THE B.C./ALBERTA EDITION
Volume 20 No. 1
CANADIAN PROPERTY MANAGEMENT MAGAZINE
April 2012
focusing on Growth By cheryl mah
P
roperty management offers diverse opportunities and is essentially a people business — the two main reasons why Chris Hawley still enjoys the field after 30 years. “I really enjoy the people aspect — mentoring staff as well as addressing tenant needs,” says the 52-year-old vice president of property management at Westcorp Properties. “Property management boils down to dealing with people’s issues. They present their problems and we solve their problems.” Growing up in Toronto, Hawley was introduced to the building industry and real estate business by his father, a general contractor. “My father owned his own construction company that was involved primarily in building schools so weekends we travelled around and visited sites where construction was ongoing as a family and checked up on them,” recalls Hawley, the middle child of five boys. After graduating with a BA in Economics from McMaster University in 1981, he joined the family business for about five years. He then worked as senior THE B.C./ALBERTA EDITION
property manager with Canada Trust in their real estate division (Truscan), managing their Toronto and Ottawa portfolio. In Ottawa, he managed and revitalized the World Exchange Plaza. “It was a brand new Class A building in the downtown core and I was brought in to stabilize the property because it had run into difficulties primarily with the retail component,” says Hawley. When Oxford Development Group assumed all of Truscan’s management services in 1994, he oversaw their commercial portfolio in Ottawa as general manager. In 2000, Hawley joined Realstar Management Group, managing their residential portfolio in Toronto and Calgary. Prior to joining Westcorp, he was vice president of rental operations for Greenwin Property Management in Toronto. He was responsible for a portfolio that consisted of residential properties in Ontario, Quebec and Halifax. “I was recruited by Westcorp in March 2011. They needed someone with experience in both residential and commercial and I fit the bill,” says Hawley. “I actually wasn’t sure about relocating out West but I 1
met with the owner Phil Milroy and frankly I wanted to work for him. He is a consummate entrepreneur and makes things happen. I wanted to be a part of that.” Headquartered in Edmonton with satellite offices in Calgary and Kelowna, Westcorp is a multi-disciplined real estate investment company. It offers a diverse range of services including acquisitions, development, residential and commercial property management, and hotel management. The company manages all of its own properties and focuses on developing a long-term income-producing portfolio. Responsible for day to day operations, Hawley oversees a portfolio comprising approximately 600,000 square feet of retail, office and light industrial space as well as 3,000 residential units primarily located in Edmonton, Calgary and Kelowna. The company also owns a number of parking facilities with about 1,200 parking spaces. “Right now residential is doing great. We’re seeing vacancy rates less than one per cent on average and we’re proud of that,” says Hawley, who has a team of 50. “Commercial on the other hand is challenging.” April 2012
STRONG, SOLID AND DECADES DEEP Just like our properties, Westcorp is built on a foundation that’s positioned to last. In 30 years, we’ve become industry leaders in property management, maintaining a firm grasp on today’s market. Our formula is simple: lasting relationships and exceptional knowledge combined with dedicated and motivated employees. With our steady expansion across Western Canada, we can look forward to a strong and solid future.
Explore our portfolio and learn more at westcorp.net
London at Heritage, Calgary See exterior above
Holyrood Boulevard, Edmonton
The Galen Lofts, Edmonton
College Plaza Building, Edmonton
From The editor
greenest city
L
In this issue you will also find our feature on roofing. Green roofs continue to be a topic of discussion as the industry searches for options to reduce its carbon footprint. Read about some of the tangible and intangible reasons for installing a green roof including extending the lifespan of the roof membrane, tenant retention and energy savings. Also read about tips on how to make your roof last. While the proliferation of mixed-used developments in recent years is seen as an innovative response to urban sprawl, it also poses some complicated legal issues. In our legal article, read about allocation of expense responsibility encountered in a mixed used strata corporation.
iving in Vancouver has its advantages and disadvantages. (Just mention housing prices and the conversation flies). But one thing I’ve always admired is the fact that Vancouver has been at the leading edge of embracing sustainability in terms of design, construction and policies. Many of the initial groundwork and conversations about green building practices and standards have originated on the West Coast. Last year, the City of Vancouver adopted the ambitious goal of becoming the greenest city in the world by 2020. Our energy efficiency feature takes a look at what the city is doing to reduce carbon emissions in its attempt to achieve that bold goal. One of the key strategies is to reduce GHG emissions in the construction and operation of more energy efficient buildings. For our profile, I speak with Chris Hawley, vice president of property management at Westcorp Properties. Based in Edmonton, Westcorp is a multi-disciplined real estate investment company. He describes Alberta as firing on all cylinders which is great news as the company intends to focus on growth with several development plans on the drawing board.
