The BC Tree Fruits Packing House demolition in 2017. Credit: Dig It Contracting

The North End is the Yaletown of Kelowna? PC Urban Says So

Is this a hopeful sign for creative spaces, or a glitzy end run around gentrification straight to sell out

Kelowna real estate agent Steve Laursen has partnered with Vancouver’s PC Urban to sell the commercial flex and office units being built along the Clement Ave. corridor between Ethel and Richter, and a press release recently went out to the media praising the development’s virtues. Laursen’s main marketing pitch:

“We are offering a rare opportunity for local businesses to purchase high-end, funky, office and retail strata space in the Yaletown of Kelowna”.

PC Urban’s CEO, Brent Sawchyn is on board with Laursen’s Yaletown comparison. “It’s not quite in the core of the town per se. It’s very similar to what you see here in Vancouver, in Gastown and Yaletown. They’re just some unique older places that provide a different awareness and a different vibe for people and people are looking for something that’s a little less typical these days”, he explained recently.

Yes, this section of previous industrial wasteland situated on 56,000-square-feet of land, dubbed the Packing District is being compared to one of the most densely populated neighbourhoods in Canada, home to mostly the uber rich and many chains and hi-end shopping outlets, with some unattainably-priced office space sprinkled in.

Sawchyn also brings the media’s attention to the promise of spaces for light manufacturing and studios being imagineered into their potential market: “whether it’s an interesting yoga studio, whether it’s an eclectic catering place, whether it’s an urban distillery” (InfoNews, 10/01/2019). Small local businesses.

Always curious about studio space, this has me wondering what’s on tap. Are they (1) offering up some vapid aspirational marketing talk that doesn’t remotely fit the area? Doing that fake tone-deaf luxury spin thing lazy marketers do? Or (2) are they referring to the possibility of studios, ateliers and creator spaces (long gone from Yaletown, if there ever were any, other than ad agencies) implied (though oddly never realized lol) in these post-industrial light-manufacturing atelier type rejuvenations of neighbourhoods like Yaletown. Which could be pretty cool for Kelowna. Or sadly (3) does it even matter what the stated aims are if the economics of it betray the entire possibility of this becoming a creative producers’ business hub? Let’s see.

Photo: Shane Birley, Flickr

Yaletown is a weird analogy …or IS it?

With Vancouver city planning guidelines loosely enforcing heritage designation, the development of Yaletown focused on preserving and using original buildings through renovation restoration. Out of that came streets lined with handsome brick warehouses built on rail platforms, with attractive cantilevered canopies and pleasant public spaces, and community assets like the Roundhouse. Many deemed it a resounding success, lauding its transformation from a former industrial district into a self-contained, ultra-hip neighbourhood. Of course you can easily argue that it was probably hip for like a few months, mostly due to newness and seriously good bones, before it went full Williams Sonoma.

A loft-living, art-dealing, fine-dining, rejuvenation clinic-ing, upscale shopping district in a revitalized corner of industrial-era, downtown Vancouver caters to those that can only be described as moneyed on the low end of the income scale, to the super rich at the top. But in early days its boosters were vividly painting it in the image of that romantic bohemian lifestyle for creative types, with many marketers paying a studied sanitized homage to Yaletown’s gritty past. My SO, once a waiter in a new “cool” pool hall there tells me it was never edgy, never artsy, it just looked the part. While you could argue that Yaletown and many of these post-industrial rejuvenation projects are most always a cultural letdown given the creative and community-oriented infrastructure potential that gets absorbed by the Cactus Clubs and Whole Foods (or SaveOn Urban Fare), what they did have going for them is architecture, and even some strong public space planning.

Note: Yaletown was a success architecturally, sure, but it relied on the displacement of lower-income, long-term residents due to Expo 86. Photo: Yelp

PC Urban’s new project along the Clement corridor does not have the funky warehouse bones, or the overarching civic planning of Yaletown. So if Yaletown’s redeeming features are missing, then naturally we have questions about this pitch.

