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City of Vancouver putting Block 10 back on market

By Amy Fischer, Columbian City Government Reporter

Published: February 22, 2016, 8:43 PM


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Interested in buying a vacant block at the heart of downtown Vancouver for a great project?

Not a single developer formally responded two years ago when the city issued a “request for interest” to see what potential developers envisioned for Block 10, which is catty-corner to Esther Short Park.

But the market has heated up since 2014, and now the city is planning to advertise Block 10 again.

Bordered by Columbia, Washington, Eighth and Ninth streets, it’s the last remaining block to be sold of the five-block Lucky Lager brewery site that the city bought in 1993. The other four blocks were developed into Heritage Place and Vancouvercenter residential buildings and the Vancouvercenter public parking garage.

Later this year, the city is preparing to release a “request for proposals,” which seeks more detailed and comparable proposals than the request for interest. But first, Block 10 had to be declared surplus, which the city council did Monday night.

The city is requesting proposals to attract the largest number of interested parties and increase the ability for the property to be put to its highest and best use. That has been determined to be a multi-story development, most likely with a few floors of housing above retail space, according to city documents.

Monday, the city council asked staff if Block 10 might be developed into a grocery store, which downtown residents have been clamoring for. Tim Haldeman, director of general services, replied that the city will put a grocery store on its “wish list” in the request for proposals. When it’s time to negotiate a sale, a grocery store possibly could be put in a development agreement for Block 10, he said.

Developers want to see a certain number of households in an area before they’ll build a grocery store, Haldeman said.

“We’re getting really close to supporting a grocery store. We’re kind of at that tipping point,” he told the council.

Block 10 had been used mainly for truck and employee parking from 1975 to 1985, when the Lucky Lager brewery closed for good. The city bought the former brewery for $2.3 million in 1993.

In the mid 1990s, Block 10 was to become home to an office building with Kaiser Permanente as the anchor tenant, but Kaiser reevaluated its needs and pulled out of the project.

The block was transformed in 2013, when Vancouver’s Downtown Association took down the cyclone fence surrounding it and spent $15,000 on plants, raised flower beds and materials. Bicycle racks and 10 flagpoles flying a rainbow of banners were installed.

The 1-acre lot, which has been appraised at $3.125 million, has been off the tax rolls since 1994. The site was used for homes, a blacksmith shop and painting facility dating back to the 1800s. In the 1900s, it housed a bicycle shop, grocery store, hardware store, machine shop, gas station and auto repair shop.

The city will use grant funding to conduct an environmental analysis to determine the level of contamination on the property, if any, from past uses.

It’s anyone’s guess as to whether the city could get the full appraised value of the property, which works out to about $72 per square foot. Eric Fuller, president of Vancouver commercial real estate firm Eric Fuller and Associates, said Monday that there haven’t been any significant land sales recorded downtown recently, but there’s a “feeling of demand” for downtown commercial real estate.

Much of that is due to the attention the downtown Waterfront Vancouver project is getting, Fuller said, referring to the $1.3 billion mixed-use project under construction, where property is advertised starting a $100 per square foot.

He noted that the asking price for another full downtown block is $53 per square foot, which could mean the city may need to be patient when waiting for a buyer for Block 10, he said.

Fuller said he believes the block is destined to have a building with street-front retail on the ground floor, such as a restaurant, small grocery store or coffee shop, and a large tenant in an upstairs office with residential units occupying the other floors.

Teresa Brum, Vancouver’s economic development division manager, said the city doesn’t see Block 10 as competing with The Waterfront Vancouver, into which the city has invested $44 million in railroad bridges, roads, utilities and other infrastructure.

“We don’t see this as competition,” she said Monday. “Waterfront is a completely different opportunity than downtown.”


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