It took well over a year, but Mayor Gregor Robertson and his team has persuaded the explosively growing social-media company Hootsuite to stay in Vancouver.
On Thursday, the city announced it has struck a deal with Hootsuite to let the company buy a Vancouver-owned building in Mount Pleasant through a lease-to-own arrangement. And there will be more efforts like that, says the mayor, as the city fights to nurture fledgling head-office businesses to make up for ones that left over the last two decades.
“We’ve been courting Hootsuite for over a year to convince them to sink their roots deeper in Vancouver as they grow,” Mr. Robertson said. “Vancouver lost a lot of head offices in the past. And we believe the most effective way to replace them is to grow them.”
The deal will see Hootsuite, which started in 2008 and went from 80 to 230 employees this year, lease the 33,000-square-foot space with an option to buy.
The building, until recently the home of the Vancouver Police Department investigations units, is a block west of Main in one of the city’s rare industrial zones. It is assessed at $9.6-million.
The city news release quoted chief executive officer Ryan Holmes as saying: “Since we first started HootSuite, we’ve been proud to call Vancouver our home. We’re excited to have found a new location that allows us to stay and expand here. We’ve had strong support from the city.”
Avison Young broker Justin Omichinski, who specializes in the fringe areas around the downtown where start-ups are tending to gravitate, said it’s good news for the whole tech sector. Hootsuite and Mr. Holmes will get much bigger premises close to downtown at a relatively low rate, likely under $30 a square foot – something that is hard to come by in Vancouver.
“It’s a pretty sweet deal for him,” Mr. Omichinski said.
Although the building is in an industrial zone, it has a grandfathered permission to be used for commercial purposes because of its previous use as a police office.
That’s a rare circumstance. Start-ups and tech companies in the city frequently push to be allowed to operate in industrial zones but are rejected if they don’t fit under particular definitions of industrial – unless they can find a building that has a grandfathered commercial use.
Instead, growing tech companies trying to expand are usually forced to make a choice between paying a lot for downtown office space or opting for lower-cost premises in areas like Railtown near the port or in suburban business parks.
Mr. Omichinski said the deal is also great for smaller tech companies, which are now going to get dibs on all the bits and pieces of space that Hootsuite had gradually taken over in Railtown.
It’s not the first time the city has hustled to get businesses to remain in Vancouver, or to come in. “We’ve definitely worked hard these past few years at keeping fast-growing companies happy in Vancouver,” Mr. Robertson said.
The city worked hard to “accelerate bylaw changes,” he said, to allow a wider range of uses in its False Creek Flats and Broadway tech areas. That helped keep Anthony von Mandl’s Mark Anthony Group in the flats and attracted the BC Lottery Corporation and HSBC to the Broadway tech park near Renfrew.
Telus announced last year it would expand and consolidate its head-office functions in Vancouver in a glitzy new complex. The city agreed to sell Telus one of its parking lots as part of the deal, and the application went through city processes in record time.
<QL>Special to The Globe and Mail