Vancouver developer cancels plan for office tower key to redevelopment

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Vancouver developer Bonnis Properties is cancelling plans for a 17-storey office tower that was to be at the centre of the city’s hopes for re-energizing the Granville Entertainment District.

The tower project was the anchor of the 800 Granville redevelopment project, which planned to preserve cherished cultural institutions such as the Commodore Ballroom and the Commodore Lanes and Billiards hall, as well as expand office space with a modern, glass building on top for use by large technology companies.

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“There is just really no demand for large-use office space now,” says Kerry Bonnis, whose family owns and runs Bonnis Properties. “We are examining ways to re-purpose it by looking at different uses.”

The original plans, which have been in the works for around seven years, included building over 460,000 square feet of office space and increasing the retail and restaurant footprint to over 97,000 square feet.

Before the COVID pandemic, there was strong demand for downtown Vancouver office space, said Bonnis, adding there were indications of interest, in particular, from technology companies looking for larger spaces. However, many of those companies have now downsized.

Bonnis says it isn’t feasible to move ahead without space being pre-leased to office tenants. He blamed the overall challenging market and the cost of carrying steep financing rates.

He also said that city planners and staff took too long with the redevelopment proposal, dating back to when he first started discussing the project with them in 2017.

After extensive community consultation, Bonnis Properties submitted a formal redevelopment application to the city in August 2021, including upgrades to the Orpheum Theatre’s Granville Street entrance as well as access to the Commodore Ballroom and Commodore Lanes and Billiards. There were concerns about the height and “massing” of the building.

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In January 2023, after some changes to city bylaws and a renewed interest in revitalizing the area, the company submitted another rezoning application with fresh renderings and a new round of consultation.

“I will throw the city under the bus on this,” he said. “If it had been faster, maybe we could have secured leases with tenants and been nearer to completion. This issue is not unique to this property, but it’s taking too long on projects of such magnitude.”

He said while previous city planners dragged out the process, this has been changing and City Hall has more recently been supportive of the area being both a daytime hub and nightlife district. Mayor Ken Sim and his ABC-majority council have been promoting nightlife, culture and fun in the city as a priority.

Bonnis says the company is now working with agents and its architect to assess alternatives. He is optimistic about the future of retail and restaurants in the area.

“With the Nordstrom space needing to be filled, there are some exciting possibilities. There are a lot of rumours,” he says, referring to talk that Cadillac Fairview will be bringing in several new, major tenants to fill the 230,000 square feet of retail space vacated across the street from 800 Granville at CF Pacific Centre when Nordstrom left the Canadian market in mid-2023.

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As for what could support the creation of more retail space, he said there is demand for hotel rooms and since there are other hotel projects in the area, it would make sense to develop a cluster of these.

“It’s a prime location close to entertainment, the arts, retail, and the central business district on a transit hub,” said Bonnis.

While he thinks it would make sense to consider building a hotel, he said it would take interest from an owner or partner with experience or a network in the hotel business to secure the financing required.

“We are not hotel developers, so if someone was to become available in that regard, we would be open to that or to partnering on a project,” he says.

jlee-young@postmedia.com

With files from Dan Fumano

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