B.C. Supreme Court quashes approval for Vancouver tower deal

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The City of Vancouver has received a serious legal rebuke from the B.C. Supreme Court, which has quashed approvals for two downtown towers where the city swapped land and approved more density to a developer in exchange for social housing.

The ruling has left the city and developer scrambling, unsure whether construction on the social-housing project – which has been going on for months – has to be halted immediately.

Justice Mark McEwan, agreeing with many of the main points presented by a group of Yaletown residents who started the lawsuit, invalidated the current development permit and rezoning bylaw. And he said the city has to hold new public hearings because staff hadn't presented complete or understandable information to the public.

"A public hearing is not just an occasion for the public to blow off steam: it is a chance for perspectives to be heard that have not been heard as the city's focus has narrowed during the project negotiations," he wrote. "It cannot be conducted on the basis that the public will get just enough information to technically comply with the minimum requirements of a public hearing."

He said members of the public need to be able to give their perspective on the whole deal. The city's public hearings allowed people to comment only on each project, without any reference to the trade-offs between the two.

Justice McEwan also said the public needs a clear explanation of the finances.

When news of the land deal first trickled out in 2013, the city said it was swapping its $9.5-million piece of land on one side of Richards Street, the current site of Jubilee House social housing, for a $2-million piece owned by Brenhill Developments across the street.

But in the deal, Brenhill got a more expensive piece of land and more density, while the city got social housing units, and a variety of rental units at low and market rates.

Later on, at the public hearings in July, 2014, the city said Brenhill would be providing $24-million worth of social housing – a 13-storey building with 162 units to replace Jubilee House on the new site; $1-million to help with tenant relocation; and $5.6-million for the bigger piece of land.

For its second tower, Brenhill also got the right to build a much taller building than the previous zoning allowed – 36 storeys with 448 units, 110 of them guaranteed as market-rate rentals.

"It is impossible to tell whether the numbers have a real-world justification or are simply used to set up an offset that the proponents have chosen, to give the appearance of adequate consideration," wrote Justice McEwan.

The residents who sued are jubilant about the decision, saying they think this now means the project is dead forever.

"It was a terrible deal for Vancouver," said Kerry Corlett of the group Community Association of New Yaletown, which formed last May largely in opposition to the two projects. "It should have been put to an open bidding process and give other developers a chance. And no one should be allowed to build a 36-storey tower on the corner of Emery Barnes Park."

The group's lawyer, Nathalie Baker, said it's a win for residents because it requires that "going forward the city has to be open, has to be transparent, has to be frank with citizens."

The city is tight-lipped, issuing only a short statement saying it is reviewing the decision.

And people in the development world are agog.

"It is a significant decision. To quash a bylaw is a pretty dramatic remedy," said Lisa Martz, a real-estate litigation lawyer.

She said this could force cities to work much harder to provide information that is transparent, but not in such overwhelming detail that the public can't assess it.

"It would be very significant if it became the new standard in a public hearing to provide the level of detail that is provided in a court," as the judge suggested would be useful, she said.

As well, it could require cities to figure out a different balance between providing citizens with information while protecting the privacy of businesses they're dealing with.