The dynamics between shopping centre developers can be quite complex and rather secretive. CBC is reporting on the dramatic unfolding of a B.C. Supreme Court decision between Ivanhoe Cambridge, the owners of Burnaby’s Metropolis Metrotown Shopping Centre (and owner of Tsawwassen Mills Mall) and Concord Kingsway, an arm of Concord Pacific real estate development. Concord Kingsway owns a Sears store and the land that it sits on at Metropolis.
In 2013, Sears Canada issued a news release describing its intention to turn the site into a massive mixed-use development that would include residential and office high-rise towers with retail on the ground floor, including a new store for Sears. In 2015 Sears closed a $100 million dollar agreement with Concord Kingsway to jointly develop the site.
However, there was a an agreement signed in 1986 which was not signed by the two developer parties which stated that both Metropolis and the Sears site were to be “operated, supplied, maintained, repaired, altered and reconstructed as a unified, first class, integrated regional shopping centre”. Sears said that the agreement is vague. Ivanhoe Cambridge said that Sears cannot redevelop into a mixed use project without its permission.
It’s an interesting stand-off as Sears is redeveloping its holdings into a mixed use project that can capitalize on the housing market, is close to transit and also achieve city driven goals related to housing density. The court decision was that Sears needed to give 15 months notice and couldn’t build anything deemed “incompatible with the existing shopping centre. It also couldn’t close the Sears store for more than 150 days.”
“In general, when somebody is proposing a large development, the neighbouring properties sometimes have challenges with it if they feel the development would affect the development potential on their property or negatively impact them in some way,” Andrew Evans of Colliers International stated. While other Burnaby malls like Lougheed and Brentwood are looking at how to bring mixed use and higher densities to the sites, information exchanges between development corporations can be privileged. In the court proceedings it turned out that Ivanhoe Cambridge was also exploring “redevelopment options”.
Even after the court decision, neither developer was talking. But it is clear that shopping centres are exploring residential mixed use as a way to enhance their bottom lines, as retailing shifts and housing prices rise.