Are they trying to sell the simulation of the simulation of artisanal, bohemian space? A derivative dream? Is it the Poochie of planning? Are they cynically selling outmoded hipness to us bumpkins in Kelowna who wouldn’t know a primitive utilitarian aesthetic from a storage locker? (…wait a minute), or are they honestly describing it as the overpriced uninteresting, chain-friendly space that Yaletown is? Or is this pitch deliberately vague and tapping into the aspirational influencer set who are simultaneously hot for locally and socially responsible rootsiness and so-cuteeee conspicuous consumption? To many small businesses in Kelowna those ideals somehow intersect – at least on the IG if not IRL.

Gettin’ over the hype to appreciate the potential

This project is hailed as an homage to our industrial past. Even though the BC Tree Fruits plant was knocked down in 2017 giving PC Urban a completely blank slate to work from, they are committed to the past on the purely superficial level. Their development proposal states that it’s “a simple and rigorous design philosophy that draws up the area’s industrial heritage”. Okay I won’t roll my eyes at this puffery – I mean industrial buildings without heritage are pretty much just boxes no? And seriously, as long as locals can get all industrious up in it and start making stuff, it doesn’t have to look like, or draw from some Yaletown-ified take on fruit packing.

Here’s the renderings:

PC Urban rendering

PC Urban rendering

PC Urban rendering

PC Urban rendering

Maybe we just have way too many takes (and we didn’t even go in on the ironic commodification of “Packing House” rootsy working class grit to sell speculative post-industrial products like real estate). Perhaps this small biz/studio flex space scene will be for real, Kelowna styles: an ugly basic build maybe, but one with the potential to house our cities’ growing artisans, makers and creators.

All of the units being built are offered for sale, starting at $379,000 for the smallest space. Steve Laursen explains in the press release: “The attractiveness of commercial condos is that, with a low-interest environment, small business owners see real value in ownership. These businesses are able to grow equity through their real estate. They’re able to improve space and reinvest in it knowing that they’ll benefit once the time comes to sell the property. They’re able to control their costs and expand or contract their business instead of being at the whim of a landlord. They control their own destiny.”

PC Urban has done this before in Vancouver, and with much success as all of the units sold out well before their build. However it was in the midst of the most rapidly gentrified and financialized real estate of Vancouver, just blocks from WeWork, Hootsuite campus and ground zero for investment condos.

Show Me the Money

Laursen lauds the ability for “small business owners” to reap “real value in ownership” here, but I’m struggling to see how any smaller business might be financially approved for such a unit. Given these are not live/work spaces (popular in other “warehouse districts” subsidized by local governments like Toronto’s Artscape), you’d have to assume that a small business owner owns and/or rents a home/apartment elsewhere in the city. So on top of their existing mortgage or rent, the expectation is that an additional $1,700/mo is doable (plus strata fees) with 5% or roughly $19,000 needed (plus GST) as a down payment (using a basic commercial mortgage calculator with a 3% interest rate amortized over 25 years).

Sure, arguably that monthly rate is likely less than what most small businesses fork over in rent on say Bernard or Lawrence in downtown Kelowna (for now, hmm, hmm interest rates), but they need mortgage approval and the requisite down payments that go with it. Rental agreements are obviously far less binding and offer more access, less outlay and less long term commitment.

“Whether it’s an electric bike manufacturer, whether it’s an interesting yoga studio, whether it’s an eclectic catering place, whether it’s an urban distillery, I think all of those are beginning to emerge in Kelowna,” PC Urban’s CEO says, alluding to the potential inhabitants on the new units.