Cheryl Mah Managing Editor
THE B.C./ALBERTA EDITION
CANADIAN PROPERTY MANAGEMENT MAGAZINE
Vol. 20 No.1
April 2012
Publisher Dan Gnocato dang@mediaedge.ca Managing Editor Cheryl mah Graphic Design TANG CREATIVE INC.
8
British Columbia/Alberta Sales DAN GNOCATO Tel: 604.549.4521 ext. 223 Contributing Writers David Bruce Carole Dobson Andrew Pape Salmon John Wells Patrick Williams
President KEVIN BROWN Published and printed (four times yearly as follows: April, June/July, Sept/Oct., Dec./Jan.) by MediaEDGE Communications Inc. 114 – 42 Fawcett Drive Coquitlam, BC V3K 6X9 Tel: 604.549.4521 | Fax: 604.549.4522 email: bcedition@mediaedge.ca Printed in Canada
ISSN 1915-6049
February 13 & 14, 2013
www.buildexvancouver.com
THE B.C./ALBERTA EDITION
1
6
IN THIS ISSUE... Profile: Chris Hawley........................................................................... 1 Energy Efficiency ............................................................................... 5 Roofing............................................................................................... 8 Legal................................................................................................ 11 In the Headlines................................................................................ 12 3
April 2012
profile Amenities at College Plaza include a 75 foot swimming pool.
A furnished suite at Galen Lofts.
A project that has been occupying much of his time has been the complete retrofit of the Galen Lofts, a 35 unit, fully furnished property located across from the University of Alberta. An upgrade program was initiated at Galen last year involving a complete renovation and redecorating of all the suites. “We’ve invested significant amount of money into the retrofit and the return is close to 20 per cent increase in rental revenue. We’re excited and proud of that,” says Hawley. Another signature property for the company is College Plaza, a mixed-use complex comprised of three towers (two residential, one office) with 747 units and 200,000 square feet of office. In 1997, Westcorp became the managing partner in the property and in 2000 undertook a major two year capital improvement program. “It has performed extremely well since,” comments Hawley. “The property now has a significant amenity space that services all the various users. Most properties don’t have the extensive amenities that are offered there — a games room, a 75 foot pool, fitness facility, library, theatre and many different conference rooms.” All properties undergo regular assessments for potential upgrades to improve their value as well as to attract and retain tenants. April 2012
All properties undergo regular assessments for potential upgrades to improve their value… “Providing a good product and customer service is key to tenant retention. People want to see value in what they pay in rent,” notes Hawley. “It’s listening to your tenants and understanding their needs and addressing them to the best of our ability. It’s also about being transparent and fair.” The company is focusing on growth with several development projects on the drawing board. “Alberta is firing on all cylinders right now. We’re in a period of growth with development plans high on the list. We’re also looking at acquisitions. In general, it’s an exciting time,” says Hawley. “I stay in contact with my colleagues in Ontario and the optimism in the West is much more positive than in the East.” 4
Westcorp is currently developing one of the largest residential developments in Calgary known as London at Heritage Station. When completed, it will comprise four high-rise residential towers (1,300 units and 80,000 square feet of retail). Two towers are complete and construction of the two remaining towers is set to start this year. “This is a significant property for Westcorp and we expect full build out in about 3-4 years,” says Hawley. He attributes the company’s ongoing success to its diversity and to the leadership and vision of its owner. A dynamic and experienced team of people (450 employees) has also been fundamental to that success. The company places great value on its people and offers a number of activities to build employee engagement including monthly luncheons and access to a fitness facility. As for his own personal success, Hawley believes his strength lies in taking calculated risks and thinking outside of the box for solutions. “This is a business full of opportunities and it’s been rewarding for me,” he reflects. “I would certainly encourage people to consider property management because it’s a great business to be in and there will be shortages in the coming years.” Away from the office, Hawley enjoys skiing, recreational hockey and golf. v THE B.C./ALBERTA EDITION
energy efficiency
Energy Efficiency and Climate Control
I
n 2011, the City of Vancouver adopted the bold target of being the greenest city in the world by 2020. The greenest city initiative sets aggressive targets for greenhouse gas (GHG) reductions with the goal of reducing emissions by 33 per cent by 2020 (from 1990 levels). One of the key strategies to reduce GHG emissions is the construction and operation of more energy efficient buildings. According to David Ramslie, the city’s senior sustainability programs manager, with lack of consensus at the international level it is now cities that are taking the lead in developing meaningful climate change and environmental initiatives.
