720 Beatty St | Steam Plant + ??? | U/C

[bb1510]

Originally Posted by jollyburger

They'll move the power plant if they get approval for Creative Energy to fund the completion of the power plant. Or it gets mothballed while the developer finds some money.

Best case scenario at this point is the new power plant gets completed but there's zero chance the S-shape building is proceeding at all. The BCUC link above has all the details.

Made an edit Sorry to burst your bubble, but that's the latest rumour I've heard...that's all I can say for now

[jollyburger]

Originally Posted by bb1510

Made an edit Sorry to burst your bubble, but that's the latest rumour I've heard...that's all I can say for now

Well I assumed change of use was pie in the sky so I'm not surprised.

I wonder how Creative Energy's downtown steam network customers are going to feel if they are forced to eat all these unexpected expenses.

[jollyburger]

The latest filing Nov 1

The Developer is in the process of redesigning the project to a residential tower and data center, however these same parties are unwilling to loan funds to the Developer without a viable development plan, including entitlements and a tenant commitment, in place for the Surplus Lands. The Developer has also advised that there is limited liquidity available elsewhere within the Westbank group at this time that can be made available to the Developer to permit it to complete the construction of the New Plant Premises, nor are there viable options for raising such funds. It has been reported in the media that a number of development projects have recently been sold by affiliates of the Developer. However, Creative Energy understands that the ownership interests in these projects were held by separate Westbank entities, that in many cases included other partners, and that any proceeds of sale would likely have been allocated to repaying outstanding indebtedness and other obligations in respect of these projects, such that this also did not present a viable financing alternative to address the Developer’s obligations under the Amended and Restated TDA in respect of the New Plant Premises.

199 pages

https://docs.bcuc.com/documents/proc...ule-public.pdf

[mcj]

Originally Posted by officedweller

Thanks for the update.
Hopefully the city will reject any residential use - or require solid walls facing BC Place to avoid noise and light complaints.

Almost like it was predictably a move to residential.

Wish it could just be an entertainment venue + data center.

[Metro-One]

How annoying.

It’s somewhat understandable, but still there is the loss of a very appropriately placed entertainment venue.

This is why when I ever seen anything in Van proposed with bold lighting features, animations, etc… I never believe until I see it. And 3/4 times I never see it!

[officedweller]

Originally Posted by mcj

Almost like it was predictably a move to residential.

Wish it could just be an entertainment venue + data center.

I recall the original proposal before the office proposal was for residential, but there will inevitably be complaints about the BC Place Northern Lights display, so hopefully it is being redesigned to minimize windows or install louvre shades on the BC Place side.

[jollyburger]

Originally Posted by officedweller

I recall the original proposal before the office proposal was for residential, but there will inevitably be complaints about the BC Place Northern Lights display, so hopefully it is being redesigned to minimize windows or install louvre shades on the BC Place side.

In 2018 I think they were talking about a mix of residential and office but with the same S building.

https://www.biv.com/news/real-estate...-space-8252666

2015 rezoning proposal

On the Beatty Street frontage Creative Energy proposes a 300,000 - 350,000 sq.ft. of office/commercial building and a 300,000 - 400,000 sq.ft. residential building (currently proposed to be secured market rental housing).
• On the lower side of the site on Expo Boulevard they propose a plaza with 25,000 sq.ft. of retail.
• Overall non-residential density is proposed to exceed the 7.0 FSR minimum
commercial requirement.
• The existing Steam Plant (70,000 sq.ft.) will either be re-engineered and integrated into the development as a back-up function, or relocated off-site. In addition, a new, low carbon heating plant will be built off-site. The applicant is currently working to secure a location in the False Creek Flats that will be linked to the distribution network.
• As part of the rezoning process, City staff will work with the applicant to determine how the fuel switch can be secured as a long-term public benefit for the city.

https://council.vancouver.ca/2015070...ents/cfsc2.pdf

[officedweller]

Originally Posted by jollyburger

In 2018 I think they were talking about a mix of residential and office but with the same S building.

https://www.biv.com/news/real-estate...-space-8252666

Yeah, I recall that and that there would be units facing the stadium lights.

[jollyburger]

BCUC asks the question I'm wondering. When Gillespe has his hands in both Creative Energy and Westbank is he just going to dump this mess on existing steam clients to cover?

Given the obligations of the Developer under the existing TDA, please explain why Creative Energy considers it necesto seek BCUC approval of the proposed expenditure schedule instead of relying on the rights and remedies available to it under the TDA to pursue recovery of these costs directly from the Developer.

It seems like even with these approvals to finish the plant they are unsure if they have the money to fit out the new plant.

https://docs.bcuc.com/documents/proc...tiveenergy.pdf

New updates

The Developer recently advised Creative Energy that it has been able to slow construction work (for example, by limiting overtime work) such that the Developer now expects its existing funding will be exhausted in January 2025.

They are also looking at extending the life of the current plant.

Creative Energy indicated in the Application that it has been undertaking a condition assessment of all systems and equipment in the existing Beatty Plant to evaluate opportunities to operate the existing Beatty Plant for longer than previously assumed with manageable risk to safety and reliability of service.4 In the Application, we indicated that we have identified several projects and that analysis of these projects is ongoing.

https://docs.bcuc.com/documents/proc...iaryupdate.pdf

[WarrenC12]

What a mess for a project that looked so promising back at the beginning.

[officedweller]

So what was the impetus for the redevelopment in the first place?

