Promotional supplement
VA N COU VE R C H A P T E R 14th annual
Regional
METRO VANCOUVER
CHAPTER
Industrial
Development Cost Survey Fall 2013
2013 Highlights NAIOP will be acknowledging six municipalities that have excelled in creating environments positive to business creation. The three categories of awards are:
The Vancouver Chapter of the Commercial Real Estate Development Association (NAIOP) is pleased to present the 2013 edition of their Commercial Development “Report Card”
Most Improved The most improvement compared Pacific Link Industrial Park, to previous survey results at Scott Road and 103 Ave Most Fiscally Responsible in North Surrey Cost increases kept in line Vwith A overall NCO U V E R C H A P T E R inflation Most Business Friendly Implementation of policies to support the creation of new job spaces The awards will be presented at the October 17 breakfast meeting This year’s winners are: Most Improved: City of North Vancouver, City of Langley, and Municipality of Delta –they have managed an overall drop in costs of 20%, 18%, and 17%, respectively, from the previous survey results in 2011 Most Fiscally Responsible: Municipality of Delta – has managed to limit cost increases over the 10 year timeframe of the study to 30% GREATER VANCOUVER of the average rate of inflation Most Business Friendly: City of Abbotsford, New Westminster and District of North Vancouver – Abbotsford’s program for 5 year staggered tax incentive programs for commercial and industrial development continues and both the District of North Vancouver and the City of New Westminster have made significant progress since 2011 in shifting the tax burden from industrial users towards a fair ratio for all taxpayers in their jurisdictions. Some Positive Highlights to Note: • Seven cities have lowered their costs • Three cities held their cost increases to, or below, approximately the rate of inflation • Processing times are stable with increases in two municipalities offset by a decrease in two Some Not-So Positive Highlights to Note: • Four municipalities have increased their total cost to build the development proposal by at least 15% from 2011 to 2013 • Increases in development cost charges are again becoming a trend with one-third of the municipalities surveyed recording increases in DCC’s from 2011 figures. • Of the two municipalities with longer processing times, one is over 100% longer in 2013 than in 2011.
New Haven Business Park Phase One in Burnaby
W
ith the last quarter of 2013 well under way, the next edition of the Industrial Cost of Business CHAPTER Survey is ready for your review. While economic uncertainty remains a concern in 2013, there is optimism that another recession is out of the picture due to a stabilizing world economy. With the availability of investment grade product in short supply, Metro Vancouver’s Industrial market weathered the 2008 downturn in relatively good fashion, with a stable rental rate trend and very little submarket weakness apparent. Despite the dramatic financial turmoil over the past 5 years, the overall vacancy in the Vancouver office market generally continued on a downward trend. The current industrial vacancy rate of 3.8% is down slightly from a year ago. NAIOP Vancouver continues to have concern over the declining supply of readily developable Industrial land in the Metro Region and commissioned a study earlier this year to assist an industry-wide lobbying effort to bring the issue to the attention of local and regional planners as well as our Provincial leadership. Please see page 4 for more detail on NAIOP Vancouver’s efforts in this regard. The Survey, which is distributed to 20 communities within the Lower Mainland, requires each municipality to identify the costs and processing times associated with the parameters
of the case study outlined within this article. For 2013, the development project was, as per the previous Surveys, the construction of a 2 storey, 100,000 square foot industrial warehouse distribution building on 5.5 acres of land requiring both subdivision and rezoning. Just as the 2011 survey reported, we thought it would be interesting to show the costs we first reported back in 2001 at the Survey’s inception to give some historical interest of the increases (or decreases) compared to the CPI which has averaged 1.82% during the time period. We are sure you will find these particular results quite informative. In producing this annual publication, NAIOP strives to provide its membership and the business community as a whole with a reference tool that quantifies the costs and processing times associated with typical development projects within Metro
Vancouver municipal jurisdictions. Moreover, we believe the Survey can be utilized by the municipalities, whose active participation makes this survey possible, as a gauge for their own development costs and approval processes.
Index Survey Scenario . . . . . . . . . . . . . . . . 3 Industrial Lands Vacancy Report. . . . . 4 Markey Beat – Industrial Snapshot. . . 6 Market Highlights . . . . . . . . . . . . . . . 8 2013 NAIOP Icon Profile. . . . . . . . . . 9 Municipal Fees . . . . . . . . . . . . . . . . 10 Mill Rates. . . . . . . . . . . . . . . . . . . . 10 Municipal Fees and Approval Times. 11 Times . . . . . . . . . . . . . . . . . . . . . . . 12 Future Trends . . . . . . . . . . . . . . . . . 15 Move Towards Green. . . . . . . . . . . . 16 Comparative Tax Burden. . . . . . . . . 17 NAIOP Mentorship Program . . . . . . 19