A recent B.C. Supreme Court ruling overturning Brenhill Developments Limited’s rezoning application has generated a great deal of media attention. However, little coverage has focused on the impact that Justice Mark McEwan's decision will have on low-income residents of the downtown core.
Joan Seidl is president of the 127 Society for Housing, which operates Jubilee House at the southwest corner of Richards and Helmcken streets. The society provides housing to 89 people living on shelter allowances in 87 units.
McEwan's ruling not only quashed the rezoning of Brenhill’s proposed tower at 508 Helmcken Street, it also cancelled a development permit for a 162-building at 1099 Richards Street. It was going to become the new home for Jubilee House’s residents
"They're in a kind of limbo," Seidl explained to the Georgia Straight by phone. "They can't imagine their lives a year from now. Before, they had this kind of hopeful imagining, which gave a kind of direction to their lives. That vanished."
McEwan's January 27 ruling nullified a council decision to permit a 36-storey tower on the site of Jubilee House at the northern edge of Emery Barnes Park. As part of the rezoning, Brenhill had planned to give the city its site across the street at 1099 Richards Street.
Prior to the court decision, Brenhill was also obliged to construct a 13-storey building at its expense on its former site and give it to the city.
In addition to 87 social-housing units for the Jubilee House residents, this building was going to have 75 low-end market-rental units.
McEwan’s ruling noted that Brenhill would be responsible for $24 million of the expected $30.6 million in construction costs. The remainder would come from the difference in the land value between 508 Helmcken Street and 1099 Richards Street. So on paper, the city contributed $6.6 million to the building—that was the difference.
If it came in below $30.6 million, Brenhill would return the difference between its actual cost and $30.6 million to the city. Brenhill also absorbed all development risks if the 162-unit building went over budget. In addition, Brenhill contributed $1 million to the city’s affordable-housing fund.
Jubilee House residents would continue to pay the shelter allowance in the new building without any increase in their rents.
Seidl pointed out that residents of Jubilee House are not the type of people who deal well with uncertainty, which is exactly what’s been created by McEwan’s court ruling. She maintained that these residents are best off when the 127 Society for Housing provides a high degree of structure, which helps them cope with their mental- and physical-health issues, including addictions.
"Managing those things is crucial to having good lives," Seidl said. "My staff spends a huge amount of time trying to support people—not to cure them, but to help them handle life. And you know, life has just thrown them a big curveball. And it feels like a curveball that came out of nowhere and it doesn't have anything to do with that."
The society did not feel it would be a good idea for the Straight to interview any of the people living in Jubilee House.
Seidl said that prior to the court ruling, the residents were energized by the prospect of moving into a new building. The old Jubilee House has a great deal of problems, according to her, and it was tough for tenants to deal with a huge amount of remedial construction over the years.
"The idea of something brand-spanking new and purpose-built was very exciting," she said.
Court case launched over disclosure
The Community Association of New Yaletown filed a petition in B.C. Supreme Court challenging the deal because it felt the rezoning process was flawed.
It centred its arguments around the city’s lack of disclosure at the public hearing and an amendment to the Downtown Official Development Plan after the rezoning was approved.
Among the association’s objections were the city’s failure to provide the land-exchange contract. In addition, it argued that the city failed to disclose its policy around the sale of public land as well as information about the development-permit application for the site across the street, not to mention 127 Society for Housing's lease-surrender agreement that enabled the transaction to take place.
The judge concluded that the process was “flawed” because residents at the public hearing weren’t provided with sufficient documents to evaluate the dollar values in the land exchange.
Brenhill made a separate argument that the council vote could not be challenged because the Community Association of New Yaletown failed to file its case within a week of its enactment, which is a requirement under the Vancouver Charter. McEwan dismissed that argument, leaving room for the developer to appeal the decision.
Brenhill did not respond to the Straight’s request for an interview.
What’s “social” housing?
Brenhill’s project at 508 Helmcken would have included 338 condos for sale and 110 units that would remain market rental. At least 26 of those rental units would have been two-bedroom units, according to the court ruling.
