Archive for March, 2010

$450-million hotel-casino complex announced for False Creek

March 29, 2010 Leave a comment

100,000 square foot casino, two hotels to sit next to B.C. Place

Ian Bailey
Vancouver, BC — Globe and Mail update
Published on Friday, Mar. 26, 2010

The B.C government has announced the construction of a $450-million new hotel-casino complex attached to BC Place.
“I am pleased to confirm what many people have been discussing,” Premier Gordon Campbell told a news conference in the domed stadium.

Edgewater Casino on False Creek is to be moved as part of the project and the new 100,000-square-foot casino operation, also operated by Paragon Development Ltd., is expected to generate $130-million in annual gambling revenues to be distributed to the province
PavCo, the Crown corporation that manages BC Place, has struck a deal for a 70-year lease with Paragon.
“We are going to build a destination anchored by two hotels,” said Scott Menke, Paragon president.
The project is expected to create 8,500 direct and indirect jobs during construction and operation.

Assuming the city of Vancouver approves a rezoning application for the project, construction is supposed to begin early next year and be completed in mid-2013.

But events are to be held at BC Place during construction around the replacement of the stadium’s roof, which begins in May and is to be done in 2011.

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March 16, 2010 Leave a comment

Stripped Down: Vancouver landmark makes way for a new ‘hood

Say goodbye to the Cecil strip bar and hello to the Rolston, a condo project developers hope will anchor a new neighbourhood called Midtown

Source: Kerry Gold, Vancouver — From Friday’s Globe and Mail Published on Friday, Mar. 12, 2010

One night in late January, developer Will Lin held a catered party for the closing of Vancouver’s Cecil strip bar, complete with strippers and lobster bisque appetizers.
Topless strippers, who had been told to keep their pants on, worked the pole for the suit-and-tie crowd that had assembled to hear about a new condo project called the Rolston.
It was an awkward merger, but one that symbolized the end of the era of strip bars and sex shops and the introduction of a new neighbourhood the developer calls Midtown.
Midtown is the future neighbourhood at the north end of the Granville Street Bridge, currently anchored by the Cecil Hotel and the Yale Hotel and Pub at 1300 Granville. By the summer of 2012, the 23-storey, gold LEED-certified Rolston condo development and restaurant is scheduled to stand where the gritty old Cecil is now.
The Cecil closes permanently this summer. Mr. Lin, president of Rize Alliance Properties, tried auctioning off the club’s strip pole, but ended up buying it for charity himself, for $3,000. Pre-sales for the Rolston begin this month, ranging from $350,000 for a one-bedroom condo to $650,000 for a two-bedroom.
The Rolston and a Cressey condo development at Drake and Howe streets are the first phase of a new neighbourhood that is to get under way in the next five years. Gone are most of the pornography and drug-paraphernalia shops that dominated that part of Granville for so many years. The marketing for the Rolston is aimed at an urban demographic attracted to nearby cultural hot spots that have popped up, such as the Dance Centre, Pacific Cinematheque and the Roundhouse Community Arts Centre.

“We are selling a lifestyle, meaning they are going to use their homes for a place of rest and do a lot of entertaining in the neighbourhood,” Mr. Lin says.
The Cecil Hotel pub is credited for being the locale where Greenpeace was spawned in the 1970s, back when it was a pool hall. But while the Cecil Hotel has long been a familiar landmark at the foot of the Granville Street Bridge, it’s past its expiry date, Mr. Lin says.
“The demise of the Cecil as a strip bar is attributable to the Internet. I was talking to the owner and the revenue was definitely not at an all-time high. And I don’t think we are taking on a big public amenity there that everybody else wants by demolishing the Cecil.
“When people start moving into a neighbourhood, they turn it into a neighbourhood that they want to live in,” he adds.
The Yale pub, famous for its blues acts, will also get a facelift and continue as a major destination for blues-music fans. As for the hotel part of the century-old Yale, originally built to house CPR workers, the 44 residents won’t be forced out. Part of the deal with the city is that the rooms will be renovated for 44 single-room occupants.

