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Proceedings from the DV2020 Heritage Charette

September 28th, 2004

INDEX

Introduction

During the Downtown 2020 Conference series, and the wider public ideas gathering phase, one common consensus was that restoration of the vacant top floors of Old Town's Heritage buildings was critical to the revitalisation of Downtown. On Sept 28th, 2004, we held the DVCA 2020 Heritage Charette - bringing together some of the leading stakeholders in Victoria's Heritage conservation to ask how we could best tackle the barriers to heritage restoration downtown.

In attendance

Frances Thorsen, Results Performance Management – Facilitator
Andy Kestaloo
Archie Campbell, Civic Heritage Trust
Richard Holmes, Developer
Tom Moore, Architect
Bruce Carter, Chamber of Commerce
Lee King, CMHC
Chris LeFevre, Developer
Ken Cloak, Colliers
Jack Basey, City of Victoria
Catherine Umland, Civic Heritage Trust
Pat Frey
Bill Patterson
Steve Barber, City of Victoria
Rick Goodacre, Heritage Society of BC
Bob Cross, Chair
JC Scott, Designer
Roger Tinney
Pam Madoff, City Councilor
Mohan Jawl
Andrew McKinnon, Colliers
Catherine Umland, Victoria Civic Heritage Trust

Goal of Meeting

Identify barriers to redevelopment of heritage buildings in downtown Victoria, and discuss/develop ideas to breakdown barriers

Barrier One: Building Code

Discussion

  • Seismic upgrades is expensive and risky
  • Application of code is too rigid – it needs to have some flexibility
  • The alternative code didn’t work
  • There was no provision for existing buildings
  • There are issues with single exits and sprinklers
  • Regulatory inconsistencies – City not “walking the talk” we need stronger leadership from the City; there are problems with sidewalk widening and reduction of parking spaces; seismic upgrade tends to be subjective (how much needs to be done)
  • Planning policy downtown is OK

Recommendation

  • Equivalency discussion – is there some flexibility with inspectors? We need to negotiate equivalencies to building code and to deal with resulting liability concerns.

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Barrier Two : Financing/Lending

  • Insurance – 95% on new project, 60% for rehab
  • Lending policy favours new development
  • Land Values are really high (although not on an international scale)
  • Why are people paying so much for heritage buildings if you can’t make any money, are they overvalued?
  • Hidden costs and uncertainties – seismic, electrical/mechanical systems
  • Michael Williams – non-conventional financing (rental unit loan conversion program)
  • Ron Greene couldn’t get financing for Capital Iron seismic upgrade
  • Unless owner has owned the building for some time, you cannot afford to rehab. Successful projects are those that can apply low frontal costs.
  • Need someone to take out/reduce the risk on projects (CMHC?) Can the City absorb some of the risk? (Victoria Agreement) The City can borrow at cheaper rates, but would want other governments as partners.

Recommendations

  1. Approach non-conventional lenders (i.e.: Credit Unions, pension funds) for financing
  2. Educate lenders about restoration projects

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Barrier Three: Incentives – policies and adequacy of grants

Discussion

  • Look at models that work in other cities.
  • There is an opportunity to increase incentives with an offsetting formula for disincentives.
  • Could “new development” money be given to Civic Heritage Trust to administer as grants for use in Old Town?
  • Boston expropriates buildings and sells for market value “for greater good.” Victoria has maintenance bylaws; we can’t force redevelopment but it helps preserve buildings for future development opportunities.
  • Need some flexibility for different types of incentives based on size and scale of project.
  • Problem with “bottom feeders and slumlords” of incentive programs.
  • What would be the cost to the city if they extended the incentive program to 20 years? City is at maximum incentive level allowed as based on legislation.
  • Why not ask Province to participate in a 50-50 increase in CHT budget for a target area?
  • Cities that succeed have a strategic downtown plan.

Recommendation:

  1. Set up committee to research best practice
  2. CHT to review formula for grant program and $50K cap. Need to delineate between minor projects and major renovations.

Incentives

  1. Increase cash grants
  2. Cash instead of TIP
  3. Longer tax holidays
  4. Loan assurance program by City
  5. Unused density – city buys and sells it strategically to developers to use in other redevelopments
  6. Alternative package – long-term vs. short-term ownership
  7. Increase CHT grants – funding from increase in taxes from rehabilitation of other heritage buildings
  8. Identify area (Old Town) – impose tax on entire area and use that money to redevelop that area. CHT could create separate funding formula to assist with this redevelopment.

Disincentives

  1. Expropriation.
  2. More aggressive enforcement of maintenance bylaws – safely board up derelict buildings.

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Barrier Four: Tax system distortions – federal, provincial, property, GST, income tax

Discussion

  • How do you balance out the inequity between encouraging development and paying higher taxes for redevelopment?
  • City should reward those who do a good job. Maintaining exteriors are more costly for heritage buildings then for new buildings.
  • Income tax system favors Greenfield development (i.e. GST charge)
  • Spirit of Christmas building – taxes went from $17,000 to $70,000

Recommendation

  1. Tax the land only
  2. Tax those who don’t improve
  3. City could provide a cash grant instead of property tax exemption
  4. Chamber of Commerce already lobbying to address GST issue

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Barrier Five: Attitude – recognition of the value of heritage

Discussion

  • Need to educate financial industry, lawyers and brokers about importance benefits and implications of heritage preservation
  • How do you educate and get everyone on board?

Recommendation

    1. Interview heritage building owners with vacant upper stories – what is stopping them from redeveloping?

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Goals – Manageable short term and long term

  1. Create a pilot project – target area (Government/Yates/Wharf/Johnson already started). Establish budget, negotiate with property owners.
  2. Complete Academy Close – linkage of alleys and courtyards from Bastion Square to Herald Street. The CHT could develop educational materials and the concept of the project. Revisit improvements already in place – would lend momentum to move new concept area forward. We need consensus of this group to proceed with projects, educate the public at large.
  3. City should show political and administrative will to lead by instigating projects and educating the public at large.
  4. Tactical approach – DV2020 and City could facilitate meeting of property owners in the area – ask them what they need/want to make it happen. Make a case for both immediate and long term benefits which can only occur with cooperating amongst the current owners (look at example of Harris Green – treat it as an improvement area)
  5. Site specific pilot – focus knowledge and expertise to raise level of comfort for everyone involved (property owners, lenders, city, citizens etc)
  6. A letter of support for a pilot from this working group would send clear message to Council re: appropriate levels of investment for long term returns.
  7. CHT would not preclude other efforts and opportunities – all heritage buildings should benefit equally.
  8. BC Heritage Trust needs to be brought back to the table. “Invest in Victoria Heritage” from new tourism dollars.
  9. Federal assistance – New Deal for Cities – may be an opportunity for funding.

 

 

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