high as $130 million by B.C. Assessment, and documents show that it could be worth even more at market rates.
The social housing project at 1099 Richards has now been completed and handed over to the city. And Brenhill has reportedly pre-sold the majority of units for its planned mixed-use, 36-storey luxury tower, including 454 residential units, at 508 Helmcken. MLS data shows units are being marketed by Rennie Marketing Systems, in connection with sales brokers at offshore-focused real estate companies, including New Coast Realty and Magsen Realty.
A 1,781-sq-ft, three-bedroom apartment in the yet-to-be-built luxury tower sold for $3 million last summer and a larger three-bedroom unit sold for over $3.5 million, Postmedia has learned.
Many documents related to the deal have only been disclosed by the City of Vancouver and B.C. Housing as a result of the steady pressure of freedom of information requests from community activists, and litigation, including a 2014 B.C. Supreme Court challenge which successfully quashed the deal’s rezoning. A judge said the city’s public process for the deal was inadequate. But the city won an appeal in April 2015.
Critics are asking whether city taxpayers got fair value in the extremely complex deal. There are also questions about whether the social and family-friendly housing benefits that city planners promised have actually resulted.
William McCarthy, a private developer, real estate consultant and past president of the Real Estate Institute of Canada, studied recently made public documents in order to provide an opinion on the controversial land swap.
“From what I have seen to date, the city and its taxpayers did not receive either financial value or ancillary benefits from this convoluted transaction,” McCarthy said. “Rather than … first commissioning a comprehensive property appraisal, engaging independent real estate experts to guide them, and then offering their site for sale in an open and fair bid process, the city instead … did the exact opposite.”
NDP housing critic David Eby has asked why B.C. Housing, which is mandated to provide social housing, provided a previously undisclosed $39-million loan to Brenhill. The loan in 2016 required reporting of pre-sales progress in the luxury tower.
It has also been revealed that realtor Bob Rennie was involved in bringing forward the loan proposal to B.C. Housing’s board, while Rennie was a member of that board, in November 2013.
Rennie recused himself from the discussion and approval of the funding for Brenhill from B.C. Housing in the deal, documents show. But B.C. Housing officials refused to disclose to Postmedia why Rennie recused himself.
This week, Rennie did not respond by deadline for information on this story. The developer Brenhill also did not respond to requests for information on the timing of its agreement with Rennie for this project.
“Bob Rennie was appointed to the B.C. Housing Management Commission’s Board of Directors on April 27, 2012 for a two-year term,” B.C. Housing stated in response to questions from Postmedia. “We are not aware of any contractual relationship he had with Brenhill.”
Rennie conducted himself in a similar fashion when the loan came before the B.C. Housing commissioners in February 2014. On that occasion, meeting minutes reveal that Rennie “left the boardroom due to the perception of a conflict of interest with this project.”
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