One of the key strategies to reduce GHG emissions is the construction and operation of more energy efficient buildings. While nationally little has been done in terms of cutting GHG emissions, he pointed out that Vancouver through various climate change action plans since 1990 have “stemmed the tide of growing carbon emissions” while population has grown by 24 per cent and total jobs have grown by 17 per cent. Vancouver and Portland are the only governments that met the Kyoto obligations to achieve a six per cent reduction over 1990 levels by 2012, he said in his keynote address at the annual Sustainabuild Conference. “Now we’re trying to achieve a one third reduction in about eight years. It’s a huge goal.” In order to achieve the 33 per cent GHG reduction, new construction and retrofits will be a large part of the solution because more than half of GHG emissions come from buildings, primarily due to natural gas for heating and cooling, he said. THE B.C./ALBERTA EDITION
Potential sources for emissions reduction include compact communities, improved transit, new vehicle legislation, clean fuels and district energy. The goal is for new construction to be carbon neutral by 2020. The city studied 36 multiresidential buildings (because they will comprise the bulk of new housing and they are the hardest to build carbon neutral) to get a better understanding of what needs to be done to meet energy targets. The conclusion was that to get to carbon neutral, “we need to get to about 150 kWh/m2yr.” That means buildings in 2020 need to include ventilation with heat recovery, air tightness, and more aggressive facade and window upgrades. “We have to start looking at an influx of non-natural gas vent heating for hot water and domestic heating whether that’s solar panels or geoexchange,” explained Ramslie, adding the city is currently working with stakeholders about adopting ASHRAE 90.1 (2010). By adopting a new code, energy use could be reduced 15-20 per cent in 2012. He went on to discuss different areas of the city and projected heat demands. Areas of planned growth present opportunities to implement alternative energy sources for heating. The False Creek Flats already has existing district energy systems. The Downtown Eastside is looking at waste heat savings. And the entire Cambie Corridor requires new buildings to be connectable to district energy, noted Ramslie. “In Europe they’ve driven down emissions through district energy,” he said. A huge producer of waste heat is breweries and the city is in preliminary discussions with the industry about how to harvest that wasted heat. 5
Vancouver’s Neighbourhood Energy Utility system provides space heating and domestic hot water to all new buildings in Southeast False Creek.
He concluded by comparing the arrival of green buildings to the arrival of the personal computer. It was exciting but didn’t really change our lives until computers were connected together by the internet. We can only achieve so much in terms of carbon emission reductions on a building by building level but when we connect green technologies and network hardware, we begin to achieve more than the sum of the parts, he said. v April 2012
energy efficiency
Energy Efficient Windows and Glazing By Andrew Pape-Salmon and David Bruce
Building envelope renovation with new glazing assembly.
P
roperty managers may consider replacement of older window or glazing systems for the buildings they manage, creating an opportunity to reduce energy costs and noise transmission, while improving comfort and building aesthetics. “Fenestration” products include windows, skylights, storefront, window wall, curtain wall and sloped glazing and sliding and hinged doors with or without glazing. For the purpose of this article, we will refer to windows as including fenestration types other than doors. Energy performance is measured by the heat transmittance from interior to exterior (U-value) and the amount of solar heat transmitted through the window to the interior of the building (solar heat gain coefficient). The U-value determination includes the glass, along with the frame systems that are typically manufactured of wood, aluminum, vinyl, fibreglass or a combination of these. U-values may range from very poor performance U-value of 6 watts/m2·K (equivalent to R1) to U=1 (R6). New residential winApril 2012
dows have typical U-values in the range from 2 to 1 (R3 to R6), the latter with triple glazing. By comparison, an insulated 2x6 wood-frame wall can perform at R14 to R17 effective levels, meaning that the heat loss through a window could be 2 - 6 times that through an insulated wall. ENERGY STAR® is a voluntary program administered by NRCan that qualifies windows, doors and skylights, primarily those installed in houses and low-rise buildings. Figure 1 illustrates the four climate zones that are used for increasingly stringent energy efficiency standards in colder climates.
