• The Waterfront Gateway site is a 6.4-acre site owned by the City of Vancouver located at the vacant lot south of City Hall and the City Hall parking lot.
• In November 2019, the City Center Redevelopment Authority (CCRA) entered into a Memorandum of Understanding (MOU) with the City of Vancouver authorizing the CCRA to lead the development of the Waterfront Gateway site.
• In November 2021, LPC West was selected as the partner and master developer for planning and developing the Waterfront Gateway site following the CCRA’s issuance of a request for qualifications (RFQ).
• LPC West proposes to develop a mixed-use district consisting of 340 market rate residential units, 95 permanently affordable units, 35,000 square feet of ground floor retail space, above ground parking structure and a 100,000 square feet cross laminate timber office building and two acres of open space.
• City staff and LPC West have agreed to terms in a Disposition and Development Agreement (DDA), a copy of which is attached, and the key terms outlined below.
• The CCRA reviewed the DDA at its September 21, 2023 board meeting and unanimously recommended that Council approve the DDA.
• Staff requests Council to adopt the resolution attached to approve the DDA.

Economic Opportunity - a place where a wide variety of businesses of all sizes grow and thrive.

Housing and Human Needs – meeting basic needs and partnering with organizations to support the community.

Vibrant and Distinct Neighborhoods – a variety of accessible places and spaces.

Safe and Prepared Community – a safe place to live, work, learn, and play.

Climate and Natural Systems – Environmental stewardship and efforts to address climate change to ensure a sustainable future.

Waterfront Gateway is a 6.4-acre City owned site located at the vacant lot south of City Hall and the City Hall parking lot, zoned CX, City Center.

In November 2019, the CCRA entered into a Memorandum of Understanding (MOU) with the City of Vancouver authorizing the CCRA to lead the development of the Waterfront Gateway site.

The project started with community visioning workshops to review, comment, and build upon concepts the project team pulled from successful downtowns and districts around the country. Opportunities were offered online through the project’s BeHeard page as well as in person workshops. The community input was consolidated into a list of goals and design considerations that were articulated in the Master Developer Request for Qualifications (RFQ). Key elements of the vision were a mixed-use development with mixed income housing, retail and office; active ground floor uses and outdoor public spaces and amenities to encourage year-round activity; a publicly accessible visitor attraction; reinforce pedestrian and bicycle connections to and from the site; and to create a unique district that becomes a destination unto itself. The feedback received from the visioning workshops helped frame the RFQ.

The project was paused over 2020 and the first quarter of 2021 due to the COVID-19 pandemic. The RFQ was then issued in March 2021. In November 2021, LPC West, the west coast arm of national real estate firm Lincoln Property Company, was selected as the partner and master developer of the site. Thereafter, the CCRA entered into an Exclusive Negotiation Agreement (ENA) with LPC West that set forth that the parties will collaborate on a master plan for the site and negotiate the terms of a Disposition and Development Agreement (DDA) for the site’s development.

The proposed development is described as follows:

•  95-unit affordable housing building with 100% of units at or below 60% Area Median Income
• 2 market rate residential buildings with approximately 340 units total
• Approximately 35,000 square feet of ground floor retail
• Approximately 100,000 square feet 8-story cross laminate timber officer building
• 510 parking spaces across a 6-story parking garage for private and public parking and underground parking below the market rate apartment building known as Building 1
• Approximately 2 acres of open space

Substantive elements negotiated by the CCRA and City staff included in the DDA are as follows:

