Friday, October 16, 2020

Tower Cranes Mean Real Estate and Construction on the Move

Even under the drag of a worldwide pandemic, two more tower cranes have popped up on the Vancouver skyline. A couple of others came down this year so we are back to four cranes Downtown. Tower cranes have become rather symbolic of success. The types of projects that are erected underneath these behemoth towers are typically large scale, tall, and urban projects that cost tens of millions to construct.

These projects like other large scale developments produce hundreds of jobs and transform property values leading to more property tax revenue for the local government with out raising taxes on the whole. 

The City of Vancouver purchased the four city blocks formally occupied by the Lucky Lager Brewery Complex. The buildings were demolished and the blocks sat bare. No tax revenue was coming in because the city owned them. Now the first block became Heritage Place East and another adjacent block that had a few older single family homes became Heritage Place West. Lets say the value of that two block property went from roughly a million dollars in 1996 to around $25 million in 2000 when the project completed. The state and local government are now collecting property taxes on a fully developed area that is 25 times more valuable. Next was the Vancouver Center on the two blocks flanking the east side of the park. A much larger scale multi tower project went in there created and even larger tax boost. Now the final block the so called Block Ten has been sold for roughly $3 million to Holland Partner Group to be built out as a two tower mid-rise office and housing complex. The city will go from net zero to property taxes based on values that will almost certain exceed $50 million when complete.

Some people get upset when local government issue deferments on property taxes over a 8-10 year period, but the local government is playing the long game. Yes they will get less taxes early on, but still MORE taxes than they were getting prior to the development, then a HUGE boost when the incentives expire. That $3 million empty lot is about to become a $50+ million urban complex.  

All of this construction creates jobs, high paying skilled labor jobs! Most of that money stays in the local economy helping us all live better and more enriching lives. When you go Downtown, don't fret over the cranes, rejoice in the cranes, mega-investors are pouring money into our home, our
city, our economy. With the bludgeoning blows of COVID 19, we need all the investment we can get.

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