The long-term city plan, approved a year ago, involves light industrial property, a public-market-type area, condominiums, retail and better transit routes. The plan includes a radical transformation of the north end of the bridge: the two off-ramps – also known as the “Granville loops” – will be removed entirely and replaced by the traditional street grid. The area, bounded by Drake, Howe, Pacific and Seymour streets, includes the redevelopment of several city-owned sites composed of market and non-market housing. The dark area under the bridge will be better utilized as a market-style shopping district that will resemble the look and scale of Granville Island.
In other words, the loops at the north end of the bridge are a waste of space. With 31,000 cars on the Granville Street Bridge every day, only 5,000 use the west loop and 3,600 use the east loop, according to a city study.
“The transportation plan looked at some site-specific initiatives that would take areas of the downtown that had really been designed to favour automobiles and change it to favour pedestrians or transit or cyclists,” senior central area planner Michael Gordon says. “And definitely one of the areas that was problematic was where we have the two loop structures.
“The city should really primarily be designed for pedestrians and cyclists and transit, rather than being auto-oriented. Car drivers are a minority in the downtown peninsula.”
As an example, city analysis found that 75 per cent of people who shop at trendy Urban Fare in nearby Yaletown arrive on foot, not by car.
Off-ramps do not move traffic effectively and they also waste valuable space that could be used to densify the area. They are an outmoded idea from the 1950s, when cars ruled. “They were built when freeways and on-ramps and off-ramps were the mode of moving traffic,” senior development planner Anita Molaro says.
For pedestrians, added crosswalks will link downtown with the shoreline of False Creek. As it is now, zooming cars make the walk to the water from downtown an awkward proposition.
As to whether the area will be called “Midtown” remains to be seen. Mr. Gordon says some names given to new neighbourhoods stick, while others don’t. Nearby Yaletown was named after the CPR workers who went to work there and had their houses from the town of Yale shipped down on barges. Those houses are long gone, but the name lives on. Maybe the new neighbourhood will be called the Granville Loops, even when the loops are gone?

      Rendering of the Rolston, planned for the new Midtown development in Vancouver. Suite interior. Credit Rize Alliance Properties Ltd.

Mr. Lin has lived in Vancouver since the eighties and has been behind several projects in Yaletown. He sees the Rolston as one of the pioneer city developments that mix social and market housing. When the Cecil is demolished and the Yale Hotel undergoes its renovation in about a year, the 44 single-room occupants at the Yale will be relocated to other social housing. When the Yale renovation is finished by the summer of 2012, those occupants will be given the opportunity to return to the remodelled rooms.
However, many of the seniors who resided at the Yale Hotel have already moved out, says former owner Waide Luciak, who owned the Yale from 1987 until Mr. Lin purchased it two years ago. As part of that deal, Mr. Luciak has plans to buy the Yale building back from Mr. Lin and return to business as usual.
Mr. Luciak says his single-room occupants had been at the Yale Hotel for many years. One senior, who recently died just before reaching 100 years old, had lived in the hotel for most of his life.
All the occupants who left did so because they had been offered better accommodation, Mr. Luciak says. “People were coming around from different housing societies and telling them that if they wanted, they could move into units in concrete high-rises that are 50 per cent larger with cooking facilities.
“It is better accommodation subsidized by government, whereas I am a private enterprise – I can’t afford to do as much as government can. But my rents are a little lower. I am a friendly landlord who hasn’t given increases. I love the old boys.
“Typically what happens is, the old boys who live upstairs call the downstairs bar their living room. They are in the living room every day in a certain seat they call their own. I know all of them. They are very much like family. Upstairs, a lot of them had pictures of my kids on the wall.”
Although condo growth in Vancouver is often associated with bland gentrification of streetscapes, Mr. Lin insists the character of the Yale will be retained. And he is not just referring to retaining single-room occupants. The Yale Pub is famous in Vancouver for playing host to artists such as Stevie Ray Vaughan. Before he died in 2005, English bluesman Long John Baldry was a regular performer at the pub. Mr. Lin says there was no question about maintaining its legendary status as a blues destination.
“We’re creating a real neighbourhood here. We are creating a building that is a representation of what the neighbourhood is all about. It’s not about an ivory tower – it’s full of different mixes.”

