Oakridge is one of the most successful malls in the country, with sales ringing in at $1,533 per square foot and rental rates priced accordingly.
One of the biggest building projects the city has ever approved – a $1.5-billion remake of the high-end Oakridge Centre shopping mall – is going to be scaled back significantly after owners said it would be too expensive and disruptive.
The decision to reduce the project size is an unprecedented one for the real-estate giant Ivanhoé Cambridge, a real-estate investment and management firm whose global holdings total more than $40-billion. Its majority investor is a Quebec pension fund.
"That vision we had was great but it's just not the right vision for the centre," said Paul Gleeson, Ivanhoé's executive vice-president for global development, in an interview Tuesday after the company has been asked for several weeks about the plans.
The major changes coming to the revised project.
The mall won't be expanded by 800,000 square feet to a second floor, the number of residential units will drop from 2,900 to about 2,450, part of the planned rooftop park will be brought down to street level and street-level retail will be eliminated.
He said it was the first time the company has had to do something like this with one of its properties but that the complications surrounding the Oakridge redevelopment were unique.
The company said problems related to building around an aquifer underneath the site, as well as the difficulties of keeping tenants on board during eight years of construction, were both factors.
Local retail specialists also said that Ivanhoé was likely affected by strong public opposition to the large redevelopment and a drastically changing retail climate.
"With a slowdown in the economy, construction confidence is getting weaker and weaker and major retailers are pulling in their horns,"Vancouver retail consultant Ian Thomas said.
The company acknowledged that the departure of Target from Canada had affected plans, since it was supposed to be one of the key two-level tenants in the new mall.
In spite of that, Mr. Thomas said he was surprised that Ivanhoé had backed off expanding retail space in such a high-rent mall, especially since bigger malls are a trend.
"Normally, size is everything. It's go big or go home."
Oakridge is one of the most successful malls in the country, with sales ringing in at $1,533 per square foot and rental rates priced accordingly.
Others suggested that the project might have proven to be a better deal for the company's residential-development partner, Westbank Projects Corp.
As well, the opening of a new luxury mall at the airport and the imminent opening of another big mall in Tsawwassen are having an impact on the overall mall market in the region.
Rumours had been percolating around city hall for several weeks that the project was going to be reduced.
The city hasn't received a formal application yet, according to assistant planning director Susan Haid.
However, in a sign that something was awry, the city hadn't proceeded to what is normally the next step after the council approval in March, which would have been the approval of an official rezoning bylaw.
Because of the changes, there will be 90 fewer reduced-rent seniors and market-rental apartments promised for the complex, since the company's agreement with the city is that 20 per cent of the total number of units are slated for affordable housing.
Mr. Gleeson said the city's demands for community-amenity contributions (CACs), which were pegged at $148-million when the project was approved, weren't a factor.
"Would I love the city to reduce its CACs? Of course. But they could have done that and that wouldn't have changed my decision," he said.
Instead, the real factor was the cost and disruption some aspects of the project redevelopment were going to entail.
Mr. Gleeson said the rooftop park's weight would have meant having to build larger columns in the mall, which would have meant taking away considerable tenant space.
As well, the complications of the project overall would have meant eight years of construction, instead of the five the company is now aiming for.
He said the firm is going to have a revised application by the spring and is hoping for revised rezoning by the end of the year.
One of the many members of the public who had objected to the massive size of the redevelopment during public hearings is relieved to hear about the changes.
"It will be somewhat smaller. They're not going to go back to what [had been approved many years before] but the number of towers will probably be reduced by a few," said Allan Buium, a member of the steering committee for the Riley Park-South Cambie community visions group.
He and his neighbours will be watching closely to see what the new application looks like.
Frances Bula