Market Transformation Windows installed in small buildings are regulated under the BC Energy Efficiency Act (EEA), administered by the BC Ministry of Energy and Mines (MEM). All products manufactured after January 2011 must achieve a U-value of 2.0 or less — for new construction or retrofit applications. This effectively mandates that all windows sold in B.C. have a low-E coating. Windows must be tested and certified by an accredited cer6
tification organization (CO). Following testing, manufacturers must affix two labels on each individual product: (1) a permanent CO label illustrating that the product complies with the Act; and (2) a removable U-value label for consumers to view, providing a similar purpose as the EnerGuide label on appliances and heating equipment. Enforcement of the regulations is by Ministry inspectors — typically tracking compliance at a manufacturer and distributor level. Larger buildings under construction or during major renovations are regulated by the BC Building Code that references the ASHRAE 90.1 standard, aligned with energy codes across the United States. This standard includes a number of energy efficiency requirements for windows and is enforced by municipal building inspectors. The EEA explicitly exempts windows that comply with ASHRAE 90.1 (along with exemptions for heritage buildings and other categories). However, if windows are being installed without a municipal building permit, it will be regulated THE B.C./ALBERTA EDITION
energy efficiency Figure 1: ENERGY STAR climate zones.
Indoor Air Quality and Sustainable Buildings go hand-in-hand by the EEA. Since commercial glazing products have aluminum frames for strength and durability a less energy efficient standard is permitted for large buildings, albeit still typically requiring a low-E coating to comply. Prior to introducing regulations, MEM adopted a “market transformation” approach to energy efficiency starting in 2005 with the strong endorsement of the voluntary ENERGY STAR standard. MEM’s initiatives included the launch of a provincewide incentive program in 2006, hiring a “capacity building coordinator” to support over 50 manufacturers with retooling their product lines, providing financial assistance for CO testing of products, tax incentives and finally, $30-$70/window rebates under the LiveSmart BC: Efficiency Incentive Program that includes whole-house energy assessments.
Benefits Energy efficiency windows offer one significant benefit — reduced heat losses and resultant energy cost reductions. For example, the installation of six ENERGY STAR windows in a typical house in Prince George, B.C. can reduce energy consumption by 6 per cent compared to a double glazed aluminum window. While window replacement may not be costeffective based on energy savings alone, it is cost effective to upgrade to ENERGY STAR levels if windows are being replaced for other reasons. The “incremental costs” of energy efficient windows are covered by energy savings. For a mid- to high-rise apartment building in Vancouver, replacement of older windows with a non-metal, EEA compliant THE B.C./ALBERTA EDITION
window can reduce the overall energy demand of the building by 4.4 per cent. There are a number of other benefits: • Improved comfort through reduced cold spots and reduced overheating in buildings. • 85 per cent less ultra-violet radiation with less fading and damage to building furnishings. • Less condensation and potential of mould growth due to warmer interior surface temperatures. • Reduced drafts if proper installation procedures are combined with envelope updates. • Reduced outdoor noise transmission. • Market opportunities
IAQ Credit Assistance for LEED™ and BOMA BESt IAQ & Mould Assessments hazardous materials management (i.e. asbestos) general occupational health & safety consulting
Energy rating systems for houses and buildings (e.g., EnerGuide Rating System and ASHRAE Building Energy Quotient) are being developed, with the potential for widespread application. This allows for property managers to command a higher lease rate due to energy efficiency, or be the object for tenants that have procurement policies such as public sector agencies. Furthermore, if disclosed as part of a real estate sales transaction, such information may have a bearing on sales price. Through the efforts of MEM and partners, the market has been transformed in British Columbia to ensure consumers benefit from energy efficient windows and glazing assemblies. v Andrew Pape-Salmon, P.Eng., MRM, is director of the Energy Efficiency Branch, B.C. Ministry of Energy and Mines. David Bruce, P.Eng., is energy efficiency compliance enhancement coordinator. 7
April 2012
roofing
roofs that last By John Wells
W
hy does it sometimes seem that some roofs are like cheap suits? They don’t work very well and they don’t last very long. Why do many roofs fail or begin to fail after only a few years of service? Everyone has a roof, everybody needs one; there are a lot of choices, it costs a lot of money and there is a plethora of materials and products available to solve your problem. I have inspected stone roofs in Switzerland which date from the 10th century. They still function. There are slate roofs in Germany which are 800 years old. They still function. There are thatch roofs in England which are 600 years old. They still function. These are roofs that last and they show that almost anything can be a roof and they all exhibit the first secret of roofing success and that is:
the referenced elements and forces but no material is perfect and it is up to the purchaser or specifier to understand all the necessary forces and design to those requirements. The choice of membrane product under certain circumstances could be the cause of major problems. For example, a high tensile strength membrane, in conjunction with a relatively weaker substrate may work fine in moderate Vancouver climate but with the colder climate in Edmonton, the tensile strength of the membrane would increase as the membrane temperature became lower and the differential stresses on membrane and substrate can lead to failure. Other examples include membrane materials that may react differently when exposed to reflected heat situations in very warm and sunny locations. Some membranes react negatively when ponded water is present. Some thermo plastic membrane materials are chemically incompatible in contact with asphaltic membranes. Manufacturers use long term warranties as a major marketing tool. The warranty does not keep the water out of your building. The warranty is not a panacea for good design, good construction and good installation. The owner is always responsible for maintenance. There are many well proven roofing systems and assemblies and if you try and design within the parameters of this proven available technology then you will minimize problems. Remember that some materials work better than others in some instances. All materials are not “equal” no matter what the roofing sales person says! This knowledge and the use of common sense and experience bring us to the third step for roofs that last.