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March 16, 2010 Leave a comment

Mega-deal signed for new Vancouver entertainment and retail complex

Source: Michael Smyth, The Province

The B.C. government has just inked a mega-deal with a private-sector partner to develop the lands west of B.C. Place Stadium, and sources are whispering words to me like “all-in,” “double-down” and “baby needs a new a pair of shoes!”
Picture this, Vancouver: A huge new entertainment-and-retail complex, directly attached to the refurbished stadium with a snazzy retractable roof, and all anchored by — you got it — a shiny new casino.
That was the red-hot buzz burning along the government grapevine Thursday, as word leaked out that the B.C. Pavilion Corp. had signed the long-awaited development deal for the stadium lands.
“I can confirm that we have an agreement with a party and there will be an official announcement in about two weeks,” said David Podmore, CEO of the Crown corporation that owns our loved-and-hated pillow-top stadium.
Podmore confirmed the air-supported fabric roof will be deflated once and for all in May, and construction will start immediately on the new, $563-million, retractable model.
He said the 700,000-square-foot parking lot between the Cambie Street Bridge and the stadium will be transformed into a commercial-entertainment extravaganza.
“We want to create an exciting environment that will reanimate and reactivate a plaza that, right now, is pretty sterile,” he said.
When I put it to him that the private-sector partner on the project is Paragon Gaming of Las Vegas, and that the plans include a large casino, Podmore said: “I can’t confirm that. I’m not denying that. I can certainly confirm Paragon was one of the parties that submitted a proposal.”
Paragon Gaming owns the downtown Edgewater Casino at the Plaza of Nations near Yaletown. It has struggled at this location and would presumably be shut down under the B.C. Place plan.
Paragon Gaming is the brainchild of founding partners Diana Bennett and Scott Menke of Las Vegas. She is the daughter of William Bennett, who for many years ran the Circus Circus and Excalibur casinos.
Paragon spokeswoman Naomi Strasser also refused to confirm or deny that the company had landed the B.C. Place development deal: “Paragon did participate in a request-for-proposal, and that’s really all I’m allowed to say.”
Podmore said the B.C. Place lands will be developed under a long-term lease and will hopefully create a vibrant new area that will link Robson Street to the False Creek waterfront. He said Terry Fox Plaza and adjacent lands owned by Canadian Metropolitan Properties are also being redeveloped, and the lands east of the stadium will be leased and developed under a separate deal still in the works.
Meanwhile, the new roof and other upgrades to B.C. Place — to be completed in 2011 — will transform the entire area, he said.
“It kind of bugs me that people think we’re just rebuilding a sports stadium,” he said. “When we’re done, this will be the premier multi-use facility on the continent.”
The renovated stadium will be home to the B.C. Lions football team and the Vancouver Whitecaps Major League Soccer franchise. The 2011 Grey Cup is already pencilled in and Podmore is dreaming even bigger.
“We have tried to make sure the stadium can still accommodate professional baseball,” he said.
Is he saying Vancouver can land a Major League Baseball franchise?
“You never know,” he answered.
Tourism Minister Kevin Krueger also played the don’t-ask, don’t-tell game with me about a B.C. Place casino. “I have my hands over my ears,” he said, as soon as I mentioned Paragon Gaming. “I’m not confirming and I’m not denying.”
Krueger — once the governing Liberals’ fiercest opponents of expanded gambling, by the way — said plans for B.C. Place and environs will blow people away. “This will be like the transformation of the Expo 86 lands — possibly bigger,” he said.

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February Home Sales Strong Despite Olympic Fervor

March 12, 2010 Leave a comment

Vancouver, BC – March 11, 2010.

