Demand will be high for a controversial 207-hectare parcel of land south of Vancouver that is slated to become available for industrial use as a result of the Tsawwassen Treaty, real estate industry experts say.
Canada's first urban treaty, between Ottawa, the B.C. government and Tsawwassen First Nation (TFN), calls for the removal of the parcel from the agricultural land reserve (ALR), which consists of provincially owned properties throughout the Lower Mainland that are intended for future farm use.
Pending ratification of the treaty from all parties, the TFN would receive the agricultural reserve real estate as part of more than 700 hectares from the province, and also have an option to purchase an additional 250 acres out of the ALR.
The fallow farmland is expected to be converted for industrial use at the TFN's discretion.
The land is located beside the Aboriginal group's reserve on the shore of the Pacific Ocean near the Canada-U.S. border along Roberts Bank - the site of the Vancouver Port Authority's Deltaport container terminal that is slated to undergo a $272-million expansion.
"I would tell you that there's phenomenal demand, because we're losing industrial land at a fast and furious rate here," says Bob Laurie, who is working with the Greater Vancouver Gateway Council.
Local port authorities will need four times the amount of land they currently have, he adds.
The Gateway council, which is made up of port-related operations dependent upon industrial lands, seeks to increase the flow of goods between Asia, B.C. and the rest of Canada. Laurie, who has 30 years of experience in industrial development and goods handling, also sits on the executive of the Vancouver Board of Trade, which strongly advocates expansion of the Port of Vancouver, and serves as a real estate adviser with the Vancouver office of CB Richard Ellis.
"These tougher decisions (of removing land from the ALR) are going to have to be made in this region, or else we're simply going to become a retirement home for the world," says Laurie.
The Deltaport expansion will increase the terminal's capacity to 750,000 twenty-foot-equivalent units per year. Laurie contends Vancouver is one of the few West Coast cities that can accept containers from China and other Asian countries.
But the local port is about to be hit by an Asian "trade tsunami" and increases in Far East manufactured goods are going to outstrip the Vancouver port's handling capacity, he says. Without more land, terminal operators will not be able to expand their operations and increase the flow of goods.
"We can't accommodate freight if all we can do is unload it," says Laurie.
The treaty still needs to be ratified by the TFN, Ottawa and Victoria. Then the land must be rezoned as industrial before it becomes available.
The community of Tsawwassen, located near the TFN's reserve, is part of the Municipality of Delta. Tsawwassen residents have complained that more industrial use will increase truck traffic, noise and pollution.
Delta Mayor Lois Jackson has also opposed the treaty and environmental groups have protested the removal of the land from the ALR.
Laurie expects the land will be used for container storage and sorting, trans-shipment of goods and warehouses. The removal of the land from the ALR won't hamper food production, he contends.
"That's a big swath of land that is being used almost passively," says Laurie.
Laurie predicts the TFN will lease the land to the Vancouver Port Authority which, in turn, will lease it for up to 60 years to users who want to move goods across North America.
There's no shortage of concerns, says Kelly Heed, vice-chairman of the Vancouver office of Colliers International.
Colliers is advising the TFN on how to develop the land and hopes to assist with leasing in the future. Heed says both the TFN and municipality will have to compromise in order to achieve their respective aims.
"The Tsawwassen people have to get servicing to the site," says Heed. "Delta, of course, is probably not that keen on seeing the land developed, because they're very pro-ALR. They'd rather see (the land) farmed than put into industrial use. We would much rather see it put into industrial use than farmed, because I don't think it can be economically farmed."
Unlike most other First Nations, the TFN does not require federal approval to finalize agreements, says Colliers vice-president and managing director Howie Charters. But the TFN will have to negotiate with Delta for such services as police, firefighting, water and sewer.
Heed says the TFN and Delta might want to compromise on such issues as high-voltage overhead power lines and services for Delta-area farmers. Delta residents have strongly opposed a B.C. Transmission Corp. (BCTC) plan to install high-voltage overhead power lines along a right of way through Tsawwassen. The BCTC has gained B.C. Utilities Commission approval for the project, but Delta residents have launched a court battle.
"The band now is a pretty important component," says Heed. "They're a major landholder in that municipality and they might as well try and get along.”
But Heed says Delta can also ask what it can do for the TFN and to support the Deltaport expansion.
Gino Nonni, president of Wesgroup Income Properties LP, which develops industrial and residential land, says developers would prefer to own land instead of lease. But given the strong provincial economy and the location, there should still be strong interest in leasing the Tsawwassen site.
"It's all driven by the users, companies that want to either own or lease their own facilities, that have a strong requirement to grow," says Nonni, adding most users in today's strong economy want to expand their operations.
But the newly available Tsawwassen land can only succeed as an industrial property if it has adequate transportation infrastructure. Plans call for the proposed $800-million South Fraser Perimeter Road to connect Deltaport to Surrey and the Trans-Canada Highway.
"You need to be able to get in and out in a very efficient way during high-traffic patterns and future growth," says Nonni. "Growing is going to mean, unfortunately, more cars and trucks on the road."
Users won't be willing to foot the bill for any access roads, he says. Typically, a developer negotiates road construction with the local municipality.
Although the Tsawassen land may contain some unique restrictions, it won't have any trouble getting leased, agrees Darren Donnelly, head of Vancouver law firm Clark Wilson's commercial real estate group.
"Even if it has some strings attached to it, anytime land becomes available these days, there's going to be big demand for it - it's as simple as that," says Donnelly.
(Monte Stewart can be reached at monte@businessedge.ca)