And sure, that’s certainly one possibility. But with a little more public control, planning and bold vision, it could become an actual mixed-use space and not just a license for real estate players to pump up their profit margins. For example, in Vancouver, the similar rejuvenation PC Urban project built in the Mount Pleasant area where “high tech and creative businesses are moving in alongside craft breweries and eclectic coffee shops, it’s a community that celebrates innovation, creativity and the new economy, and at the same time, its history” (BC Business), some of their creative neighbours were not too happy with the developer’s high-rise plans. Since the development project claimed heritage status, variances to the height restrictions were allowed, sending the building far higher than the neighbourhood max and literally throwing shade on Vancouver’s greenest solar-powered sound studio. The neoliberal laissez-faire approach to urban renewal and development clearly can use some help from city governments it seems.

Post-industrial creative renewal: where heritage variances allow you to render your celebrated sound studio neighbour’s green business useless

Our concern is that without material changes like specific city land use zoning, planning and financial incentives for “light industrial” needed by the creative class to thrive, these types of developments will be bought up by commercial real estate players. The Callahan Property Groups and HM Commercials of Kelowna will just lease them out to businesses they feel are far more financially predictable, and can improve these owners’ bottom lines. Moreover, if deep pocketed law offices, banks and other conventional office businesses are allowed in light industrial zones, what will happen to the real light industrial creators? The occupants of the aforementioned PC Urban heritage revitalization project in Mount Pleasant are a massive wellness company that makes aromatherapy candles to sell in mall outlets, Saje, a WeWork type co-working space, a flash workout studio, and two fast casual food chains – not exactly the light industrial of the neighbourhood it resides in.

And so, ironically, here is the more realistic Yaletown comparison: more chains, spas, banks, and destination party bars – effectively an upscale or corporate services area catering potentially to a class of people that doesn’t necessarily reflect its immediate surroundings at all.

And just like what occurred in Yaletown following its transformation, this inevitably spells trouble for residential and commercial tenants residing in the area right now. It’s how shopping and other consumption-based lifestyle pursuits by an increasingly upper-middle class of users push out the active participation of lower-income earners who can no longer afford to engage in their own consumption needs.

Neighbourhood in Transformation

The potential for this area gentrifying will be further aided by the PC Urban’s adjacent rental apartment development the Lodges (directly across from the RCMP building). Listed at $1,300/mo for a one bedroom and $1,780 for a two bedroom, it’s touted as affordable housing, but how these units are affordable is anyone’s guess.

Kelowna was just recently cited as the seventh most expensive rental market in Canada with the average prices of a one-bedroom unit ringing in at $1,280 or $1,700 for a two-bedroom (a tidge below what PC Urban wants for the Lodges).

Furthermore, a new report released in the summer by the Canadian Centre for Policy Alternatives says that low-income workers can’t afford rent in 91% of Canadian cities. The study centred on an interesting metric called “rental wage”. This is the hourly wage a person needs to make in order to be able to rent a place using no more than 30 percent of their pre-tax income, 30 percent being the widely used threshold for housing affordability. The national rental wage for an average-priced one-bedroom apartment is $20.20 per hour, which works out to $42,016 annually, significantly higher than minimum wage anywhere in the country.

PC Urban are targeting perspective residents of the 158 rental apartments with an income range between $52,000 and $71,000, or way more (10 – 25k) than the national rental wage for an average-priced one-bedroom apartment.

During the council meeting when the Packing District was approved earlier in the year, Councillor Luke Stack was pretty pumped about the project. “As I look at the look of this building, I think it will be a tremendous addition to our downtown area on Clement,” he said. “These fields have been just empty fields for years, and years, and years, and to actually see a beautiful building with multiple uses coming in here, I think it will be just fantastic,” he added.

While it’s definitely nice to see the further urbanization of downtown Kelowna (BC Tree Fruits on Vaughan Ave will be vacating soon too), with PC Urban’s Packing District plans, you have to wonder who they are built for, and if it’s anyone resembling Yaletown business owners, or Callahans, it will look more like a hipster Highway 97 strip mall or a tourist party destination belt than a vibrant local business and retail hub. And that’s a huge missed opportunity that could set the direction of the North End’s commercial and industrial development away from affordable spaces for the creative class for good.