The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 63 per cent to 5,955 units in February compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province declined 13 per cent compared to January 2010.

“Home sales continued to moderate in February after the record pace of the fourth quarter.” said Cameron Muir, BCREA Chief Economist. “However, February’s performance was better than expected considering many households were preoccupied with Olympic gold.”

The BC residential sales dollar volume increased 91 per cent to $2.96 billion in February compared to the same period last year. The average MLS® residential price climbed 17 per cent to $497,807 over the same period.

“Low mortgage interest rates are continuing to underpin consumer demand and fuel first-time homebuyer activity,” added Muir. “Improving economic conditions are expected to bolster consumer confidence over the coming months.”

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The tax implications for Canadians buying U.S. property

March 12, 2010 4 comments

Source: Benita Loughlin, Financial Post Published: Friday, March 05, 2010

With the Canadian dollar above US90¢ and real estate prices in the United States at a historical low, successful Canadian entrepreneurs who may have surplus funds in their business or may even have sold it may be planning to invest in U.S. property.

Business owners who may be weighing the costs and benefits of purchasing a condo or home, or other U.S. property such as shares, must remember to factor in any applicable U.S. taxes.
Business travellers to the United States have the opportunity to see places first-hand. Although business owners should be familiar with U.S. business tax rules, they may not necessarily know about personal tax rules.

Generally, income from certain U.S. investments, including real estate, is subject to U.S. tax even if you are not a U.S. citizen or resident. U.S. investments are usually taxed in three ways: on the income they generate, on their sale or gift, and on the death of the owner.

There are complicated U.S. and Canadian tax implications business owners need to consider if they plan to buy U.S. property through their company, especially if they plan to use the asset personally. However, this article focuses on the tax implications of buying U.S. property personally.

But if you are a business owner who, planning ahead to retirement, decides to buy a condo in say, Arizona, and rent it out. Assume you receive US$10,000 in rent in 2010 and our mortgage interest, maintenance costs, property taxes and depreciation total US$8,000.

A 30% withholding tax normally applies to rent paid to a Canadian resident for real estate in the United States. As such, your tenant should withhold 30% of the rent paid to you, or US$3,000, and remit it to the Internal Revenue Service. That can be eliminated by giving the tenant or agent a form that states you will file a tax return and pay tax on the net (rather than gross) rental income. You must file a personal U.S. tax return, separate from any business returns, by the end of the year. U.S. tax on the net rental income income in the example would be US$2,000 ($10,000 rent minus $8,000 expenses). If the tenant withholds tax, you can receive a refund, to the extent the withholding tax exceeds the tax payable. State tax (and possibly a small amount of city or county tax) may also apply to U.S. rental income.

Once you elect to pay tax on net rental income, this election will apply to any U.S. rental real estate you hold now and in the future.

You should file a return even if you have a rental loss so you can carry the loss forward to offset future gains and to claim your deductions, including depreciation, which is not a discretionary deduction (in fact, it will reduce the cost base of the property even if you don’t claim it).

If you decide to sell your condo, a withholding tax of 10% of the sale price normally applies under the Foreign Investment in Real Property Tax Act of 1980. You must also file a U.S. tax return to report the sale for income tax purposes. If you realize a capital gain on the sale and the FIRPTA tax

withheld is more than the U.S. income tax you owe on the capital gain, you can get a refund for the difference. Again, state tax (including withholding) may apply.

You may be able to reduce the FIRPTA withholding by applying to the IRS before the sale for a “withholding certificate” if your expected U.S. tax liability is less than 10% of the sale price.

You must also report rental income and capital gains from your U.S. condo on your Canadian tax return. You can generally claim a foreign tax credit for the US tax you paid to reduce your Canadian tax.

When you’re considering selling U.S. real estate, remember the U.S.-Canadian exchange rate will affect the amount of a capital gain taxable in Canada because the cost of the property is converted to Canadian dollars at the exchange rate at the time of purchase and the proceeds are converted at the exchange rate at the time of the sale.

