Jon Stovell, President & CEO of Reliance Properties, discusses his firm's active real-estate development pursuits in the City of Victoria, and the future of the Capital's real-estate development industry. Citified.ca
Northern Junk, Capital Iron lands and Victoria real-estate development Q&A with Jon Stovell of Reliance Properties
Ten on the 10th
Published April 10, 2021
Citified's Ten on the 10th is a monthly question-and-answer segment connecting our readers with the insight and knowledge of Victoria's top real-estate and business professionals.
April's Ten on the 10th features Jon Stovell, President & CEO of Reliance Properties.
Asking the questions is Ross Marshall, Senior Vice President of the Victoria offices of commercial real-estate brokerage CBRE. As a leader in facilitating large-scale commercial real-estate transactions throughout the Capital Region – which include apartment complexes, industrial retail and office properties, and land/development opportunities – Ross and his team are at the forefront of market-leading real-estate transactions on Vancouver Island.
Would you like to be featured as part of a future Ten on the 10th Q&A? We'd love to hear from you.
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Let's start with an introduction of Reliance Properties, its history, and what attracted your company to development opportunities in Victoria.
Reliance Properties is a family property investment and development company founded in Vancouver over 60 years ago. Reliance’s main asset classes are condominiums, offices and rental apartments situated primarily within inner city and urban locations. Reliance also specializes in heritage building adaptive reuse, for which we have won numerous awards, and we own one of western Canada’s largest portfolios of heritage buildings.
We were attracted to Victoria’s climate, compact urban scale, walkability and culture. That is what primarily drew us to this market, and of course, Victoria's numerous heritage-related real-estate opportunities in the downtown also focused our efforts.
You have been successful in acquiring multiple landmark properties over the past several years. How long have you been investing in Victoria?
Our first investment in Victoria was the Northern Junk waterfront heritage buildings that we acquired in 2010, which is 11-years into seeking development approvals (formerly known as the Johnson Street Gateway, and now 1314-1318 Wharf Street). Our second purchase was the former Janion Hotel building also on the waterfront and not far from the Northern Junk properties. The Janion Hotel, which Reliance redeveloped into micro-condominiums along with a new-build wing that fronts onto the harbour, completed in 2016 and won a National Heritage Trust award and other industry awards.
Can you speak to your recent acquisitions, and your plans for each?
In addition to several development projects, we have also been acquiring investment assets. Currently, we have ten properties all situated within the City of Victoria.
While The Janion is complete, our Northern Junk effort is now in year 11 of the municipal approvals and permitting process, for which we have a public hearing scheduled in May. The present-day vision calls for a significantly scaled-back proposal from earlier iterations, comprising of heritage rehabilitation of the Northern Junk warehouse buildings and a collection of rental apartments.
Slightly north of the Northern Junk properties, our newly-acquired Capital Iron lands are planned to move forward as a major project for the north side of the downtown at over seven-acres on which 15-to-16 buildings will rise with uses that include marine-related and light industrial spaces, offices, cultural enterprises and residences. The project is at the heart of Victoria Council’s vision for an ‘Arts and Innovation District’ in the Burnside-Gorge community’s Rock Bay area.
And finally, there are several other pursuits at the early planning stages that include 780 Blanshard Street which is earmarked for a heritage building adaptive reuse.
Could you update us specifically on the Northern Junk, and what’s next for that proposal?
To preface the Northern Junk project, I’d like to reiterate that the municipal planning and approvals process for The Janion went relatively smoothly, and I think the entire community is happy with the outcomes of that project. We are certainly quite proud of the National Heritage Trust’s recognition of the final product that successfully re-purposed a prominent and previously derelict landmark along Victoria’s harbour.
The Northern Junk process has been quite challenging, and we are now in our 11th year of working towards a proposal that we are hopeful will garner support from council this spring. The buildings have been vacant for over 43 years, and we believe that for the benefit of the city as a whole, it is time to stop stopping the Northern Junk project.
The positives of a new landmark residential building that will meticulously incorporate heritage assets along with revitalization of the lower Yates and Johnson Streets precinct, an extension of Victoria’s harbourfront pathway, dedicated public access to the waterfront through the Northern Junk properties and the addition of new residents and businesses to Old Town are significant for downtown Victoria, and we feel it is in the best interest of all stakeholders for us to move forward.
