• On October 21, 2019, City Council approved a Disposition and Development Agreement (DDA) with Holland Partner Group regarding a proposed mixed use development of Block 10, a full city block owned by the City of Vancouver, located between Columbia and Washington Streets and 8th and 9th Streets.
• In the approved DDA, the City agreed to consider a long term ground lease of the property to Holland in exchange for completion of the project as proposed.
• Block 10 is the last remaining vacant block from the former Lucky Lager Brewery purchased by the City in 1993 for redevelopment.
• Holland proposes to build a full-block mixed use building consisting of 105-110 residential units, 80,000 square feet of office space, 10,000 square feet of ground floor retail space, and an internal two-level parking garage, with construction to commence no later than the second quarter of 2020.
• City staff and Holland have agreed to the terms of a long-term ground lease with an option to purchase, with such lease to take effect no later than December 31, 2019, in order for Holland to make full use of the available Opportunity Zone incentive.

Goal 8, Objective 8.1: Make downtown Vancouver a vibrant destination for the community and the region.

Action 8.1.1: Surplus Block 10 and issue an RFP to solicit a use that will contribute to the downtown vitality

Block 10 is a 41,681 square foot vacant City-owned block located east of Columbia Street and north of 8th Street in downtown Vancouver, zoned CX, City Center.

In the early 1990s, the City of Vancouver purchased five full city blocks on the north, northeast, and east sides of Esther Short Park from the Lucky Lager Brewery Company, which had vacated the property several years before. This purchase and subsequent planning efforts through the Esther Short Redevelopment Plan of 1998 spurred the dramatic improvements to the park itself and redevelopment of a number of properties in the vicinity of Esther Short Park, the oldest known public park in the Pacific Northwest. Block 10, which refers to its designation among the original thirty blocks included in the Esther Short Plan, is the last remaining vacant block of the former brewery blocks. The block was vacant and without any structures when the City purchased it in the early 1990s.

In May of 2019, City Council, in response to a proposal from The Holland Partner Group for a large mixed use project on Block 10 which would utilize the newly created Opportunity Zone incentives, provided direction to staff to commence negotiations with The Holland Partner Group with the intent to construct a large mixed-use project on Block 10.

The proposed development is described as follows:

• 80,000 square foot, four-story office building above a two-story parking deck, with 40,000 square feet to be occupied by Holland for their corporate headquarters
• 105-110 apartments in a five-story building over the same two-story parking deck
• 110 parking stalls on portions of two floors with driveway access from 8th Street on the south and 9th Street on the north.
• 10,000 square feet of active retail uses are proposed along portions of Columbia, 8th, and Washington Streets, with particular emphasis on the corners.
• A courtyard above the second floor would be usable by tenants (floors above the parking deck are in the shape of a "U" with the opening to the south).

Key elements of the lease agreement include:

• Project will be developed as described in the Disposition and Development Agreement
• The term of the lease will be for 60 years, with a single 39-year extension right of the tenant
• Rent will be as follows: Lease Year 1 through the earlier of substantial completion or Lease Year 3 = $30,000/year; The balance of Lease Years 1 through 3 if substantial completion prior to the end of Lease Year 3 and Lease Year 4 = $66,500/year; Lease Years 5-10 = $133,200/year; Lease Year 11-29 = $166,500/year
• Every year beginning the 5th Lease Year, base rent will be increased by the CPI subject to a maximum 3 percent adjustment
• Annual Base Rent in the 30th, 45th, 60th, and 80th Lease Years will be increased to the greater of either: a) the CPI Adjustment amount or b) five percent of the Revaluation Fair Market Value. In no event shall the Base Rent increase by more than 15 percent on a Revaluation Date.
• Target dates are established for project milestones, including obtaining a shoring and excavation permit (March 18, 2020), commencing construction (May 31, 2020), obtaining a building permit for the podium (June 9, 2020), obtaining an office core and shell permit (September 2, 2020), obtaining a permit for the multi-family building (September 2, 2020), and obtaining a tenant improvement permit (April 29, 2021)
• Improvements shall be designed and constructed substantially in accordance with the approved conceptual design plans
• Reference is made to the change to VMC 20.630 "Building Lines" section of the Land Use and Development Code that would be required to allow the proposed design, and the tenant agrees that there is no obligation under the lease to approve such a code amendment in favor of the project
• Holland shall deliver any improvements on Block 10 installed by Vancouver's Downtown Association to them at Holland's sole cost and expense
• Holland agrees that it shall lease at least two floors containing approximately 40,000 square feet for its corporate headquarters for a period of at least ten years.
• City agrees to terminate the right-of-way permit for the bank drive-thru on 9th Street no later than 30 days prior to estimated commencement of construction
• Holland, upon execution of the lease, will deposit $250,000 to be held in security by the City. Such deposit shall be refunded to Holland once $5,000,000 in hard costs for the construction of the new improvements has been expended.
• Holland agrees to pay any additional rent, all taxes and assessments on the property and shall arrange and pay for heat, light, water, gas and sewer and for all other public utilities during the full lease term.
• Tenant shall have the right to purchase the property for fair market value at the end of the 60th, 80th, and 99th Lease Years.

1. Facilitates the construction of the largest mixed use project in downtown - including the most space devoted to office use (80,000 square feet) - since the Recession;
2. Retains and grows employment in the downtown;
3. Activates the last remaining block from the City's acquisition of the former Lucky Lager Brewery nearly 30 years ago;
4. Active retail uses along Columbia, 8th, and Washington Streets will strengthen connections between Main Street and more recent development around Esther Short Park;
5. The project will provide 105 -110 units of housing, of which 20% will be workforce units rented at no more than 100% of Area Median Income for a period of 8 years;
6. Project will be among the first to utilize the Opportunity Zone incentive; and
7. The proposed lease will provide an ongoing source of revenue to the City for further downtown redevelopment efforts.