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In 1971, Vancouver's Gastown was declared a historic district by the province of British Columbia. In the years following, its many turn-of-the-twentieth-century buildings on and around Water Street were given a much needed facelift. The district, gussied up with art galleries, antique stores and ethnic restaurants, quickly became one of Vancouver's prime tourist attractions. Named after Captain John (Gassy Jack) Deighton, who built Vancouver's first saloon (and who was apparently so named because he had gift of the gab), Gastown, whose heritage designation had been triggered by the need to protect the historic buildings from a proposed freeway, basked in its image as Vancouver's most attractive neighbourhood.

By the 1990s, however, Gastown had lost its lustre. Gastown abuts the Downtown Eastside, by then notorious for its high unemployment rate and drug dealing, and many former businesses lay empty, disfigured by graffiti. Chic boutiques had given way to tacky souvenir shops, and Woodward's, the iconic century-old department store on West Hastings Street (it borders the Downtown Eastside and Gastown), closed its doors.

"Real estate development in Gastown had gone through many cycles -- growing and stalling down the years," explains Jon Stovell, general manager of Reliance Holdings Ltd. and president of the Gastown Business Improvement Society.

"By the end of the 1990s, the district was clearly on a downward spiral and the business community was very frustrated at the way Gastown was going. Things were getting so bad that something had to be done." To that end, in 2003, the City of Vancouver, with input from developers and community groups, put in place a five-year Gastown Heritage Management Plan to encourage real estate companies and investors to upgrade and rehabilitate Gastown's old buildings with the hope that it would help to bring the neighbourhood back to life. The city offers developers financial incentives such as grants of up to $50,000 to repair and restore the facade of a heritage structure (108 buildings are listed) as well as exemption from paying property tax for up to 10 years.

"These kinds of financial incentives are common in many other communities around North America with heritage buildings, but they had never been tried in Vancouver," says Larry Beasley, co-director of planning for the City of Vancouver.

"We knew we had to come up with a new approach to revitalize the area. We were very worried about the lack of real estate investment in what is the most valuable stand of heritage property in the city." The Gastown Heritage Management Plan is already helping to bring the historic district back to life. According to Mr. Beasley, 11 new real estate proposals are currently on the table, but the private sector has also been playing a role in revitalizing the neighbourhood. The Gastown Business Improvement Society, a non-profit organization made up of Gastown property owners and local entrepreneurs, has designed a variety of programs, including safety patrols, graffiti removal and organizing festivals and special events, to entice locals as well as tourists to come back to the neighbourhood and do business.

"All these things have helped to create a vibe, a positive feeling about Gastown," Mr. Stovell says. "Now developers and entrepreneurs from outside the neighbourhood are seeking business opportunities here as well." Mr. Stovell's company, Reliance Holdings, has long had commercial interests in the area. The company, which specializes in acquiring, redeveloping, leasing and managing commercial real estate and residential rental properties, has developed an expertise in heritage buildings, largely because of its considerable investment in Gastown that dates back many decades, before the current upsurge in real estate activity.

As far back as 1968, for instance, Reliance Holdings purchased the Malkin Building at 65 Water St. Like much of Gastown's heritage stock, the six-storey brick building had housed many types of commercial enterprises. Constructed in the early 1900s, it first served as a warehouse for a wholesale grocer, then it became a garment factory.

After that, it lay vacant for many years. In 2002, Reliance Holdings decided to renovate the rapidly deteriorating structure. Bringing it into line with modern building codes, the real estate developer converted the Malkin Building into 120 rental apartments.

Next door to 65 Water St. was a vacant lot. Reliance Holdings has transformed that into a 43-foot-high glass atrium (it has views over Vancouver's harbour and the mountains), with 5,621 square feet of commercial space -- 3,488 square feet at ground level and 2,133 square feet on the mezzanine.

Its neighbour, 55 Water St., is a mixed-use, heritage building, which Reliance Holdings has also turned into commercial space and 56 rental apartments. Designed primarily for folk who work from home or who need a combined living space/studio, the apartments are embellished with attractive "heritage" touches such as wooden beams and exposed brick walls.

Another Gastown project that was on the drawing board for a couple of years, but which has now become a reality, is the oddly named Storyeum, a tourist attraction that is part living history museum, part live theatre, and traces the history of British Columbia and Western Canada. Opened last June, the 104,000-square-foot underground complex, which sprawls across seven specially designed "sets" -- a challenge for construction crews apparently -- represents different eras of Western Canada's history from aboriginal life to the building of the railway.

Storyeum is the brainchild of entrepreneur Danny Guillaume (he founded West Coast Video in 1998 and Petcetera in 1994, later selling both companies), the president and CEO of Vancouver-based Historical Xperience Inc.

"I brought the concept for Storyeum to the City of Vancouver over three years ago," Mr. Guillaume says. "The argument that I made to them then was the link between a tourist attraction and economic development. An attraction such as Storyeum creates traffic and in time encourages real estate developers to invest in more infrastructure -- restaurants, retail stores and so on." Storyeum is tucked away under the Woodwards Parkade, which, before it was renovated by the City of Vancouver to the tune of $35-million, had become one of Gastown's worst eyesores.

Mr. Guillaume and a group of private investors ponied up $22.5-million to build Storyeum, which is Vancouver's most costly tourist attraction since the construction of Science World, part of Expo '86. Above Storyeum, the Woodward's building is also getting a new lease on life. In 2003 the City of Vancouver purchased it from the province for $5-million, half of its market value now, according to the City of Vancouver's Mr. Beasley. The City Council came up with a plan to redevelop the site involving local community groups and First Nations and Downtown Eastside residents, whose primary concern is having access to affordable housing.

In September, 2004, the Woodward's Redevelopment Group -- a joint initiative involving Westbank Projects Corp., Peterson Investment Group Inc. and Henriquez Partners Architects -- were given the mandate to bring the building back to life. The project will include retail space, modestly priced rental space for small businesses, studio space for the University of British Columbia, a public park, a daycare centre, parking for around 300 vehicles, a community space for staging special events and apartments for low-income families.