Vancouver seeks to break gridlock on viaduct removals, but where will the money come from?

Dan Fumano: City hall still plans to replace the Georgia and Dunsmuir viaducts with a street network, but it doesn’t know how they will pay for it

Concord Pacific’s unveiled a plan this week to build a dozen towers on a piece of the former Expo lands that perhaps makes the long-discussed Georgia and Dunsmuir viaducts’ removal a step closer to reality.

While the city still plans to replace the viaducts with a ground-level street network, it’s far from a done deal, even with Concord’s announcement: city hall does not know where the money will come from for the viaduct removal, or even how much it will cost.

A decade ago, in 2015, a Vision-majority council directed staff to proceed with what was then described as a $200 million plan to demolish the 1970s-era elevated roadways. By 2018, when Vancouver’s next council approved the Northeast False Creek plan for this area, the estimate for the entire project of replacing the viaducts with a street network was between $400 and $500 million.

That 2018 figure is the city’s most recent detailed estimate, but it’s fair to say that if the project started today, the cost would be substantially higher.

And the actual work is not likely to start any time soon.

When the 2018 area plan was approved, city planners believed the $400 to $500 million needed for the viaducts could be raised entirely through development in the area.

“Clearly, the financial strategy identified in the 2018 plan needs to be revisited in light of current realities,” Matt Shillito, the City of Vancouver’s director of special projects, said Wednesday.

Those realities include significant cost escalation for all kinds of infrastructure projects at a time when the revenue the city can extract from condo development has not kept pace with those rising costs.

“So where does the money come from? Well, that is a matter of ongoing discussion and investigation by the city,” Shillito said.

Second-term ABC Coun. Sarah Kirby-Yung said the longer the viaduct project is delayed, the more it will cost the city.

“I’m confident, given the size, the scale, and the cost, it’s going to require the province to come to the table,” she said.

In recent years, developers have agreed to provide a combined $210 million to the city that has been earmarked for the viaduct project: $110 million from Concord Pacific and $100 million from the owner of the neighbouring Plaza of Nations site, as part of its rezoning in 2018.

With Concord Pacific now looking to build 5,000 homes in this new Northeast False Creek project — including skyscrapers of 65-plus storeys, taller than any in the city — it’s likely the city will look to extract more money from the developer as part of that rezoning, some of which could go toward the viaducts.

Kirby-Yung thinks so.

“100 per cent. They’re looking at a more ambitious plan… they’re looking for significant additional density,” Kirby-Yung said. “And they can’t realize their vision without taking the viaducts down. So it’s in everybody’s best interests to figure out a model that works to get that job done.”

Cameron Gray was Vancouver’s director of housing from 1991 to 2009, when most of the Expo lands were developed, but left city hall before conversations about the viaducts’ removal began in earnest.

Gray said dismantling the viaducts, which were designed in the 1960s to support a freeway system that was never built, and replacing them with space for streets, homes, and public amenities, makes sense from a planning perspective.

“If they can free up some land and maintain an efficient street system, that’s great,” Gray said, but there are still “question marks” around how to pay for it.

“It sounds like they are still looking for a lot of money,” he said.

Gray worries that if the viaducts’ removal is delayed for years, that could leave major development projects like Concord Landing and the Plaza of Nations “in limbo for years” delaying or jeopardizing several thousand homes at a time when governments want to increase housing supply.

Gray said it’s frustrating to imagine those prime downtown properties sitting empty for another decade or two, especially while the Broadway plan is seeing new development potentially demolishing many of the city’s (relatively) more affordable rental homes.

“Redevelopment is happening of existing housing, when, boy, it would be a lot better if we could focus our development on those sites that are undeveloped, sites that don’t require the loss of existing affordable housing,” he said.

While the viaducts remain in place, the city needs to keep spending money to maintain them, which could cost millions over the next four years, said Lon LaClaire, Vancouver’s general manager of engineering services.

That maintenance budget, while not insignificant, is a fraction of the hundreds of millions the viaduct replacement will cost.

LaClaire said the seismic upgrades that would be required after 2032 are “so significant, it would easily be hundreds of millions.”

The viaducts’ replacement is a question of when, not if, LaClaire said. “And from my perspective — because these are expensive structures to maintain — the sooner the better.”

Despite the uncertainty around funding, Shillito said he is “still optimistic that the overwhelming logic and the benefits that the plan provides will mean that we will get it done.”

“And I think that Concord’s signal to move forward with the project now really helps give us the impetus to roll up our sleeves and look for solutions to the funding gap.”