1. DRAIN THE ROOF All of the roofing materials described are assembled in a system or method that was developed and improved at least until something else that was demonstratively superior took their place. All of these systems and many similar ones did have one common denominator and that denominator leads us to the first step of the five steps to roofs that last.
2. DRAIN THE ROOF A roof has certain simple functions. The roof provides protection from many elements but the primary function in most climates, is to protect the user from water. An umbrella therefore could be described as a portable roof. Keeping out the water is only one function. The roof has to protect from the weather and at the same time it is protecting you, the roof has to itself withstand all the elements; frost and snow and rain and wind and hail and sun and UV and pollution and mechanical forces like kids and airliners dropping ice bombs. It is important to note that not every roof serves every function. Some roofs may offer outstanding protection for some of April 2012
3. DRAIN THE ROOF If the roof drains well, and a major problem like a membrane split occurs, the amount of water to enter the building can be relatively small, minimizing the damage or interruption to building operations. 8
THE B.C./ALBERTA EDITION
roofing In our 20 years of institutional and commercial consulting practice, we have seen a lot of roofs, many of which although failing, have functioned for a long time. Why have these roofs lasted so long? The truth is more than the fact that the older buildings are of heavy construction and are poorly insulated. The reason that many of these old roofs have not leaked is that the vapor retarder was a substantial one and usually built on a non-deflecting, dimensionally stable deck and this is the membrane that has provided the waterproofing function for years. And last but not least, many of these old building roofs have pretty good slope to drain. Built-up roofing membranes did last a long time on the types of buildings for which quality built up roofing was suited. Buildings with rigid frames, usually concrete and sometimes heavy timber and roof assemblies with minimal insulation worked well and given a modicum of maintenance, 30 to 50 year lives were not uncommon. Buildings have changed and so have the materials. We are now seeing many of the so-called new materials (including single ply) entering their 25th year or more of service life and like everything, some do better than others. There is still no substitute for quality materials, quality of design and most important, quality of regular maintenance.
defining your needs can be pretty helpful. The consultant’s credentials should include credible roofing industry experience and knowledge, independence from any one supplier or manufacturer and no direct links with any contractors. Ideally, the consultant has some professional education and experience, carries appropriate insurance to cover the work he or she performs and has wide industry affiliations with which to work.v
4. DRAIN THE ROOF
John W. Wells, RRO, is the senior partner and president of Wells Klein Consulting Group Inc., and a director of RCI, Incorporated. WKGI is headquartered in Victoria, with offices in Delta (Vancouver). www.wellsconsult.com v
There are still some really poor roofing details being used in buildings today and they are not all the designers fault. There is no magic to good roofing details but there is common sense and logic. Water will travel anywhere it likes to, including uphill. Water will go through stucco and poor concrete by capillary action if no other way exists. The usual causes of roof leaks are poor workmanship and bad detailing exacerbated by poor maintenance. The designer can’t do much about poor workmanship, that is someone else’s responsibility. He can and should however, provide sensible, logical details that are buildable and accessible for repairs and long term maintenance. Roof leaks rarely occur in the field or middle of a roof, rather leaks almost always occur at a flashing or termination or roof penetration and the causes as discussed, are poor workmanship and bad detailing. Problems often occur when tenant improvement involve a new roof penetration for vents or HVAC. The roof penetrations must be performed by competent roofers to appropriate standards and this is often not the case. Attention must also be paid to roof warranties when such renovations are being performed. Communication between landlord and tenant and appropriate follow-up is essential. Please, don’t depend on caulking of any kind to act as the only line of defense to keep water out of a roof system. Too many times we see a perfectly good roof system ruined because a perimeter detail ended with a caulked termination.