The 162-unit building across the street was going to be the community-amenity contribution. In return for creating this building for the Jubilee House residents, council voted to allow Brenhill to build a 97.5-metre tower with a floor-space ratio of 17.19 at 508 Helmcken Street.
Meanwhile, the low-end market micro-rental units at 1099 Richards Street were going to average $1,150 per month. The association didn't see any net increase in social-housing units and questioned whether the entire project should have been characterized as “social housing” in city documents.
In downtown, new one-bedroom apartments are renting for $1,800 to $1,900 per month. The city takes the position that $1,150 per month constitutes "social housing" because it claims that it could obtain higher rents for those 75 units of low-end market micro-rental units.
The policy report released before the public hearing on Brenhill’s rezoning stated that there would be 162 “social housing units” built across the street.
In documents sent to the development-permit board, the city also called all 162 units in the new building "social housing units”, adding that “a portion of which meet the definition of low cost housing (as defined in the Downtown Official Development Plan)".
Seventeen of the proposed 162 units were smaller than what the bylaw permits, according to a staff report. On-site lounges, meeting rooms, and semiprivate open spaces on the eighth-level podium and the roof were included to "enhance the livability for the residents".
"The proposed tenant mix allows for the continued operation of 87 units, or 53% of the total, for individuals on fixed incomes (including income assistance, Old Age Security or other sources of fixed incomes)," the staff report stated. "The remaining 75 units will provide housing to individuals at the low-end of market rents in order for the project to remain financially sustainable. Over time as operating surpluses became available, there will be an opportunity to provide a higher level of affordability in the units overall."
Lease surrender made the deal happen
Key to the overall transaction was 127 Society for Housing agreeing to surrender its lease for 508 Helmcken Street. The society demanded one-to-one replacement of the Jubilee House units in return for this.
Had the society not done this, it would have retained its legal binding interest at 508 Helmcken Street until 2046.
Therefore, the likelihood of Emery Barnes Park ever being extended north to Helmcken Street—a dream of some area residents—wasn’t going to happen as long as the society had a legal interest in the land.
Canada Mortgage and Housing Corporation allowed the society to transfer its mortgages across the street as long as it retained an interest in the land upon which the 87 replacement units were being built. This enabled the society to continue to be eligible for CMHC subsidies.
A side benefit was that B.C. Housing was able to write off $1.6 million in second mortgages. The new building wouldn't require the same amount of annual expenditures to rehabilitate the structure as the old Jubilee House.
The problem, according to the court ruling, is that the city presented the public “with a package of technical material that was opaque, compared to the material presented in court, in limiting comment on the integrated nature of the project, and in failing to provide an intelligible (i.e. where do the numbers come from?) financial justification for it”.
Land values raise concerns
Much has been made about how the land assessment of 508 Helmcken is so much higher than the property across the street, which was going to be the site of the new city-owned 162-unit building.
The 508 Helmcken site was worth far less before 127 Society for Housing agreed to surrender its lease on the property. The recent assessment after the rezoning and lease surrender indicates it’s worth $59 million.
The city estimated that the city property was worth $15 million at the time of the deal.
The former Brenhill site at 1099 Richards Street was valued at $8.4 million. That's because there are already two high-rises in that block of Richards on the same side of the street.
Under the Downtown Official Development Plan, the developer couldn’t build anything higher than 3 FSR at 1099 Richards Street. Hence, the relatively low land value for a prime downtown site.
If you add the value of the completed building, the arithmetic looks a little better from the city’s perspective. If you assume that the entire building would be rented at full market rates, the city’s bottom line would improve even more.
However, the city has foregone revenue by not kicking Jubilee House residents to the curb. The city could also argue that it’s reducing its overall revenue by having 75 of the units priced at lower rates than what it thinks it could achieve, so the value of the building would be even higher if this were taken into account.
In the meantime, revenues from the entire building will ensure that Jubilee House residents will get to live in new suites at the shelter allowance.
Even though Brenhill would not have built a third high-rise at 1099 Richards Street, there was room to allow greater density for nonmarket housing on that site. Under the Downtown Official Development Plan, the city could relax heights from 3 to 5 FSR to accommodate its social-housing objectives.