If you still own your condo when you die, U.S. estate tax may apply. This tax was repealed for 2010, but it will be reinstated for 2011 (and possibly some or all of 2010) and will continue to impose a potential burden on the estates of Canadians who own U.S. real estate and other property. Some states also have their own estate taxes.

There are ways to reduce your estate’s potential U.S. tax. However, this type of tax planning is complicated and professional advice is advisable.

If you choose to give your condo to a family member during your lifetime rather than in your will, U.S. gift tax will apply. You may also have to pay Canadian tax if a capital gain has accrued, but no foreign tax credits are allowed in Canada for U.S. gift tax. Due to the different tax treatment of gifts in Canada and the United States, gifting real property in the United Staets is rarely advisable. Tax consequences are different for other types of U.S. property.

Like rental payments, dividends and interest paid by U.S. corporations to Canadian residents are subject to U.S. withholding tax. The Canada-U.S. tax treaty limits the tax to 15% for dividends and zero for interest in most cases. You do not have to file a U.S. tax return to report dividend income on which the correct tax has been withheld or for interest that is exempt from U.S. income tax.

When you sell your shares in a U.S. corporation, Canadian tax will apply to any capital gain but U.S. tax will normally not apply as long as you are not, nor have been, a U.S. citizen or resident. U.S. tax may apply if the shares are in a private company with a majority of its value derived from U.S. real estate. U.S. gift tax does not apply to gifts of U.S. securities

by Canadians even though U.S. estate tax may apply to them.

Tax implications should not discourage Canadian entrepreneurs from buying property in the United States. If you pay careful attention to meeting your tax obligations and take advantage of any opportunities to reduce U.S. liabilities, you can reap the benefits of owning the property while minimizing your costs.

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Victory for non-smoking condo couple in B.C.

March 12, 2010 Leave a comment

A decision of the British Columbia Human Rights Tribunal late last year could have an enormous effect on owners and occupants of condominiums and rental apartments across Canada in the coming months.

Paul and Rose Kabatoff live in a suite in an attractive three-storey condominium building in Langley, B.C. They both have a number of health problems including respiratory illnesses and allergies that are negatively affected by second-hand cigarette smoke.

In August 2008, smokers moved into the suite below their own. The Kabatoffs appealed for help to their condominium corporation (known in B.C. as a strata corporation), claiming that the second-hand smoke coming from their neighbours downstairs worsened their health problems. They provided a letter from their doctor supporting their request.

Ideally, the Kabatoffs wanted the condominium to adopt a no smoking bylaw, which it would not do.

Eventually, they filed a claim with the B.C. Human Rights Tribunal, asserting that the condominium failed to provide them with a housing environment free of second-hand smoke. They alleged that the condominium refused to do anything about the smoke issue, and that they were told that if they had a problem with the smokers they should move.

The B.C. Human Rights Code makes it illegal to deny accommodation to a person because of his or her physical disability (among other reasons) without “a bona fide and reasonable justification.” The Ontario code has a similar prohibition, stating that every person has a right to equal treatment with respect to the occupancy of accommodation without discrimination by reason of disability (and other reasons).

As with other provincial Human Rights Codes, the B.C. code prevails in the event of a conflict with any other legislation – including the B.C. Strata Property Act.

In October, the condominium (strata) corporation applied to the tribunal to have the complaint dismissed without a hearing. They based the application on the fact that the smokers were not violating any condominium bylaws. The president of the corporation said that it does not have a no-smoking bylaw and it therefore had no authority or ability to respond to the complaint.

Essentially, its position was that since there was no prohibition of smoking in an owner’s private suite or balcony in the building, there was no basis for the Kabatoff complaint.

Tribunal member Marlene Tyshynski presided at the hearing, and dismissed the condominium corporation’s application to toss out the complaint. She also provided a clear road map for the Kabatoffs to pursue and even succeed with their claim.