Serving the lower Mainland Since 1966
PRofESSional DuCt ClEaning • Residential • Commercial Dryer Exhaust Cleaning Specialists improve air quality for a healthier environment. Reduce heating & air conditioning costs
Call The Clean Team 604.270.8488 • 604.591.3484
www.powervac.ca
5. DRAIN THE ROOF Consider the retention of an experienced qualified roof consultant to supply the independent expertise that you may not have in house. His or hers independent expertise in interpreting and THE B.C./ALBERTA EDITION
9
April 2012
roofing
the green trend By Carole Dobson
but perhaps provide the greatest benefits to building owners. Green roofs provide appealing landscapes that are often visible not only to building occupants, but to those in surrounding buildings. Studies have shown that in the case of office workers and hospital patients, an overlook onto green roof landscapes reduces stress, creates a stronger sense of wellbeing, increases productivity and, in the case of hospitals, helps in the healing process. In Edmonton for example, the Royal Alexandra hospital recently installed a green roof named the Ted and Lois Hole Healing Garden.
Extensive green roof on QUEBECOR, a public telecommunication company based in Montreal.
H
ave you noticed green roofs in your community lately? Have you considered including one in your next building? Green roofs can now be found all over Canada, from Vancouver to Fort McMurray, Toronto to Halifax, and points in between. They can be designed to provide environmental benefits exclusively, to provide enhanced lifestyle opportunities, even to provide a framework for urban agriculture. Let’s take a closer look at this greening trend: who is building a green roof, what are some of the pros and cons, and what can it mean to building owners. A building owner might consider the installation of a green roof for tangible and intangible reasons. Some of the most compelling reasons include energy savings, extension of the lifespan of the roofing membrane and tenant retention. A green roof will contribute to other factors which may or may not result in direct savings to building owners: reduction of the urban heat island effect, storm water management and cleaner air.
Energy consumption The growing medium (ie: soil) and plant material that are part of a green roof contribute to a reduction in energy consumption of buildings, by keeping them warmer during winter and cooler in summer. In Toronto for example, air conditioning needs can be reduced by 25 per cent when a roof is covered with 10 cm growing medium plus grass cover. Plants grown on April 2012
Certification the roof are an effective insulating layer against heat transfer through roofs. The air trapped in growing medium and leaf mass provides additional insulation.
Reduction of the Urban Heat Island Effect (UHI) Temperature differences of up to 6 °C have been measured between urban and rural areas in some cities. The UHI increases the concentration of ground level pollutants such as ozone, smog and nitrous oxides, and contributes to increased energy costs through increased operation of air conditioning systems. Green roofs can reduce the heat island effect by moderating the heat gain on roofs and thus reducing the heat transfer into buildings.
Extension of roof lifespan Did you know the surface temperature of a conventional roof can reach 50 - 70°C on a summer afternoon, while on an adjacent green roof, the membrane will maintain a temperature of about half? Fluctuation of daytime temperature of a conventional roof causes physical stress on the membrane due to expansion and contraction, and is a major cause of roof membrane deterioration. Green roofs reduce the heat gain and surface temperature fluctuations, and provide protection from ultra violet degradation thereby extending membrane life by two times. Finally, the social benefits of green roofs are likely the most difficult to measure 10
Building owners today are often interested in participating in certification programs that promote specific environmental criteria. LEED is a certification program which has become the internationally accepted benchmark for the design, construction and operation of green buildings. A green roof contributes significantly to LEED points and will help a building achieve a higher LEED level. Another popular program is BOMA BESt, a national environmental recognition and certification program for existing commercial buildings. It recognizes best practices in creating healthier workplaces and has standards for offices, open air retail, light industrial, shopping centres, and multi-unit residential buildings. Green roof building costs can be quite variable depending on the design and type of the green roof (simple or complex), accessibility and depth of material used, and whether the project is new construction or a retrofit to an existing structure. A green roof can potentially double the cost of installing a traditional residential waterproof roofing membrane. However, the full life cycle cost of a green roof can also make it a more attractive alternative, especially when the building is intended for long-term use. v Carole Dobson is an agronomist and horticulturist who works for Soprema Canada Inc. She is the Sopranature green roof advisor for Western Canada, and can be reached at cadobson@soprema.ca. THE B.C./ALBERTA EDITION
legal
mixed use strata corporations A Trip to Hell? By Patrick Williams
A
