VANCOUVER – Vancouver is poised to clamp down on the impending rush to convert downtown office space into condos in an effort to prevent the central city from turning into a residential resort, the city’s planning co-director warned developers Thursday.

Facing a dilemma that no other city planner in North America has, in which residential space sells for about twice as much as office space, Larry Beasley told 350 people at an Urban Development Institute lunch that “we simply cannot afford to lose our capacity for commercial growth no matter how attractive the alternatives look in the short run.”

Only one office building, the former Westcoast Transmission building on West Georgia, has been converted outright in the last couple of years, but Beasley said he has had half a dozen other inquiries, and just the possibility of more conversions will start to destabilize the commercial real-estate market.

Beasley advised developers to start looking at Chinatown, Gastown and the Downtown Eastside as possible building sites.

But he warned they can’t just import the current Vancouver design favourite of pointe towers and podiums to those areas.

They’ll have to find something that fits with those communities and that those communities will endorse, especially in the Downtown Eastside, he said.

“Since this is a much trickier form of development to build and market, some very creative thinking will be in order for Hastings Street projects and for any project that grows out of the unique DNA of the Downtown Eastside.”

Beasley, who labelled his talk “The Shift East,” emphasized that developers need to look east because the land shortage in western and central downtown will only get worse after the city puts in place its new policies on office-space conversion, as well as a new policy that will affect density in the Downtown South.

He said he’ll be recommending to council shortly that the city not allow extra density on any more of the remaining small building sites in Downtown South.

In the past few years, the city has allowed several developers to build towers higher than the zoning allows in exchange for community spaces, like art galleries or film centres, or if those developers “bought” space from heritage buildings.

“It’s simply too tough with the neighbours and too tight in the setting to put towers on these very small sites where no one has expected them.”

Regarding office-space conversions, Beasley said there will be two policies to slow down the conversion of existing buildings in the central business district and to limit the production of residential buildings in the areas just outside the business district.

In order to discourage the conversion of existing office buildings, city staff will look at a process in which any conversion is reviewed to see what the long-term impact on commercial space will be.

“It won’t be a moratorium,” he said.

To limit production of residential buildings in areas zoned to be either residential or commercial, the city is looking at not automatically approving housing projects in what’s called Area C — the land between the central business district and Beatty, and south of Victory Square.

Beasley’s message was taken to heart by his audience.

David Negrin, second in command at Concord Pacific, joked that CEO Terry Hui would instantly abandon his plan to build a pointe tower on Hastings Street — something Beasley specifically referred to in his speech as a project that wouldn’t be acceptable.

Urban Development Institute president Ward McAllister said developers might not be thrilled about the limitations on building projects downtown, but Beasley’s direct message is better than a “slow no.”

He also agreed with Beasley’s assessment of the dangers of current trends. “I share his concern about the conversion of commercial space,” he said.

Beasley also advised developers to look at ways of broadening their targeted market downtown.

The current boom could easily come to a crashing halt as immigration and migration from the suburbs slows down, or as interest rates increase, he said, adding developers should look at how to make housing more attractive to families.

There are more children in the downtown now than there are in Point Grey, he pointed out. If developers could market even more to that family contingent, “the market potential could be expanded dramatically.”

© The Vancouver Sun 2004