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Development Stopped Due to Insufficient Disclosure by the City

 

Community Assn. of New Yaletown v. Vancouver (City), 2015 BCSC 117

On January 27, 2015, the British Columbia Supreme Court issued its decision in Community Association of New Yaletown v. Vancouver (City), 2015 BCSC 117, more commonly being cited as the “Brenhill Decision” as the issue in dispute was whether the City of Vancouver (the “City“) had acted fairly with respect to public hearings concerning a proposed development by Brenhill Developments (“Brenhill”).

This action was commenced by the Community Association of New Yaletown (“CANY”), a group of residents and business-owners who sought judicial review of a number of decisions by the City and the Development Permit Board in connection with the rezonings and developments of certain properties in the New Yaletown neighbourhood. Brenhill owned 1099 Richards Street (“1099”), a building containing its offices, a preschool and a restaurant. Across the street, at 508 Helmcken Street (“508”), was Jubilee House, an 87-unit social housing project operated by the 127 Society of Housing (“127”) that was in a state of disrepair.  Brenhill sought to build a tower on the 508 lands and submitted a land exchange proposal to the City whereby it would build a 13-storey, 162 unit building to replace Jubilee House at 1099 and transfer ownership of 1099 to the City, which could then lease it to 127, in exchange for 508 and the closure of an adjacent lane.  Brenhill would then proceed with its own development at 508, which would include a significant component of market rental units.  The City was interested in Brenhill’s proposal and negotiated a land exchange agreement with the developer.  Brenhill further agreed to give the City $1 million towards tenant relocation costs and not to begin construction at 508 until after the Jubilee House residents took occupancy of the new housing at 1099.  Brenhill applied for rezoning of 508, as its proposed development was significantly larger and taller than what existing zoning permitted.  The City sent notice of the rezoning application and of an open house to approximately 9,700 property owners and renters in the surrounding area and the open house was attended by approximately 135 people.  The City subsequently issued a notice of public hearing and prepared and posted a nearly 100-page package, including a summary and recommendation section, a draft of the proposed amending by-law and a policy document prepared by City staff, online.  The City approved the rezoning bylaw and granted Brenhill a development permit in respect of 1099 as that property did not require rezoning.

CANY sought to set aside the resolution authorizing the development permit, alleging that the City had breached the Vancouver Charter and the rules of procedural fairness by failing to disclose relevant documents at the public hearing concerning the development permit for 1099, by accepting submissions from the public after the close of the public hearing and by failing to provide proper notice of the public hearing relating to the amendment of the Downtown Official Development Plan (the “DODP”).  CANY also sought a declaration from the Court that the agreement entered into between Brenhill and the City unlawfully fettered City Council’s discretion, and that the bylaw zoning was inconsistent with the DODP.

Specifically, CANY argued that the disclosure surrounding the public hearing for 508 was insufficient because the City had failed to disclose certain key documents containing material information in advance, including the agreement between Brenhill and the City with respect to 1099.  CANY submitted that the land exchange meant that 508 would no longer be used for “social purposes” and therefore it should not have been exempt from public tender.

The City contended that entering into the agreement with Brenhill was within its authority and that the agreement between Brenhill and the City was not relevant to the use and density at 508, which it submitted is the proper scope of a rezoning proposal, therefor it served no useful purpose to tender it at a public hearing. It further argued that the land exchange itself was for “social purposes”, and that City Council had not been fettered by the agreement because there was no guarantee to Brenhill that the rezoning application for 508 would succeed.

Brenhill submitted that even if the quashing of the zoning bylaw was warranted, it should not be granted because of CANY’s delay in bringing its petition and the prejudice to Brenhill as a result of the delay. (Brenhill alleged that it had incurred an estimated $7 million in expenses since construction of the new building at 1099 began in September 2013.)

In coming to its decision, the essential question before the Court was whether the City had provided enough information for the public, in a form that was understandable, to fairly evaluate the pros and cons of both of the proposed developments.  The Court found that the package of materials made available to the public was highly technical and organized in a way that a large volume of information that was peripheral was interlaced with vital information and that there was nothing that addressed the public in simple, direct terms.  While the City took the approach that 508 and 1099 were distinct issues, the Court disagreed as treating them as separate issues did not reflect the true substance of the project.

The Court allowed the petition, concluding that the public hearing and the development permit processes were flawed, as the City took an unduly and unfairly restrictive view of the public discussion that should have been permitted to address the true nature and overall costs and benefits of the project to the City and its residents.  The Court noted that it had been provided with a more extensive and intelligible description of the project and its perceived benefits than the public had received and that the public was entitled to a similar explanation.

The Court found that the appropriate remedy was to quash the rezoning bylaw pertinent to 508 and the development permit pertinent to 1099 and directed that new hearings be held that would permit citizens to address the whole project, including the essence and value of the land exchange to the City and its residents.

In light of the Court’s decision, the City issued a Stop Work Order on the construction at 1099 effective January 30, 2015.

To date, the City still owns 508 and Brenhill still owns 1099.

The City and Brenhill have appealed this decision. It is expected that they will seek an expedited appeal process.

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While the Brenhill decision is somewhat unique in that it involved a land exchange, there are lessons that can be taken from this decision. The point of contention in Brenhill was the lack of adequate disclosure by the City to the public in advance of the public hearings.  As such, a developer working on a project with a municipality would be well advised to make sure staff has carefully considered whether all necessary information is being provided to the public in relation to rezonings or the issuance of development permits and that such information is presented in a clear and straightforward manner.  Of course, developers are not in a position to take on the responsibilities of the municipality with respect to preparing these information packages, and nor should they be.  However, given the potentially significant consequences, it is ultimately in their best interests to take whatever steps they can to ensure that public hearings relating to rezonings or development permits have been carried out with proper disclosure and in accordance with required procedures, thereby decreasing the risk that the approvals will be subject to challenge.


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