B.C. Housing considers $53m loan for Little Mountain developer

Construction financing would be for new rental highrise in Downtown Eastside

Holborn Properties plans to build a 132-unit rental building at the northeast corner of Abbott Street and West Hastings. Rendering courtesy of City of Vancouver planning document

B.C. Housing is considering providing a $53-million loan to the same developer mired in the Little Mountain housing project controversy so it can construct a 10-storey rental building in the Downtown Eastside.

The provincial government’s housing agency confirmed Monday that Holborn Properties is in negotiations to receive the loan to develop its planned 132-unit housing complex on the northeast corner of Abbott and West Hastings streets.

The negotiations come two weeks after the public release of the purchase and sale agreement signed in 2008 between Holborn and the former Liberal-led B.C. government for the Little Mountain property.

Retired NDP MLA David Chudnovsky, who obtained the contract after Holborn ceased its court fight to protect the 99-page document, described the agreement as a “sweetheart deal” and called for a public inquiry.

The contract revealed Holborn received a $211 million interest-free loan towards the $334 million sale price of the 15-acre site near Queen Elizabeth Park. As of this month, the company had only paid $35 million of the purchase price.

'Middle-income earners'

If approved, the loan for Holborn’s Abbott Street project would come via B.C. Housing’s HousingHub Provincial Rental Supply program, which was created in 2018 to provide low-cost loans to developers, non-profits and others to encourage the construction of rental housing and privately-owned homes.

“In return [for the loan], developers commit to pass these construction cost savings through to the tenants and prospective homeowners in the form of more affordable rents and homeownership opportunities,” said B.C. Housing in an email Monday from its communications department.

A repayment deadline will be negotiated with Holborn if and when the loan is approved. Cost of rents will also be established, but B.C. Housing said the aim is to have rents set below market rate and geared to “middle-income earners.”

The city granted Holborn a building permit in January 2020 for the site, which is currently occupied by a parking lot. The company said in an email Monday that it hoped to begin construction next fall, with a tentative completion date in the spring of 2025.

Holborn, however, wasn’t clear whether the project would go ahead with, or without a government loan. But spokesperson Megan Schrader said the company understands the critical need for affordable market housing for middle-income earners and the role the government’s loan program has in creating such housing stock.

“At this time, an agreement has not been made between Holborn and B.C. Housing regarding a potential HousingHub partnership,” Schrader said. “However…Holborn will continue to collaborate with B.C. Housing to solidify our partnership while we work towards delivering much-needed rental housing at 388 Abbott.”

B.C. Housing said providing Holborn with a loan for its Abbott Street project would not be unique, with similar construction financing given to other developers, faith groups and builders in B.C., including in Squamish, Kelowna and Coquitlam.

What is unique is that the Abbott Street project was included in a memorandum of understanding that the B.C. government, Holborn and the City of Vancouver reached to accelerate the construction of social housing on the Little Mountain property.

The thrust of the memorandum, which was announced Sept. 10, is to have Holborn build and open all 282 units of social housing at Little Mountain by Dec. 31, 2024.

So far, only 53 have been built.

Schrader said the Abbott Street project was included in the memorandum “as an additional example of the combined efforts of Holborn and B.C. Housing to provide rental housing opportunities for diverse income demographics in Vancouver.” 

'Empty lot full of weeds'

Attorney General David Eby, who is also responsible for housing in B.C., spoke to reporters Sept. 10 and briefly mentioned B.C. Housing potentially financing Holborn’s project on Abbott Street.

A $53-million loan for Holborn was not discussed at the news conference or included in the memorandum.

Eby’s comments were largely directed at the 2008 deal with Holborn, which he described as “the B.C. Liberal disaster that is Little Mountain.”

“The B.C. Liberal government, with the help of people like [former ministers] Kevin Falcon and Rich Coleman, evicted 224 families from low cost housing, demolished their homes and handed the land over to a private developer with no deadlines for reconstruction — while at the same time, offering them hundreds of millions of dollars in interest free loans for 18 years,” said the NDP MLA for Vancouver-Point Grey.

“Thanks to the B.C. Liberal government's negligence and self-interest, Little Mountain, which used to be an active, thriving low-income community in an increasingly unaffordable city, became an empty lot full of weeds for more than a decade.”

Glacier Media relayed a message to Coleman last week via a third party, but had not received a response before this story was posted. Shirley Bond, the Liberals’ interim leader, said in an earlier email that proceeds of the sale at Little Mountain were used to develop more than 2,100 supportive housing units across B.C.

“We need to understand why this lack of progress, which is far too common, occurred and how we ensure that all levels of government can improve to prevent significant delays from happening,” Bond said.

Eby said that he was hopeful the “good faith” agreement reached with Holborn will speed up construction of the social housing units on the site, which have increased from the original 234 to 282.

“The fact that Holborn didn’t have to enter into this [agreement] — and the fact that if they don’t meet these commitments it will simply result in more bad press — indicates to me that there is reason for optimism that we can get this done,” he told reporters.

mhowell@glaciermedia.ca

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