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Rendering of Mill House, part of the redevelopment of the Lynn Valley United Church property by Marcon Developments.

Urban churches are sitting on some of the priciest real estate in the province, and they're using the situation to their advantage.

Churches are wisely making their land holdings work for them by partnering with developers to boost revenues and, in some cases, provide affordable housing.

Lynn Valley United Church has partnered with Marcon Developments to redevelop into a smaller church building and transform the current parking lot into a four-storey, 75-unit condo building.

The 65-year-old building was in need of repair, and with a shrinking congregation, it had to reinvent itself. The church set up a redevelopment committee that approached the developer, and together they figured out a plan to build a new church facility and create an endowment fund for the congregation. For Marcon development manager Nic Paolella, the idea to partner with a church was unusual, but intriguing.

"In Metro Vancouver, as we are facing escalating house prices and land constraints, and we thought that it would be an interesting opportunity to engage with churches because they do often hold key sites in fantastic areas that could benefit from having a more urban use," Mr. Paolella says.

The target market is retired downsizers, people who'd raised families in Lynn Valley but didn't want to leave the neighbourhood. Presales for the project began in September, and already it's nearly 50 per cent sold. Prices for the one- to three-bedroom units are in the $350,000 to $600,000-plus price range.

It took two years for the rezoning process. The church has temporarily relocated to a space nearby, and they break ground on the project this month. The project includes a community amenity contribution for a daycare, as well as four housing units that are wheelchair accessible.

John Bruce is the church's project manager, and he's an example of their target market. Mr. Bruce is a downsizer who had to leave the neighbourhood because there is a shortage of condos.

"The difficulty in Lynn Valley is that it's mostly single family dwellings. It's very difficult for people to find places to retire to," he says.

Mr. Bruce, a retired engineer, calls it a unique partnership with Marcon because the church shares in the input, the risk and the profits. He was confident that the risk would be minimal, however, because of the location near a school, library and shopping mall.

"And with nearly half the units sold, the risk is down a lot. Personally, I was never worried. I thought, 'We have an excellent site, and as long as the bottom doesn't fall out of the market, we'll sell very well.'"

Mr. Paolella says the model works for the church because they retain equity in the land.

"They don't just sell it outright," he says. "They carry forward that equity in the land as a 50/50 partnership – they are going to benefit from the profits. That's key for us, and them. Just selling their land alone would not have yielded enough money to build a new church and create an endowment fund – because you need funds to run a church."

In the West End, near St. Paul's Hospital at Thurlow and Pendrell, Rev. Jim Smith and his Presbyterian church chose to embark on a different business model. Instead of redeveloping their land for market condos, they chose to expand the church and build rental housing that would take the form of a 22-storey tower. Bosa Properties will own and manage 162 market-rate units, and the church will own and manage 45 units as a housing society, set at affordable rates and intended mostly for seniors.

Central Presbyterian Church took on the project not because its congregation was shrinking, but because it was growing.

"We were out of time and space," Mr. Smith says.

The modest church had been rebuilt in 1976, but they'd outgrown the building. They shared with three congregations, as well as a daycare, food bank, Montessori school and other community groups. The church was heavily utilized from 6 a.m. to 10 p.m., seven days a week.

"We thought, 'We're sitting on some very valuable property and we could leverage that into something that would give us a bigger facility,'" he says.

They considered additions, but knew that once they went through seismic and building-code upgrades, they might as well rebuild. Now, they're acting as developers who'll generate a profit from the rentals. Rental housing would have been a bigger risk outside of urban Vancouver. But with the backing of the city and a huge demand, it made sense for the church and their project partners.

Architect Gregory Henriquez came up with the idea for the church to provide social housing with the money generated from the condo development.

"This is a really unique project where the value of the land is able to pay for a new church and 45 units of social housing, with no government subsidy whatsoever. It's being paid for by market rental housing," Mr. Henriquez says. "That's unheard of in the history of Vancouver. This is a one-off; a really unique model, something that should be really celebrated. It's a rare occurrence."

The high-rise will emerge from the church, which will occupy the first three floors. It will give parishioners 11/2 times the space they have now. The three floors above the church will be for the affordable housing units, and they've already got a long waiting list for applicants.

It's a win-win for church, developer and community, Mr. Smith says.

"We don't put any money in. We'll earn revenue from the housing society and commercial retail space," he says. "It's all mortgage free for us, so that's how we can afford the housing subsidy."

They were supposed to break ground on the project in the next month, but Mr. Smith still has to find a space to relocate the congregation. Once that happens, the project will proceed.

Bosa has worked with churches before, and has plans for two more church projects, including one in Victoria, says senior vice-president Daryl Simpson.

"Quite frankly, it's like a three-legged stool," he says. "We get to provide the religious institution with long-term financial stability, we provide much needed housing stock and we're able to maintain that place of worship in that neighbourhood as opposed to leaving it. The other option would be to sell the site to a developer and find another place. But that would obviously be difficult."

Selling the site off was never in the cards, Mr. Smith says. As he puts it:

"Our mantra is that we've been here 100 years and we plan to stay here 100 years."

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