Strike stalls developers

Veteran Vancouver developer Bill Eden never expected that almost $100 million worth of real-estate projects would get caught in the crossfire of the Vancouver civic workers strike. Eden, owner of the Eden Group of Companies, has always been aware of other business risks associated with property development.

High land prices, rising building costs, and climbing interest rates mean that the business environment is more difficult than it was during previous civic strikes, Eden told the Georgia Straight. “Time is of the essence,” he said. “The market is so tough.”

He said he recently learned that two of Eden’s major projects—a $65 million high-rise called the Elyse and a $30 million townhouse development called Montgomery Estates—have ended up in limbo because of the strike by 2,500 inside workers with CUPE Local 15. The city’s development-permit board has already given conditional approval to the 119-unit Elyse at the corner of East 7th Avenue and Scotia Street. But Eden said he can’t get a building permit because there are no city staff available to check to see that he has met the conditions.

He has already obtained rezoning for Montgomery Estates, a 31-unit project at Oak Street and 43rd Avenue. The next step is an appearance before the development-permit board on September 13. However, the last meeting was cancelled. Eden predicted there will be a backlog of applications even if the strike is settled soon, which could cause further delays.

“We have two large projects on hold because we don’t have all the approvals,” Eden said. “They’re in process. They were going to be approved. It comes to a screeching halt because of not having the staff to do it.”

Eden claimed that he has lost about $100,000 to $150,000 since the civic workers strike began in mid July. He said that contractors, subcontractors, and even the marketing of the projects are on hold. “You’re sitting on your hands waiting for two parties to agree so you can carry on with your livelihood,” he said. “It’s really unfortunate.”

Eden said that if someone can’t get their trash collected during a strike, they can hire someone from the private sector. However, he said that he can’t hire someone from the private sector to give him municipal permits, which leaves him feeling “blackmailed” by both sides.

Recently, he wrote a letter to his MLA, Colin Hansen, asking the province to get involved if the strike isn’t settled soon. “Put in an arbitrator,” Eden said. “Set a deadline. I’m sure they can figure it out. Meanwhile, let’s go to work.”

Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association, told the Straight that Eden’s case isn’t unique. “In Vancouver, there are delays at the best of times because of the sheer volume that they’re dealing with,” Simpson said. “When this strike is settled, it won’t be back to normal right away.”

What’s most galling to the building industry is that the summer is the best time for construction. Simpson noted that this region suffered horrible weather last December, January, and February, and many builders were looking forward to “prime building weather” to get projects completed. “The interest clock is ticking away here,” he said, referring to the carrying costs that developers face. Simpson added that some home builders worry that they’ll lose skilled tradespeople if their projects are put on hold.

“There are some people who dodged the bullet because they were able to get their permits before they [workers] went on strike, or they don’t need an inspection quite yet, or they’re using a certified professional,” he said. “I don’t want to make it seem like the entire industry is shut down by this. It’s not, but it has a serious impact.”

Simpson said that earlier this month, Mayor Sam Sullivan phoned him to learn more about the economic impact of the strike on the building industry. Sullivan remained on the phone for more than half an hour, according to Simpson. “The mayor was concerned how this was impacting us,” he said. “I will give him credit for that.”

Within a day of this conversation, the civic unions and management were back at the negotiating table, but they couldn’t reach an agreement by August 8 when the Straight went to press. Mayor Sullivan’s 2005 contributors included many big developers. The Eden Group of Companies was not on the list of those who financed the mayor’s campaign.