• Disposition of all parcels except for the affordable housing parcel will be through a ground lease for 50 years with two 15-year extensions. The affordable housing parcel will be sold to LPC West for $1 with a 50-year permanently affordable covenant attached to the land. In the event the affordable housing parcel is not developed for the purposes of affordable housing, or the construction of the project does not commence within 90 days from the sale date, the City has the right to take back the property, and the Initial Deposit of $100,000 will be released to the City and nonrefundable.
• Target date for draft form of ground lease and purchase and sale agreement for Council’s approval is within 90 days of execution of the DDA.
• LPC West has an option to develop an office building on the site. The City instructed an independent economic analysis of the office financing market that verified the economic uncertainty of the office financing market that justified this option right. In the event LPC West cannot secure debt and equity financing for the office within 33 months from the DDA Effective Date, and in this event only, both parties can discuss the option of extending the option period. LPC West has full intention of developing the office building when the office capital markets stabilize.
• Closing date of all parcels except the office parcel is no later than 33 months from the DDA Effective Date with 3 months to start construction. Closing date of the office parcel must occur no later than 36 months after the DDA Effective date, subject to LPC West exercising the office option.
• Public benefits of the project include:
  •  Affordable housing with 100% of the units at or below 60% AMI
  • Contracting opportunities for black, indigenous and people of color and women owned subcontractors. Colas Construction, an 100% black owned general contractor is the selected contractor for the project. Targets have been set that a minimum of 20% of subcontractor contracts are awarded to black, minority, women-owned or emerging small businesses and a minimum of 20% of apprentices are hired.
  • 2 acres of open space including public plazas for year-round events. The design of the Block Y plaza and the plaza adjacent to City Hall will be subject to the City’s public design process that involves community input and the review and approval of the Parks and Recreation Advisory Commission. An operations and maintenance agreement will be entered into at a later date that will govern the open space.
  • Green building elements that are equivalent to LEED Gold certification and meet the City’s Interim Green Building Policy.
  • Opportunities for small businesses in Makers Alley. Makers Alley is located on the eastern edge of Building 1, approximately 6,700 square feet. Local, small businesses have a right of first refusal to lease the space and rigorous outreach and marketing plan for local, small businesses will be conducted. The space will be flexibly designed with shared facilities to be more accessible for local, small businesses.

• LPC West applied for the market rate 8-year property tax exemption under the previous Multi-Family Tax Exemption Program (MFTE) contributing public benefits that exceed the required $1,179,250 in the form of enhanced improvements to the public plaza on Block Y. City Council approval of LPC West’s MFTE application is included in the DDA.

• The City has agreed to share 90% of the incremental costs associated with the removal of the contaminated soils across the site but the City’s liability is capped at $2.4M. 

• Contractually construction must commence no later than July 2026 and finish no later than July 2029. However, LPC West projects to start construction in Spring 2025 and finish in Summer 2027.

Substantive elements which will be in a forthcoming ground lease agreement (to be approved separately by City Council) are as follows;

• 50-year term with two 15-year extensions with the buildings and improvements reverting to the City at the end of the lease term.

• Rent is calculated by multiplying the appraised value of the property (using the value set forth in the February 28, 2023, appraisal prepared for the City by Colliers International) by the square footage of each parcel and then multiplying the allocated value of each parcel by 6% cap rate.

• Rent is adjusted annually using Consumer Price Index (CPI) for the Seattle-Tacoma-Bellevue MSA and the CPI is capped at 5.5% with a floor of 2.5%. The rent will reset every 20 years by virtue of an appraisal but shall not exceed 10% of the rent from the preceding year. The rent will be adjusted at the closing dates.

• Rent will be abated during first 2 years of the lease term during construction and is discounted during the first 7 years of the lease term.

Separate approvals that will be needed for the project to move forward include:

• City Council’s approval of the form of ground lease and purchase and sale agreement

• City’s regulatory approval of land use/design review, engineering and building permits. 

1. Facilitates the development of a strategic site in downtown.
2.  Provides much needed housing and affordable housing downtown.
3. Grows employment in the downtown area.
4. Activates an area that connects the Vancouver Waterfront to the historic downtown.
5. Offers opportunities for minority, local and women-owned contractors.
6. Offers opportunities for local, small businesses to thrive and expand their business.