On Monday night, city council denied a request by Vancouver-based developer The Hub Collection Ltd. to change the scope of a proposed development at 4500 Ospika Blvd.
The City of Prince George sold the land to the developer in July 2020, on the condition the developer would build a 256-unit student housing complex on the 5.6-hectare lot within 24 months. On Monday, city council denied a request by the developer to modify the Section 219 restrictive covenant on the property to allow development of a 118-unit seniors housing complex instead.
“We sold the land for a specific purpose. That’s what I expect to be built there,” Coun. Kyle Sampson said.
Coun. Garth Frizzell said the city is open for business and willing to work with developers, but he supports sticking to the original agreement.
There is “a desperate need for student housing,” in Prince George, Coun. Cori Ramsay said. The city’s housing assessment identified the need for 5,000 new rental units in Prince George by 2030, she added.
Coun. Tim Bennett said he understands there is a need for seniors housing in Prince George as well, but the proposed location, at the corner of Ospika and Tyner Boulevards, doesn’t appear to fit the needs for seniors.
“This was a specific deal for a specific location to meet a specific need,” Coun. Ron Polillio said. “For that location, it makes sense.”
CITY STAFF CHANGED ORIGINAL COVENANT IN 2021
A copy of the purchase agreement, dated July 29, 2020, says, "The Covenantor will commence construction of the proposed student housing project upon the Property and will have completed framing on or before 24 months following the completion of the purchase of the lands."
The purchase agreement was obtained through a Freedom of Information request by an area resident, who provided a copy to the Citizen.
City director of planning and development Deanna Wasnik, said that city administration already modified the original covenant in October 2021, functionally eliminating the requirement for construction to be completed within two years. The amended covenant requires the developer to have begun pouring the foundation within 24 months of the conclusion of the purchase agreement, which they had done prior to stopping construction.
While city staff are not required to bring changes to the covenant to city council for approval, Wasnik said the change from a 256-unit student housing facility to a 118-unit seniors housing facility was significant enough to warrant bringing the change to city council for approval.
Monday night was the first time the details of the covenant were brought to council by staff, Coun. Brian Skakun said.
“The first time I saw that was in a Prince George Citizen article,” Skakun said. “The point is we could have had information about what the actual conditions of the covenant are (before now).”
‘FAIR MARKET VALUE’
On July 29, 2020, The Hub Collection bought the lot from the City of Prince George for $500,000, according to the purchase agreement.
BC Assessment valued the land at $682,000 in its 2020 assessment. That value grew to $758,000 in the 2021 assessment and $3.127 million in the 2022 assessment.
The sale price of $500,000 was “fair market value” for the land, Wasnik said. The amendment to the official community plan and rezoning to allow development of the site, following the sale, likely contributed to BC Assessment’s increased assessment of the land value.
Under the original covenant, if The Hub Collection is "in breach or default of any of the material covenants or agreements," in the deal, the City of Prince George has the "exclusive and irrevocable option" to purchase the land, including all improvements, back for $485,000.
"Given the public interest in the development and use of the Property in accordance with this Agreement, the public interest weighs strongly against any modification, cancellation or discharge of this Agreement..." the document says.
The amendment to the covenant approved by city staff in October 2021 means the city is no longer in a position to exercise its right to purchase back the land, after The Hub Collection failed to meet the two-year requirement to begin framing.
The initial public consultation regarding the proposed student housing complex at the site drew some concerns and opposition from area residents, primarily regarding increased traffic.
During the City of Prince George’s public consultation period on the housing project from March 12 to April 9, 2021, the city received 26 letters and a 21-name petition against the proposal and nine letters in support. The applicant also submitted a petition with over 40 signatures in favour of the project, however, only 31 of the signatories were from Prince George.
A spokesperson for The Hub Collection could not be reached for comment on Monday night.