Could East Vancouver’s iconic Kingsgate Mall go up for sale?
An institution to some, and an eyesore to others, the eclectic shopping centre has served Mount Pleasant for more than four decades.
But what few of its customers likely know is that the land is owned by the Vancouver School Board.
The mall’s lease is up for renewal next year, and that’s raising all sorts of questions about what will happen to the property.
Option to sell?
A controversial audit ordered by the provincial government last year called on the board to look at selling off non-core properties, including the Kingsgate land.
The mall that currently sits there is owned by the Beedie Development Group, and held on a 99 year lease.
But with the property valued at nearly $80 million, that’s raising questions about its future.
VSB chair Mike Lombardi is quick to point out that if a sale did happen, the money couldn’t be used to plug the district’s $24 million budget shortfall.
“A lof of people are under the impression that if we sell that we can use it for our operating budget. We can’t. There’s two kinds of budgets school boards have, operating budgets – ours is $500 million to run our schools, pay for our teachers, our band and strings – [and] we have capital funds, which are $10 million a year. You can not co-mingle those accounts, they are both separate and distinct by law.”
He adds that Beedie would be the only potential buyer, since it holds the long-term lease, which could reduce any selling price.
Money from the sale would be used to create a capital account the board could use to top up construction projects or school renovations.
While selling the land would pad the board’s capital accounts, it could come at the cost of the district’s already struggling operating budget.
The board currently pulls in about $750,000 a year from the property, which would vanish in the case of a sale leaving the district deeper in the hole.
“Well yeah, it’d mean we’d have another three-quarters of a million dollar shortfall next year. We would have probably some good capital, but we would have almost a million dollars less in our operating budget.”
He adds that if the district does renegotiate the lease, it could end up doubling the rent.
“Our understanding from our real estate advisors is that we could probably increase our three quarters of a million to potentially one and a half million to two million. So that’s the easiest solution.”
If the mall isn’t sold, that doesn’t mean it won’t face the wrecking ball.
Lombardi says the VSB has absolutely no interest in developing the site itself, wary of a repeat of the Olympic Village fiasco.
But he wouldn’t rule out a new Beedie development with new lease terms.
“A variation of that idea might be that he re does the mall, and he pays us lease for that and then he gets the air rights to build on top of that. We have a real interest in maintaining annual revenues because you can see how that helps our operating budget.”
The public is being invited to weigh in on what happens to the property over the next two weeks, with the question “what you value for Kingsgate Mall, now and in the future?”
The Board is accepting tweets and emails, and is also holding an open house at the mall on May 1st.
Lombardi says he hopes to have a report form the consultations ready by the fall.
Historic East Vancouver
The property was acquired by the City of Vancouver and the School Board in the late 1800s, with Mount Pleasant School built there in 1892.
Nearly a century later, Kingsway and Broadway had become a thriving area, and the board built a new school in a near y residential area, vacating the property in 1972. Two years later the land was leased and a mall built.
The mall has at points gone through hard times, but owing to its eclectic shops and clientele, has also developed something of a cult following – including a parody Twitter account and earnestly awkward tribute video.