“If the Kabatoffs are able to establish that they have disabilities that are exacerbated by second-hand smoke,” Tyshynski wrote, “their complaint that Strata Corp. failed to accommodate their disabilities could amount to discrimination under the code. The Strata Corp.’s application would be denied.”

If the Kabatoffs are able to produce medical evidence of physical disability at the hearing of their complaint, it seems that this condominium – and similar condominium or rental buildings across the country – would be forced to become completely non-smoking if any occupant complains of a disability resulting from tobacco smoke.

As a human rights issue, the no-smoking requirement would supersede any building bylaw or condominium legislation in force at the time.

The idea that external legislation could affect the governing of condominium corporations will probably not go over well with the management and boards of thousands of condo and rental buildings across the country.

On the other hand, those of us who are very sensitive to tobacco smoke will chalk this case up as a significant victory for public health advocates. (Full disclosure: I am an elected member and past chair of the executive committee of the Non-Smokers’ Rights Association.)

In a telephone conversation last week, Paul Kabatoff said that negotiations are underway with the new condominium board, and that his Tribunal application may not have to proceed to a full hearing.

I wouldn’t be surprised if the entire building became smoke-free within the next little while.

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Olympic visitors drop millions on local luxury suites

March 4, 2010 Leave a comment

Coal Harbour penthouse sold for $22.3 million

Wednesday, March 03, 2010

Some 2010 Olympic spectators went home with more than red mittens as souvenirs following the closing ceremony of the Games last weekend.

According to George Wong, who heads up Vancouver-based Magnum Projects, three luxury suites sold in two high-end towers between Feb. 12 and 28 were purchased by visitors in the city specifically for the Olympics. The most expensive of the suites was a $22.3 million penthouse sold in Three Harbour Green, an Aspac Development tower under construction in Coal Harbour, next to what was the Olympic International Broadcast Centre. In total, Aspac sold $31.8 million worth of real estate between Three Harbour Green and The Westbrook, located at UBC, to Olympic visitors.

“I believed the Olympics would bring a lot of well-heeled international people and it turned out that way,” said Wong. “And it turned out the timing was right. A lot of people said there was no [real estate] business to be done during the Olympics, but that wasn’t the case.”

Wong said when someone on vacation falls in love with an area, they typically look to buy. But unlike someone who falls in love with a village in Mexico and decides to buy a condo for $20,000, these buyers are willing to spend big bucks to purchase a home in Vancouver. He explained the people buying these multi-million dollar properties are well travelled and know real estate in Vancouver is still a bargain compared to cities such as New York, London or Tokyo.

“These are truly international buyers who have seen the best parts of the world,” said Wong. “Considering Vancouver was named the most liveable city in the world by the United Nations and the second most beautiful city by Forbes Travel, and is, I hope, terrorist free, it’s a bargain comparatively to many other cities. We are a world class city.”

Wong added the beautiful weather Vancouver experienced for much of the Olympic Games didn’t hurt either. “And the atmosphere was so exciting,” said Wong. “People just fell in love with Vancouver.”

Bob Rennie, the name and face behind Rennie Marketing Systems, said his company had a lot of interest in properties from Olympic visitors, but only a few sales were finalized. He noted the Jameson House development on West Pender received a lot of attention because of its downtown location, as did the Olympic Athletes Village, most of which is being sold as market housing with occupancy scheduled for later this year.

“But the Athletes Village is in an [Olympic] security zone, so it was very hard to stand on the street and point out its amenities, without actually showing any units,” said Rennie. “We have a lot of people planning return trips to see the units once the security comes down.”

Salina Kai, a realtor with Rennie and Associates Realty, agreed. “People were hesitant to try and get into those high traffic areas to look at properties,” she said. “Because of that we saw a lot of interest, but few purchases.”

Kai also saw a lot of interest and real estate sales in the past several weeks that weren’t Olympics related. “The ones who did make purchases were from mainland China, but I think that had more to do with Chinese New Year.”

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