We are also excited by the prospect of a re-activation of Reeson Park as a welcoming green space for all residents to enjoy, and with the addition of dedicated rental housing within the project, we believe the slight deviation from the City’s heritage guidelines that is required for the proposal to successfully move forward is the right move.
At our last appearance before council for referral to public hearing, the letters of support vastly outnumbered opposition, showing that the community at-large is keen to see the Northern Junk buildings restored and more housing built. Even the City’s heritage planner, and the most recent past heritage planner have voiced support for the project, which is a testament to many years of effort that have gone into this site.
We have developed a website for the project which provides the most recent updates and details that are pertinent to the public hearing scheduled for May. Members of the public can access this information, and connect with council, at https://northernjunkvictoria.ca/
With Northern Junk moving closer to securing approvals, when do you anticipate we’ll learn more about the Capital Iron lands?
We plan to submit the masterplan rezoning for the Capital Iron lands by the middle of the year and it will be very interesting to see how that massive project unfolds over the coming years.
Many developers who were previously focused on acquiring development sites in the downtown core of Victoria are now looking to other municipalities for development opportunities, yet you remain focused on projects in the downtown core. What is it that is making developers look elsewhere, and why do you remain committed to the core?
We are urbanists at heart and that is where we believe a lot of future growth will be. Although I won't say we are not also looking at those other communities where growth is strong and development appears less difficult. That said, we see a lot of strong interest in the downtown area with a post-COVID wave of capital building and a lot of competition for good assets and opportunities.
And yes, development approvals in the City of Victoria can be more unpredictable due to the complexity of working within a multi-layered urban realm that must weigh its historic past with inevitable growth in the years ahead.
Victoria is changing, and there are challenges that inevitably come with change.
In your opinion, where is Victoria today, and where is it going?
I think the City and the community as a whole is struggling a little bit with its identity as it sits on the cusp of changing from a large college and government town, or perhaps a ‘Museum City,’ to a globally relevant urban area at the gateway to the Pacific Rim. Think of Vancouver and Victoria as New York and Boston. The development community, who by definition are agents of change, are the meat in the sandwich of tensions around that inevitable growth. That is not an easy spot to be in, but the rewards of delivering on the potential of a city like Victoria far outweigh the challenging nuances of this role.
‘Hard costs’ for developers continue to escalate to record highs. How can we develop affordable and attainable housing with the cost of development putting upward pressure on the cost of homeownership and rental prices?
That is a tough one. Density can always help with reducing the costs of land per unit within a project, and we are now at a time when the Official Community Plan in Victoria has been eclipsed by growth realities, meaning densities are lower than they should be to ensure we can provide housing that is both affordable to the local market, and attainable for homeownership by local residents.
And yes, construction costs continue to pose an obstacle to affordability at five times the cost per square foot of the land acquisition itself, so out of every $1.20 of investment, $1.00 is construction costs, but there is not much Victoria as a city can do about that.
There are ways that the City of Victoria, specifically, can help, however, with changes to the pace of approval times and a reduction in the costs of doing business in the municipality which ultimately pose barriers to development and can weigh heavily on affordability.
What does the future hold for Reliance Properties in Victoria?
We have ten major properties in the City of Victoria that over time can add up to over two million square feet of development potential, so we are in Victoria for the long term and highly committed. In fact, we have opened a local Victoria office for property management and we expect to grow a local development team.
I hear you’ve got a passion for music and guitars. Is this your escape from your exceptionally busy and demanding work schedule, and do you have other hobbies or interests that we may not know about you?
When I am not playing guitar in my free time I like to spend my time shopping for guitars. My favourite store in Victoria is Guitars Plus on Blanshard Street. And if I’m not searching out guitars, you can find me either cooking (which I love), or at the gym. Of course, the odd round of golf in ‘golf Mecca Victoria’ is fun as well. C
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Article resources
- Would you like to be featured as part of a future Ten on the 10th Q&A? We'd love to hear from you
- View CBRE Victoria's website here
- View Reliance Properties' website here
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