mixed used strata corporation can be any of a number of different strata corporations, but for the purposes of this article, I will address strata properties that include commercial strata lots. They could be commercial/residential, commercial/hotel, commercial/resort — it does not really matter for the analysis that this article will comprise. If it is not “commercial”, I will call it “other” (I considered calling other the “enemy” but my mediation training dictated otherwise). The existence of common property and common expenses is what predicates a strata corporation. The commercial and “other” may be separate sections, the subject of types bylaws or they may be no delineation in the bylaws. It is vital to understand what form of strata corporation exists. A review of the strata plans won’t be particularly helpful but a review of the bylaws is critical. The bylaws will reflect whether there are separate sections, types or “nothing” (nothing being a true marriage). The commercial section (and the other) will have a separate executive; will be able to enter into contracts on behalf of commercial; may have bylaws that only affect commercial, may sue in the name of commercial; may have a commercial contingency reserve fund; and will be responsible for common expenses that are for the sole benefit of commercial. If there are types bylaws, the commercial type (and other) will be responsible for common expenses that are for the sole benefit of commercial, but commercial does not have the ability to deal with those other matters that are available if there are sections. If neither sections nor types bylaws exist, then the commercial and other are truly married, and the amendment of any bylaws will require 3/4 vote resolutions of the commercial and the other. Section 91 of the Strata Property Act (the “Act”) provides that a strata corporation is responsible for the common expenses of the strata corporation — so
THE B.C./ALBERTA EDITION
very simple! And so begins the trip to hell. Common expenses are defined in the Act as “(a) relating to the common property or common assets of the strata corporation, or (b) required to meet any other purpose or obligation of the strata corporation”. Just about every dispute in a mixed strata corporation arises because commercial and other cannot agree whether a common expenses is for the sole benefit of commercial, or the joint benefit of commercial and other. The list of expenses is endless. Garbage. Different containers and different garbage disposal contracts? Sounds easy. But there are typically common areas that benefit both commercial and other. Which disposal company will deal with that? Security. Retail mall will have different security than the high rise residential. Commercial pays for mall security to the exclusion of residential other. No problem except the same security company and contract patrols parkade which includes residential and mall parking. Section 99 of the Act requires all common expenses to be paid on the basis of unit entitlement — a different formula can be mandated with a unanimous resolution. Sounds simple and quite straight forward. However, applying the legislation to specific scenarios has become a challenge for counsel and ultimately judges. There have been cases in which a petitioner has attempted to change the unit entitlement formula for a strata corporation on the basis of consumption or use. Ernst & Twins Ventures (PP) Ltd. v. Strata Plan LMS 3259, 2004 BCCA 597 Shopping complex in Richmond comprising 265 strata lots. Three sections — commercial, parking lot and signage. The initial developer budget allocated expenses on use. The court held that unless an expense was a sole benefit to a section, the contribution to the expense must be calculated based upon unit entitlement. The parking units received a benefit from the landscaping and garbage removal (a parkade benefits from a nice looking complex). There was no 11
ability to allocate cost based upon the degree of benefit a strata lot received from an expense. Strata Plan VR 1767 v. Seven Estates Ltd., 2002 BCSC 381 The court held that the owner of the parkade (a large strata lot) benefited from the repair and maintenance of the building envelope of the strata lots constructed above the parkade and the parkade owner had to contribute to the building remediation based upon unit entitlement. Shaw v. Strata Plan LMS 3972, 2008 BCS C 453 Residential section was paying unit entitlement share of water expenses (about 28 per cent), installed a meter and learned it consumed 1 per cent (commercial consisted of Starbucks and Delaney’s Coffee shops). Attempted a s. 100 unanimous resolution and commercial voted against the resolution. The court found that there was significant unfairness regarding the water (but not other expenses, although argued) and ordered a s. 100 resolution passed. The court has since held that Shaw did not apply to other cases because it was sectioned and the residential section had installed a separate meter for the residential lots which enabled it to calculate common expenses incurred exclusively by the residential section to be borne by the residential section. Mixed use stratas will continue to be a “trip to hell” with respect to allocation of expense responsibility when it can be argued even an infinitesimal benefit is received by a strata lot or a group of strata lots. In such situations, unless all can agree by unanimous resolution, unit entitlement, and not consumption or use, will govern. v Patrick A. Williams is a partner with Clark Wilson LLP of Vancouver, B.C. He has addressed strata disputes since 1979. He is a trained arbitrator and mediator, but still finds himself in court frequently, dealing with strata disputes. He calls it dealing with the five “P’s”: People, Pets, Parking, Pot and Prostitution. April 2012
in the headlines Most Expensive
Infrastructure Barriers
Vancouver is Canada’s most expensive office market according to the Office Space Across the World 2012 by Cushman & Wakefield Commercial Real Estate. Though rents in Vancouver’s central business district only increased modestly over the previous year, they remain the highest in the country, by far, at an average of $33.87 CAD/square foot/per year. The high rents in Vancouver are the result of demand outpacing supply. No new buildings will be coming to market until at least 2014. The lack of available space is largely due to continued global economic uncertainty that stemmed from the 2008 recession, which had developers being very cautious. Toronto and Montreal also show fast growth in rates placing number 4 and 8 spots on the top 10 list for rate growth in the Americas.