Was it "unlocking" development potential or was it the "greening" of Central Heat Distribution or likely the first under the guise of the second?

If it was largely the second, then it should be something that should stand on its own merits.

The failure of the development and its impact on the shared use occupant (Creative Energy) echoes other co-development / shared space projects such those embarked on by churches with low attendance and the failed Canadian Legion redevelopment in Burnaby.

https://www.burnabynow.com/local-new...d-deal-3079012

The question in this case is whether Creative Energy was adequately and independently represented in its dealings with Westbank. If the facility does not get built, Creative Energy should be suing its lawyer and Westbank.

[jollyburger]

Originally Posted by officedweller

So what was the impetus for the redevelopment in the first place?

Was it "unlocking" development potential or was it the "greening" of Central Heat Distribution or likely the first under the guise of the second?

If it was largely the second, then it should be something that should stand on its own merits.

The failure of the development and its impact on the shared use occupant (Creative Energy) echoes other co-development / shared space projects such those embarked on by churches with low attendance and the failed Canadian Legion redevelopment in Burnaby.

https://www.burnabynow.com/local-new...d-deal-3079012

The question in this case is whether Creative Energy was adequately and independently represented in its dealings with Westbank. If the facility does not get built, Creative Energy should be suing its lawyer and Westbank.

I think it was the greening of their energy supply and the potential to use wood waste etc and then that pivoted to the current proposal. I mean there were obviously future costs to replace their current plant but you assume some of it was just an excuse to redevelop the site as another Westbank pet project.

That agreement also requires Creative Energy to move to a low-carbon source of energy and begin reporting on its efforts to reduce greenhouse gases.

https://vancouversun.com/news/metro/...s-energy-plans

That may seem to offer little financial incentive for Creative Energy to convert to biofuel, but Gillespie has said he believes the change is necessary for environmental reasons. The old gas-fired plant is the city’s single biggest source of greenhouse gases. Getting rid of it would eliminate about 70,000 tonnes of carbon dioxide annually.

https://vancouversun.com/news/metro/...gas-fed-plants

[Changing City]

Originally Posted by jollyburger

I think it was the greening of their energy supply and the potential to use wood waste etc and then that pivoted to the current proposal. I mean there were obviously future costs to replace their current plant but you assume some of it was just an excuse to redevelop the site as another Westbank pet project.

I think that originally, when the idea was to move from gas to wood waste to power the new boilers, (like the UBC plant) the idea was for it to located somewhere in False Creek Flats (and potentially link into the City's system?)

I understood that initially it was Ian Gillespie's funds that bought the power company, although I could be wrong about that. He was (and seems to remain) very keen on the decarbonisation of the Downtown system, and of expanding Creative's expertise into other projects. He also obviously controls Westbank as a private company, so there wasn't much difference between a Creative interest, and a Westbank interest. That's changed now that Creative has other shared ownership.

A relocated plant would have left the site of the existing plant as a prime redevelopment site. When that idea wasn't going to fly, the BIG office incorporating a replacement power plant, integrated into the design, was drawn up.

Currently, the current state of Westbank's finances, and the office market, have led to more changes as the replacement power plant was not designed as a stand alone project. Financing to build a very large, unleased office building isn't going to be made available.

Presumablyall the extra costs that are hitting development generally apply to this one too - and they can't just get passed onto the customers of Creative Energy as everything to do with the project has to be approved by the regulator.

[jollyburger]

Westbank is still partnered with InstarAGF Essential Infrastructure Fund according to all the most recent BCUC filings. Originally it was 50% in 2018.

So there's probably more balance in protecting CE's interest since there's another investor versus both companies 100% being controlled by Westbank.

[officedweller]

Originally Posted by Changing City

..

Presumablyall the extra costs that are hitting development generally apply to this one too - and they can't just get passed onto the customers of Creative Energy as everything to do with the project has to be approved by the regulator.

That's very fortunate for all of the downtown landlords!

[Changing City]

Originally Posted by officedweller

That's very fortunate for all of the downtown landlords!

That's true. But if Creative Energy got into a situation where their new plant isn't complete, because the developer couldn't fund the additional cost, and then something serious goes wrong with the old plant, it could get mighty cold! Presumably they operate with some sort of contingency for that scenario, but it seems that they can't rely on Westbank coming to the rescue.

[urbanight93]

Is there a reason they don’t pivot the commercial to hotel use rather than rental (seems like an easier switch)? The location is ideal for a hotel, especially with the imminent shortage of short-term units.

This intersection is decidedly unlucky, between this project stalling and the VAG in limbo.

[jollyburger]

A hotel probably has a lot of overhead and it would eat into the usable space versus doing market rental. It is part of the Downtown District for the official development plan so it might end up like hotel if they can't get it passed.

[WarrenC12]

Expo Blvd to remain a mess for the foreseeable future I guess.

[s211]

Originally Posted by urbanight93

Is there a reason they don’t pivot the commercial to hotel use rather than rental (seems like an easier switch)? The location is ideal for a hotel, especially with the imminent shortage of short-term units.

This intersection is decidedly unlucky, between this project stalling and the VAG in limbo.

For the four basic real estate food groups, hotels are the riskiest real estate asset class. It is the most volatile and is also the most sensitive to changing economic conditions. Hence, investors demand a higher return on their investment to compensate for the risk. That higher rate of return can usually make it more difficult for new hotel developments to pencil out.