October 10, 2012
Development corporation set to turn a profit
VENTANA CONSTRUCTION CORP.
Surrey City Development Corporation (SCDC) is on a roll as it projects 2012 profits will land its first dividend cheque on the table of shareholder, the City of Surrey.
“Last year was really a break through year,” said SCDC president Jim Cox.
The municipal development corporation formed in spring 2007, posted a $2.2 million profit in 2011, but dragged an accumulated $2.8 million operating deficit from start-up and developments costs of about $200 million in emergent projects.
“In the real estate industry, it takes years to make projects happen,” said Cox, who added the $622,419 operating deficit as of December 2011 will be wiped out this year.
The development corporation’s first set of buildings includes a $12 million brewery building in the Bridgeview Industrial area, the $100 million Surrey city hall and civic plaza project, a partnership with Townline Homes for a 141 townhouses in the Clayton area, with Townline serving as general contractor, and Phase 1 of the Campbell Heights North industrial site.
“We are very proud of these first buildings,” said Cox, whose corporation’s financial and operational success is a sweet reply to critics who in past municipal elections harpooned its losses and lack of progress.
Cox said 2013 will continue the success and that their plate is pretty full.
Aubrey Kelly, SCDC’s vice-president of construction and development, said projects that are expected to start in 2013 include the Cloverdale Mall redevelopment by Townline Homes, a five-storey concrete and wood mixed use building. Also slated for late 2013 is the III Civic Tower, but a general contractor hasn’t been selected yet.
Further downstream are the Simon Fraser Residences with 234 beds and Lecture Theatre proposed at Surrey Centre, said Cox.
SFU is currently shoring up funding.
SCDC has entered into a partnership with Bosa Properties for an office tower at Surrey Centre, but construction start will hinge upon market conditions, he said.
SCDC, owned 100 per cent by the city, has broad powers to advance the development of commercial, industrial and residential projects within the city.
Originally, acknowledged Cox, private developers were wary, but SCDC is not there to compete
“And we don’t ask for any special treatment (by the city),” he said.
It strives to turn a profit but also bring development, jobs, and economic spin-offs to the city, as it can kick-start under-utilized areas.
Cox said the SCDC has three roles. The first two roles are managing and consulting.
It co-ordinated the development of the Civic Centre Master Plan and is now overseeing the construction, carried out by PCL Constructors Westcoast Inc., for the new city hall and plaza.
“We manage projects for the city,” said Cox. “And, we do projects ourselves.”<0x000A> At Bridgeview Industrial park, SCDC is doing a suit-to-build 60,000 square foot brewery for Central City Brewing Corporation, a venture that is a revenue stream property in SCDC’s lease portfolio.
The construction is being carried out by Ventana Construction.
“We are building our portfolio,” said Cox. “We will own it and the tenant will operate it and pay rent.”
Kelly said new construction at Bridgeview, located along the South Fraser Perimeter Road, is expected to draw in new business and jobs.
“We are not the only developer there,” he said.
Another project under SCDC direct development is 200-acre Campbell Heights North industrial park, which will be developed over five phases in the 32nd and 40th Avenue and 188th and 192nd Street area, with clients buying lots and doing their own build outs.
The third role that SCDC plays is in partnering or taking an equity position with existing developers on projects. Cox said the policy of the SCDC is to rely upon the developer’s expertise in construction.
SCDC is in partnership with the Century Group and Patrick Cotter Architects on III Civic Tower, a 50-storey, mixed-use building near city hall.
“We do not work directly for the municipality,” said Kelly. “We answer to the board and our main shareholder is the municipality.”
The arm’s length relationship allows the SCDC to by-pass much of the politics that a municipal development officer might encounter, said Cox.
It also provides the flexibility to react to market conditions.
Kelly said contractors can find information about up-coming projects at the SCDC website, but contracts for bid will be posted either on BC Bid or, if they are a municipal contract, on the city’s website.
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