BUSINESS

A BUBBLING URBAN BATTLE

B.C. RESIDENTS WILL GET A CHANCE TO PURCHASE HOUSING AT LI KA-SHING’S EXPO PROJECT

HAL QUINN January 16 1989
BUSINESS

A BUBBLING URBAN BATTLE

B.C. RESIDENTS WILL GET A CHANCE TO PURCHASE HOUSING AT LI KA-SHING’S EXPO PROJECT

HAL QUINN January 16 1989

A BUBBLING URBAN BATTLE

BUSINESS

B.C. RESIDENTS WILL GET A CHANCE TO PURCHASE HOUSING AT LI KA-SHING’S EXPO PROJECT

Victor Li had made plans for a New Year’s weekend of skiing at British Columbia’s popular Whistler resort, followed by a brief trip to Hong Kong. Li, the 26-year-old son of Hong Kong billionaire Li Ka-shing, had successfully weathered a storm of protest in Vancouver over the early-December sale—exclusively to buyers in Hong Kong—of a 216-unit condominium complex by a company in which he is a limited partner. And in his role as vice-president of Concord Pacific Developments Ltd., Li had control of the 204.5-acre former site of Expo 86—in the heart of Vancouver—purchased by his father last May. Then, another blistering controversy erupted over the largest real estate deal in Vancouver’s history.

As Li skied at Whistler, Premier William Vander Zalm announced that he wanted to reopen the eight-month-old, $320-million Expo lands sale in order to gain assurances that the land will not be resold for a quick profit and that planned housing units will not again be sold only to offshore buyers. Said Li at a hastily called news conference last week: “It was not the nicest New Year’s present I received.” Still, he issued an assurance that Concord plans to market the Expo housing to British Columbians first. However, Vander Zalm’s comments led many business and political leaders to express deep concerns that foreign firms might now be reluctant to invest in the province.

The controversy also renewed the debate over the sale itself. For one thing, the lands take up at least onesixth of the city’s downtown core. For another, the cost of removing or controlling the toxic waste that lies beneath much of the site is enormous.

As well, there are growing symptoms of racism in Vancouver, along with general concerns about the high influx of foreigners. Said former Vancouver mayor and now provincial New Demo-

cratic Party Leader Michael Harcourt: “We have flogged one of the world’s prime development sites and we still have all the problems of cleaning it up and the costs of servicing it. On top of that, the premier has been a severe embarrassment to the province.”

Unlike Vander Zalm, Victor Li was complimented by almost everyone involved in the week’s events. While emphasizing that the company which sold the condominium complex did nothing unethical or illegal in marketing the condos—which sold out within hours—in Hong Kong, Li acknowledged, “I was not sensi-

tive enough to local feelings and I misjudged the market response and the immense demand for the project.” After meeting with Vander Zalm at the premier’s shopping mall, known as Fantasy Garden, Li said that the premier told him that he had never intended to reopen the contract and that “a deal is a deal.”

To that end, Li outlined Concord Pacific’s marketing policy for the 8,000 to 10,000 residential units planned for the $2-billion development, which will also include a hotel, offices and retail outlets on the north shore of False Creek at the south end of the downtown core. When the company files for a development permit from city council, Li said, Vancouver newspaper ads will describe the location, number and size of the residential units and they will name at least two financial institutions where prospective buyers can arrange to prequalify for mortgages. A week before the units are put on sale, local ads will again provide the sale and list prices. Then, the units will be available for purchase in Vancouver 24 hours before they go on sale offshore.

A clause in the land-sale contract, which Li says Con-

cord is willing to make public but which the government is keeping confidential, prohibits the company from selling off any parcels of the site before 1991. Li said last week that over the past 30 years his family has developed 80 per cent of its real estate projects itself. A company spokesman said, however, that Concord would consider future proposals from other developers.

But Li added that if por_

lions are eventually sold to other developers, the company would do everything legally possible to have those developers adhere to Concord’s local-marketing policy. Said Li: “We are only restating our old policy. We have expanded on it somewhat and we have made it public. Nothing has changed.” Asked if he thought that he was the object of discrimination, Li declared: “If I was your average developer, thinking just of dollars and cents, then my answer would be yes. But I am not your average developer. I made my biggest investment about six years ago when I became a Canadian and a British Columbian. I

came 10,000 miles to make friends—not enemies, not controversies.”

British Columbia business and political leaders expressed hope that the whole controversy was now at an end. Michael Goldberg, who is on leave from the University of British Columbia faculty to help the government attract foreign banks to the city, said: “Things like the premier talking about opening a contract can’t go _ on. That has to stop. In order

Asian money f° do business you have to have sanctity of a contract. It is a root organizing principle in our society.” Added Brian Calder, vice-president of the Real Estate Board of Greater Vancouver and, like Harcourt, an outspoken critic of the deal from the beginning: “If our contracts are perceived to be no good, or subject to review at the whim of someone in Victoria, the investment capital is just not going to come.”

There is now growing concern over the huge cost of 0 cleaning up the site, an obli| gation that the government £ assumed as part of the sale o agreement. The land, which 6 the B.C. government pur-

chased from Canadian Pacific for about $60 million in 1980, was an industrial site for more than a century. Soil samples indicate high levels of volatile organic compounds, cyanide, lead, arsenic, copper, zinc and hydrocarbons associated with coal tar. Cleanup cost estimates by government-hired consultants range from $15 million to $50 million, depending on the method employed. The cheaper approach would be to cap the most contaminated areas with a type of high-density plastic liner, which would then be covered by clean soil. The most expensive method would involve the removal of more than 10 million cubic feet of soil.

Li Ka-shing bought the land last May with a $50-million down payment. The complete payment schedule calls for $10 million a year from 1995 to 1999, $20 million in the year 2000, $40 million in 2001, $60 million in 2002 and $100 million in 2003. Declared Harcourt: “The cleanup of the environmental disaster may cost up to $50 million, which will wipe out the $50 million cash we’ve got so far.”

The enormity of the transaction and the latest controversy have raised social and racial concerns that are relatively new to Vancouver. Said Goldberg: “We have really moved from being a big small place to a small big place. And that change has taken place very quickly—in fact, in the last couple of years. People have had a very inward-looking attitude, and that has to change. Latent racism that we see cropping up from time to time is, as much as anything, a symptom of that. We have to be a much more international province than we’ve been.”

Meanwhile, Vancouver Mayor Gordon Campbell acknowledged that undercurrents of racism exist in the city. He added: “The toughest thing I’m going to go through as mayor is to provide people with a sense of confidence and control over what’s happening in their city. So you have to remind them that, in fact, we can improve the city by seeing some development on the north shore of False Creek and that we are going to get community benefits.”

And Vancouver has already benefited from other Hong Kong investments. Provincial government records show that 187 foreign businessmen with $330.6 million to invest moved to British Columbia between January, 1987, and October, 1988. And about 80 per cent of those came from Asian countries, primarily Hong Kong. But most of their money has flowed into real estate, and that has angered many Vancouver residents, who charge that the Asian investors are inflating real estate prices. Vancouver alderman Jonathan Baker says that he now receives up to six calls a day from people complaining about the growing Chinese presence in the city. However, he added, “There are worse things than having an influx of highly motivated, highly educated and wealthy immigrants arriving in your city.” But with more Asian money flowing into Vancouver every day, the controversy surrounding the high-profile Expo 86 site will no doubt continue.

HAL QUINN in Vancouver