While the average office worker groans about losing sleep as the clocks spring forward an hour, many landlords are losing sleep over the city’s short-staffed planning department, which is taking weeks to process permits for building improvements.
Many are expecting a snarl of tenant transitions this summer as leases end without new premises for some tenants being ready for occupancy, thanks to delayed approvals.
“As many people in the room know, or are going to find out fairly quickly, most of the buildings downtown were removed off the TIPS [Tenant Improvement Permit System] program,” said Paula Wright, a leasing director with Manulife Real Estate who vented her concern at a recent breakfast meeting of commercial real estate association NAIOP, which highlights the best and worst of local approval times in its annual business cost survey. “To do a new TI permit, you’re looking at 10 to 12 – I’ve even heard 16 – weeks out there, whereas before that was two to three weeks.”
The knock-on effects of sluggish approvals include delayed fixturing periods for new tenants and disruption to their operations, which in turn cost landlords tens of thousands of dollars in rent.
The city has 35 staff to handle applications at its one-stop counter at the Development and Building Services Centre, but there haven’t been enough staffers to address the increased workload that changes to TIPS have triggered.
TIPS provides a fast-track process for tenant improvements in more than 700 buildings deemed code-compliant. A few months ago, all the major downtown office towers made the list. Today, updates reflecting the current building code mean most downtown towers – which have an average age of 26 years – no longer qualify.
“Two years ago we could go into the city with our building permit application, go to the counter, submit on a building that was on the TIPS program, and you could get a building permit within a week,” said Blair Hiddleston, vice-president of business development with Fusion Project Management Ltd. in Vancouver. “[Now] we have to make an appointment, and if I was to phone up today, maybe some time in the next two weeks I could get an appointment. I would then go and submit the permit application … and it could take anywhere from six to 10 weeks to get a building permit, on top of the two-week delay.”
Similar delays have occurred for demolition permits, which now require documentation verifying that waste is free of asbestos. Projects that require an assessment for life safety issues or are otherwise ineligible for field review require more intensive scrutiny that could take up to three months.
“The process for permit approvals within the City of Vancouver has been stretched longer and longer over time, and our membership has communicated a growing frustration with this,” said Chris MacCauley, a NAIOP director and senior vice-president with CBRE Ltd. “These increasing delays are impacting the ability of landlords and tenants working together to facilitate and, in many cases, improve changing space requirements in a timely manner.”
While acknowledging the delays a lack of staff has caused, Andrea Law, assistant director of planning and development services, said change is coming.
So-called “customer service specialists” used to vet applications prior to last year’s changes shifting them to more pressing projects, Law said, but a new program will debut later this year that promises to replace them.
“We are exploring what we’re calling a commercial renovations centre,” Law said. “It will … provide that upfront expertise so it gives people who, maybe, aren’t as familiar with our process as we’d like an opportunity to walk … through what they’re looking at in terms of permitting, what they’re looking at in terms of timing, potential costs.”
Law said local business improvement associations are advising on the new centre, but the exact launch date hasn’t been set.
“We’re really trying to be strategic with how we roll it out,” she said. •