MLA questions $39 million mortgage from BC Housing to condo developer
NDP MLA questions why BC Housing loaned a luxury condo developer $39 million on a building that has no social housing.
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Why did BC Housing loan $39 million to the developer of a market condominium project that contained no social housing?
An Opposition MLA has raised questions about the mortgage in the legislature, the minister responsible for housing has called the deal “innovative” and the City of Vancouver has referred media to an opaque report on the original, very complicated land swap deal that was struck back in 2012.
“The question is, why on earth would BC Housing lend $39 million to a luxury condo developer,” said David Eby, MLA for Vancouver-Point Grey.
“I can’t understand why the project was structured the way it was and lots of people can’t. It’s an incredibly bizarre transaction.”
The two pieces of land in question are 508 Helmcken St., where a low-rise social housing building called Jubilee House once stood, right beside Emery Barnes Park in Yaletown. The city owned the site.
Brenhill Properties, a Vancouver development company, owned land across the street at 1099 Richards St. In 2011, Brenhill approached the city with a proposal to do a land swap. Brenhill would build new social housing at 1099 Richards, the Jubilee House tenants would move in, and Brenhill got 508 Helmcken with increased density.
The company intends to build high-end, luxury condos; pre-sale prices range from $509,500 to more than $3 million, according to realtor websites. The development is named 8X on the Park.
Eby’s accounting of the project totals up the $30 million the city says it put towards the project; a $15 million construction loan the society that operates the New Jubilee House got from BC Housing; and the $39 million loan from BC Housing to Brenhill. Land title documents show a $39-million mortgage from BC Housing to Brenhill was registered on Aug. 12, 2016, a month after New Jubilee House had opened its doors. The document includes a request that BC Housing be apprised of the progress of condo presales.
“When you add those numbers up it comes to a price of $288,000 per unit, which seems a little bit high considering the city already owned the property but, in any event, reasonable,” Eby said.
“But if you add a $39 million loan, the price per unit — and these are bachelor and one-bedroom apartments — goes up to almost $500,000 per unit.”
A city spokesman confirmed to Metro that the city’s $30 million contribution went toward construction of the social housing building.
B.C.’s Ministry of Natural Gas Development, which holds the housing file, sent Metro a statement saying BC Housing loaned Brenhill $39 million in interim financing for the construction of the social housing project and says that loan has now been paid. The statement says BC Housing has never had any involvment in the market condo project.
A source familiar with development in Vancouver said Brenhill would have likely needed financing to both build the social housing, and for the period before enough presales had been sold to secure construction financing for the market condo project.
Communications staff at the ministry wrote that BC Housing will be ready to share the documents at the end of next week, following a check for privacy concerns.
Brenhill did not respond to a request for comment.