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104-unit Wellburn’s Market redevelopment loses bid for heritage restoration and seismic upgrade tax holiday

The Wellburn's Building at 1050-1058 Pandora Avenue at Cook Street, as it looked circa 2018. The building is part of a comprehensive redevelopment effort that includes a 50% retention of the 1911-structure, its Pandora Avenue and Cook Street facade, and a new-build component with over 100-units of rental apartments and ground floor retail space.  Citified.ca

104-unit Wellburn’s Market redevelopment loses bid for heritage restoration and seismic upgrade tax holiday
Mike Kozakowski, Citified.ca
Victoria council has rejected a property tax break application for heritage and seismic work at a North Park and Harris Green-bordered building currently in the process of being converted into rental residences and commercial spaces.
 
 
Primex Investments and partner Nicola Wealth were seeking a $1.6 million property tax holiday split over a ten year period for restorative efforts at its $33.3 million Parkway development at 1050-1058 Pandora Avenue under the auspices of Victoria’s Tax Incentive Program (TIP), an initiative dating back to 1998 that assists developers with heritage preservation and seismic upgrades considered socially important beyond the immediacy of the property and its occupants or leaseholders.
 
As part of a presentation to council on February 16, staff referred to the TIP application (centred on the 1911-built Wellburn’s Building, which formerly housed the Wellburn’s Market), as a “unique situation,” due to the TIP being administered by the Victoria Civic Heritage Trust (an organization that works to support heritage preservation and promote heritage investments in the City), and how the program had become “a victim of its own success,” with “developers’ wishes …outpacing what or how the program was initially intended to work.”
 
Approved in December of 2020, Primex’s and Nicola's proposal for a four and six-storey mixed-use building incorporating elements of the Wellburn's Building secured its heritage designation, rezoning and heritage alteration permitting authorizing the comprehensive redevelopment of the property.
 
Plans call for the retention of approximately 50% of the Wellburn’s Building’s structure, and a full restoration of its Pandora Avenue and Cook Street heritage facades. Seven retail units will be street-oriented, while 104 rental apartments will be situated above. An underground parkade and the new building's footprint required removal of a portion of the Wellburn’s Building, according to the applicant.
 
With heritage retention and seismic work expected to cost $1.7 million, Primex and Nicola theoretically would have been eligible for the full $1.6 million TIP, the City said, helping to nearly offset costs related to those efforts.
 
A rendering of Parkway.
A rendering of Parkway, a six-storey redevelopment of the Wellburn's Building on Pandora Avenue by Primex Investments and Nicola Wealth.  Primex Investments and Nicola Wealth
 
However, due to the developer’s filing of the the tax break application after work on the project had already begun, staff recommended for council to reject the application in order to not set a precedent contradictory to TIP’s stated goal of only granting tax exemptions prior to construction, and not retroactively. Staff did acknowledge, though, that council may view the application through a different lens that would yield an approval.
 
Staff suggested to council, based on information from the applicant, that should the tax break not be recovered, the outcome could be higher rents, and the organization’s future investments in the City could be hampered. Despite this, the applicant did reiterate to staff that it is committed to completing the project.
 
Council was not made aware that a prior developer of the project, District Properties, had, in fact, previously applied for the tax break before construction started, only that the 'applicant' was involved in an earlier process with the Trust that bogged down. Eventually, under the direction of a new team headed by Primex and Nicola, deconstruction of a portion of the Wellburn’s Building had commenced without tax break approval. The decision to proceed, council was told, could have been the result of logistical necessities amid challenging market conditions and rising construction costs.
 
"What we're hearing from developers is they cannot afford to wait to start construction for a number of reasons, one being they are fearful they will lose the trades," staff told council. "They are making calculated decisions to go ahead."
 
As part of that initial application, the Trust drafted a letter to the City in mid-2021 which stated that in the Trust's opinion, the proposal did not meet the intent of the TIP due to only partial heritage retention of the Wellburn’s Building, along with an absence of a seismic assessment done prior to structural design work, and “inconsistencies” between approved plans and other technical drawings. As such, the Trust declined a tax holiday.
   
At the February 16 meeting, elected officials ultimately sided with staff and the initial decision of the Trust by rejecting the application, based primarily on not wanting to create a precedent contrary to TIP’s intention of granting tax breaks prior to construction or demolition commencing. Nevertheless, several councillors expressed their support for Primex's and Nicola's project and recognized the importance of their efforts.
 
A representative from the development partnership will present before council on February 23 in the hopes additional information can provide more context to the February 16 staff presentation, and potentially change council's mind.
 
The Wellburn’s Building was constructed in 1911 as a mixed-use commercial and residential complex. Its Wellburn’s Market closed in January of 2020 after many decades in business as a downtown grocer. Demolition work for the redevelopment began in early 2022. C
 
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