According to a KPMG Global Construction Survey, “lack of leadership by government” and “lack of private sector initiative” emerged as the most significant barriers to infrastructure development in an industry that is facing increasing demand. The report also found that infrastructure is so vital to growth that even the most cash-strapped governments will inevitably give it a higher priority—or face a drastic change in lifestyles for their people. Worldwide the expected cost for infrastructure over the next 40 years is approximately US$70 trillion. The Great Global Infrastructure Opportunity, surveyed 161 engineering and construction companies around the world with revenues ranging from US$250 million to more than US$5 billion. The survey found that: publicprivate partnerships (P3s) are most likely to be focused on energy and transportation projects; 80 percent believe government is showing lack of leadership over infrastructure development; and 49 percent of respondents expect their backlogs to increase from 5 to 15 percent.
New Anchors Several major retail tenants will occupy space in the uniquely designed, 600,000 square foot Emerald Hills Centre in north Sherwood Park, Alberta. A strong lineup of international, national and regional box tenants will join current anchor tenant Wal-Mart Canada. These tenants include Winners, Bed Bath & Beyond, Visions Electronics, and Golf Town. Several more well-recognized brands are currently in negotiations to join the pedestrian friendly ‘contemporary urban village,’ designed specifically to encourage walking and window shopping. The initial phase of construction is forecasted to be complete by summer of 2012 with stores open for business in September 2012.
Tallest Wood Structure B.C. is planning to build what is expected to be the tallest wood building in North America. The proposed 10-storey Wood Innovation and Design Centre in Prince George will become a test case for creating a value-added forest products industry around tall wood building construction methods that would differ radically from the way traditional mid-rise and even highrise buildings are constructed. The province will seek qualified firms to design and construct the building out of engineered wood beam products instead of traditional concrete and steel beams. The province has already received 34 expressions of interest. April 2012
TELUS Garden Cushman & Wakefield has been selected by TELUS and Westbank to lease out Vancouver’s most prominent office development. TELUS Garden, targeted to be Canada’s first Leadership in Energy and Environmental Design (LEED) Platinum building based on the new 2009 standards, is a onemillion square foot mixed-use development that will occupy nearly an entire city block. It is the cornerstone for the commercial resurgence of West Georgia and Robson streets in downtown Vancouver’s financial core. The new 24-storey tower will be approximately 500,000 square feet, and include green building systems and leading-edge TELUS technology, creating unparalleled opportunities for tenants to reduce their environmental impact while offering their teams efficient, collaborative and modern working space.
Brookfield Acquisition Brookfield Office Properties has entered into an agreement to acquire the Bow Parkade, a seven-story public parking facility located on a half city block in the heart of downtown Calgary at 6th Ave. SW and 2nd St. SW, for $90 million. Brookfield already owns the eastern half of the block, known as the Herald Site, on which it has an existing application to construct a 1.2-millionsquare-foot premier office tower. The entire block will now be able to accommodate approximately 2.8 million square feet of new development. Brookfield is a major commercial property owner in downtown Calgary, with eight office assets totaling 6.5 million square feet, including Bankers Hall and Suncor Energy Centre. The Herald/Bow Parkade block is downtown Calgary’s foremost development site, providing Brookfield with the opportunity to create another landmark addition to its global portfolio. 12
Mall Development Two malls totalling 2.3 million square feet is planned in Tsawwassen. It will be B.C.’s largest shopping complex. Ivanhoe Cambridge is set to break ground later this year on 1.2 million square feet of destination retail and entertainment space. The enclosed mall named Tsawwassen Mills will follow the model of the CrossIron Mills mall north of Calgary and Vaughan Mills north of Toronto. An outdoor retail mall called Tsawwassen Commons by Property Development Group will be 550,000 square feet.
Largest Island Development Construction of Victoria-based League Financial Partners’ $1 billion mixed-use project in Victoria is underway. Capital City Centre (formally referred to as Colwood Corners) is the biggest urban development on Vancouver Island, replacing two 30-year-old malls and creating a new downtown in Colwood with a 14-acre development that will include housing, retail and four floors of office space, at least a third of which will be sold as strata. Full build out is expected in 20 years. League’s new headquarters will be located at the centre. THE B.C./ALBERTA EDITION