The private developer of a condo project that promised to include more than 200 units of social housing on land once owned by the provincial government doesn’t have to pay off the $200-million it owes until 2027. It has also not had to make any interest payments, a just-released contract shows.
Amid a housing crisis in Vancouver, the land has sat mostly vacant for 13 years.
Holborn Group’s controversial deal with the former BC Liberal government allowed the company to purchase land in central Vancouver next to Queen Elizabeth Park and demolish 234 dated units that were on the site. The deal was in exchange for a commitment to build the same number of government-subsidized units as part of a larger housing development. The company also planned for an additional 1,400 market-rate condos.
The contract between Holborn and the province specifies that the sale consisted of $245-million for the land and a presumed contribution of $88-million for social housing that was supposed to replace the 234 units that were demolished after the sale.
The contract was released Tuesday as a result of freedom-of-information requests made by former NDP MLA David Chudnovsky three years ago.
The contract shows no payments will be due until after Holborn Group starts getting occupancy permits for the completed market condos. But there is no sign of that happening any time soon. Payments will not be triggered until 2031, according to the contract.
Interest on the outstanding balance of around $200-million on the main parcel won’t start being charged until 2027, even though the value of residential property in Vancouver has doubled since Holborn bought the property in 2008.
But the company only had to pay $35-million at the start. The agreement originally said Holborn didn’t have to pay any interest on the remaining $200-million owing until 2021. The start date for interest payments was changed to Dec. 31, 2026, at some point during the Liberal government’s time in office after Holborn agreed to construct one 53-unit social-housing building.
The land deal has generated outrage almost since the beginning, although the minister responsible for it at the time, Rich Coleman, committed most of the purchase-price amount – though unpaid – to 14 social-housing buildings that are now home to almost 1,000 people throughout the city.
Holborn insisted in the agreement that the site had to be cleared of the 700 residents. That broke up a community that had existed since Little Mountain social housing was built in 1954 and scattered most of those people to various parts of the region.
Mr. Coleman did not respond to a request for comment. The Holborn Group was preparing a statement for Tuesday but it was not ready by deadline.
The six-hectare site has sat largely empty since 2009, except for the one new social-housing building that opened in 2015 and one temporary modular housing project that was added in 2019. A second, 70-unit social-housing building is currently under construction. The agreement says that Holborn will not have to pay interest on the $88-million social-housing part of the sale until 2050. As well, the company can get a low-interest loan from BC Housing, similar to what non-profit housing groups get, for that amount.
Advocates and some local politicians now say they think the province should try to renegotiate the deal or expropriate the property.
“The terms of the contract made it easy to sit on the land and watch the value increase. Now we’re calling on the current government to take back the mountain,” said Mr. Chudnovsky. “This Holborn development has been a colossal failure and an insult to homeless and underhoused people.”
He also suggested the government hold an inquiry.
Vancouver city councillor Christine Boyle said she would love to see the land come back into public hands, although she acknowledges the province likely has limited options to do that since Holborn hasn’t violated any of the terms of the agreement because of the way it was set up.
“It was either a sweetheart deal or gross incompetence. I hope the province is looking to see what options they have,” she said.
The province sold the land after the federal government initiated a plan in 1996 to turn over ownership of all social housing to the provinces. Other cities have redeveloped their social-housing sites – notably at Regent Park in Toronto – but not all chose to sell outright. B.C. did, though with the condition of replacing the older social housing.
Mr. Coleman said it would allow the province to use the sale money to fund a lot of other social housing in the province. Eventually, under pressure from the city, almost $300-million was put into 14 social-housing projects in Vancouver.