The 162-unit building was permitted to go to 7.04 FSR, which ensured that all Jubilee House residents would continue paying the shelter allowance in the new structure.
Downtown plan became an issue in court
The city amended its Downtown Official Development Plan last February after the Brenhilll rezoning and after a development permit was approved for 1099 Richards Street. This was designed to bring city policy in line with what had already been approved by council and the development permit board.
The petitioners argued in court that had the city adhered to the earlier Downtown Official Development Plan, Brenhill should have only been allowed to build to 3 FSR at 508 Helmcken Street, not 17.9 FSR.
Because the judge quashed the development permit and rezoning due to the city’s lack of disclosure, he did not feel it was necessary to make a declaration on the Downtown Official Development Plan.
Who paid for the residents' court challenge?
According to Community Association of New Yaletown president Jon Green, residents put in their own funds and asked for donations to finance their court case. He informed the Straight that they spent many weekends and evenings in Emery Barnes Park handing out flyers and asking people to donate through the website. The association also met with strata councils in the neighbourhood.
Most importantly, according to Green, lawyer Nathalie Baker did "a large part of the litigation" on a pro bono basis. Green stated that she also "greatly reduced her regular fees and we could not have pursued the case without her generous offer".
Baker's brother, Gregory Baker, was an NPA candidate for council in the 2014 election. Their father Jonathan Baker is a former NPA councillor who broke with the party after it arranged to turn over city-owned sites to VLC Properties (now Concert Properties) to build rental housing, including many micro-units.
In the 1990s, Jonathan Baker became a fierce critic of the NPA and even ran for mayor against the NPA's Philip Owen in 1996. More recently, Jonathan Baker was courted by a new party called TEAM, which was modelled on the old centrist TEAM that controlled city government in the early to mid 1970s.
Nathalie Baker works with her father at the law firm Baker & Baker. In recent years, Jonathan Baker has become a harsh critic of Vision Vancouver. In several blog posts before the last election, he denounced the ruling party. In one of them, he outlined what the law states about municipal corruption.
Under the subheadline “Hypothetical questions”, Jonathan Baker wrote that Concord Pacific and companies controlled by the Aquilini family were “major contributors” to Vision Vancouver, and it was “alleged that they are both owners of some of the land near the Georgia Viaduct”.
“If that is true, could the universe contain the possibility that the money given to VISION by these corporations was ‘not unconditional?’ Would it be possible that Megg's [sic] pushing for the demolition of the viaduct relates in some way to contributions or prospects thereof to the party?” Jonathan Baker wrote. “Once the viaduct has been demolished will these land owners be offered development rights with tremendous density?”
Jonathan Baker's son Gregory was approved as a candidate by the NPA board of directors. The party didn't hold a nomination meeting so members didn't get a chance to vote on this decision. It was announced on July 24, a month before the Community Association of New Yaletown case was heard in court.
During the campaign, Gregory Baker tweeted that he was in Killarney talking to voters with NPA president Peter Armstrong.
None of this should be taken as evidence that Armstrong played any role in financing the legal challenge against Brenhill's rezoning and the development permit for the 162-unit project, which was slated to become home to Jubilee House residents.
In fact, Green of the Community Association of New Yaletown stated that Armstrong did not fund the litigation and it was not politically motivated.
(Armstrong, founder and major shareholder of Greater Canadian Railtour, contributed $470,000 to the NPA through his companies and personally. This amounted to 20 percent of the NPA’s contributions, according to a document the party released before the election.)
This is one of several court cases
Meanwhile, there are still unanswered questions about who's financing a court case seeking to have Mayor Gregor Robertson and Coun. Geoff Meggs declared “not qualified” to remain in office. Randy Helten of West End Neighbours and five others launched this litigation in relation to a CUPE Local 1004 donation to Vision Vancouver, but Helten refused to divulge to the Straight late last year who was paying for this court action.
The Straight asked Helten if Armstrong might be helping to pay the legal bills. Helten replied that people might speculate about this, but he wasn’t going to comment and didn’t want to “distract from the content of the case”.
Jonathan Baker posted a comment below an article about this on Straight.com pointing out that the lawyer representing Helten and other petitioners, David Wotherspoon, has done pro bono work in the past for homeless people.
