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From Thursday Nov 01/02 Globe and mail.
Developer Abandons Tech Park
By WENDY STUECK
Friday, November 1, 2002
VANCOUVER -- His dreams punctured along with the high-tech bubble, a local real estate developer is walking away from a planned $500-million technology park project and leaving the site in limbo.
Schroeder Properties Ltd. president Rod Schroeder said this week that he would hand back his interest in Tech-park.com to his lender, U.S.-based ING Realty Partners LP, which has not told him what it plans to do with the site.
"They are probably trying to figure out what to do with it right now," Mr. Schroeder said.
He said he faced an Oct. 31 deadline for interest payments on a loan from ING Realty to his privately held commercial real estate company. Instead of paying the interest, Mr. Schroeder said he agreed to hand over the property.
His firm bought the 18-acre site, in what's known as the False Creek Flats, in 1999 for about $23-million. ING Realty, a division of Dutch financial giant ING Groep NV, provided financial backing and owned 50 per cent of the site, Mr. Schroeder said.
He announced plans for a $500-million technology "campus" in November, 1999. In June of the following year, Mr. Schroeder held court at a ground-breaking ceremony that featured trucked-in sand for volleyball courts, upbeat music, balloons and illustrations of buildings planned for the site. Plans called for up to 13 buildings that would accommodate as many as 15,000 employees.
As the technology boom soured in early 2001, many high-tech companies cancelled expansion plans, shed employees or went out of business. The tenants that were to populate Tech-park.com -- and sign lease agreements that would help him obtain construction loans -- did not materialize.
With no lease agreements in sight and little hope of a quick recovery in the battered technology sector, Mr. Schroeder said he chose to simply sign over his stake.
A spokesman for ING Realty was not available to comment yesterday about its plans for the site.
The site is on land rezoned by city officials in the late 1990s to attract high-tech development. The project's collapse is not a sign that the zoning doesn't work, Larry Beasley, Vancouver's co-director of planning, said yesterday.
"Elsewhere in the flats, you see high-tech [projects] are continuing to be built," he said.
"It's not that unusual for downtown developments to see two or three generations of proposals."
Mr. Beasley said it could take decades for the area to be fully developed.
Some change is under way. Vancouver-based Finning International Inc. has, over the past few years, been selling pieces of a 28-acre site it owns in the False Creek Flats. Last year, Finning donated an 80-per-cent interest in an 18.6-acre portion of its site to four educational institutions. Those schools -- the University of British Columbia, Simon Fraser University, British Columbia Institute of Technology and the Emily Carr Institute of Art and Design -- are expected to become part of a new mix of occupants that will gradually shape the neighbourhood.
Mr. Schroeder sounds philosophical about the failure of what had been the most ambitious project in his 30 years in real estate.
"Some projects work, and some don't," he said. "This is a great project in my view, but the timing was bad."
He said his company retains other real estate assets, although he sold two shopping malls to help finance development work on Tech-park.com.
His current projects include an aircraft manufacturing venture and, perhaps surprisingly given his experience with high technology, a communications startup.
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