In the highest-profile court action involving politicians, the NPA and its former mayoral candidate, Kirk LaPointe, are being sued by Robertson and Meggs for defamation. The same law firm that's advancing Helten's court application against the mayor and Meggs is defending the NPA and LaPointe.
Coincidentally that law firm, Fasken Martineau, represented Great Canadian Railtour on a $45-million financing package negotiated in 2006.
With lawyers charging several hundred dollars an hour, a judicial-review application can easily extend into the tens of thousands of dollars. If things get complicated and the matter is appealed, legal expenses can rise higher, particularly for losers who are left paying a portion of the winner's costs.
However, if legal services are being provided pro bono, as was the case in the Community Association of New Yaletown’s challenge of the Brenhill rezoning, it becomes far more affordable.
Because the association was awarded costs, a significant portion of Nathalie Baker's legal expenses will be paid by the losers—the City of Vancouver and Brenhill—if the case isn't overturned on appeal.
Through their taxes to the city, the public ends up having to pay to defend these actions and will have to cover some of Baker's legal costs if the decision stands. In addition, provincial taxpayers are responsible for paying judges, court clerks, and registry staff to process these claims.
(In 1996, then–B.C. Supreme Court justice John Bouck wrote a paper saying that it cost $17,000 a day to staff and operate a courtroom. Costs are probably considerably higher today.)
Keep in mind that LaPointe generated a great deal of political mileage during the recent civic election with his frequent complaints about residents having to take the city to court to fight Vision Vancouver's high-handed actions. LaPointe’s comments reinforced the NPA's campaign theme of increasing transparency and making civic government more accountable to the public.
Meanwhile, the sister of an NPA council candidate argued the Yaletown residents' case against the Brenhill rezoning and the 1099 Richards Street development permit. Nathalie Baker also argued a judicial-review application against the city's Short Term Incentives for Rental and Rental 100 program.
The Yaletown and STIR cases, both done for litigants without much money, certainly gave LaPointe plenty of ammunition in the municipal campaign.
Election could cost Jubilee House residents dearly
If the Brenhill decision isn't overturned, it's conceivable that residents of Jubilee House won't get new homes.
If the city enters into an arrangement to sell a site worth more than $400,000, it needs the approval of two-thirds of council. Swapping land with Brenhill is, in effect, a sale of the city site at 508 Helmcken Street.
Vision Vancouver elected six councillors and the mayor in the last election, giving the party seven of 11 votes in the council chamber. That's only 63.64 percent of council, which is short of the two-thirds (66.67 percent) requirement.
Let's say Brenhill gives up on the project and 508 Helmcken reverts back to the city. The three NPA councillors can conceivably prevent any future land sale if they secure the support of Green councillor Adriane Carr. And it would be due to effective legal work by the sister of one of the losing NPA council candidates.
As an aside, Elections B.C. administers local-election campaign-financing rules under the Local Elections Campaign Financing Act.
An election campaign of a candidate is defined in the legislation as a campaign “to oppose, directly or indirectly, an elector organization that is endorsing any other candidate in the same election”.
Many readers would likely view Nathalie Baker’s pro bono legal work to help Yaletown residents as an act of kindness. In recent years, there have been enormous efforts made to encourage B.C. lawyers to provide more pro bono work—and this should be celebrated when it occurs.
But it is worth noting that Nathalie Baker’s brother was a candidate in the election with the NPA. And the NPA’s mayoral candidate, Kirk LaPointe, made a point on the campaign trail about residents having to take the city to court to get Vision Vancouver to pay attention to them.
So if anyone has a complaint about how this whole situation unfolded, Elections B.C. would be the proper venue in which concerns could be addressed.
As far as I can see, there's no smoking gun to indicate how Nathalie Baker's pro bono legal work could be viewed under the Local Elections Campaign Financing Act as opposing, "directly or indirectly", Vision Vancouver, which endorsed candidates opposing her brother.
In the end, however, it would be up to the regulator of election finance, Elections B.C., to make any binding determination in this regard should anyone—including any resident of Jubilee House—wish to request an examination.