Downtown Retail and Residential Market Assessment and Development Strategy Chilliwack, British Columbia
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Downtown Retail and Residential Market Assessment and Development Strategy Chilliwack, British Columbia Prepared for: Chilliwack Economic Partners Corporation November 2014 Prepared by: Site Economics Ltd. 701 West Georgia Street – Suite 1500 Vancouver, BC V7Y 1C6 File (14-25)
DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
TABLE OF CONTENTS
EXECUTIVE SUMMARY ........................................................................................................... 2
1.0 SITE AND LOCATION ..................................................................................................... 8
1.1 INTRODUCTION ................................................................................................................. 8
1.2 LOCATION .......................................................................................................................... 9
1.3 THE SUBJECT SITE ............................................................................................................. 15
1.4 ACCESS ............................................................................................................................. 16
1.5 LAND USE REGULATIONS ................................................................................................. 20
1.6 POTENTIAL LAND USES .................................................................................................... 24
2.0 POPULATION & WORKFORCE GROWTH ...................................................................... 26
2.1 PROVINCIAL POPULATION ............................................................................................... 26
2.2 CHILLIWACK AND FRASER VALLEY POPULATION ............................................................. 27
2.3 LINK BETWEEN POPULATION GROWTH AND HOUSING DEMAND .................................. 29
2.4 FRASER VALLEY WORKFORCE .......................................................................................... 29
2.5 CHILLIWACK WORKFORCE ............................................................................................... 30
2.6 BUILDING PERMITS .......................................................................................................... 31
3.0 RESIDENTIAL STARTS, SALES, AND PRICES ................................................................... 33
3.1 HOUSING TRENDS AND HIGHLIGHTS ............................................................................... 33
3.2 HOUSING SALES AND PRICES ........................................................................................... 38
3.3 TARGET MARKET .............................................................................................................. 41
4.0 RETAIL MARKET OVERVIEW ........................................................................................ 43
4.1 RETAIL COMPETITION ...................................................................................................... 43
4.2 THE DOWNTOWN STREET RETAIL EXISTING TENANT MIX ............................................... 46
4.3 DELINEATION OF THE REGIONAL TRADE AREA AND DEMOGRAPHICS ............................ 47
4.4 TRADE AREA DEMOGRAPHICS ......................................................................................... 48
4.5 RETAIL DEMAND – TRADE AREA EXPENDITURES ............................................................. 49
4.6 RETAIL TENANTS .............................................................................................................. 51
5.0 DEVELOPMENT CONCEPT AND VALUE ........................................................................ 52
5.1 PROPOSED LAND USES AND DEVELOPMENT SCENARIOS ................................................ 52
5.2 FINANCIAL ANALYSIS ....................................................................................................... 52
5.3 RESIDUAL LAND VALUE .................................................................................................... 55
5.4 FINANCIAL ANALYSIS ....................................................................................................... 56
6.0 APPENDIX 1 – DOWNTOWN REVITALIZATION ............................................................. 59
7.0 APPENDIX 2 – RETAIL CATEGORIES AND TRENDS ........................................................ 61
8.0 APPENDIX 3 – ASSUMPTIONS & LIMITING CONDITIONS .............................................. 66
9.0 APPENDIX 4 – PROFESSIONAL RESUME ....................................................................... 70
SITE ECONOMICS LTD (14-25) PAGE 1
DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
EXECUTIVE SUMM ARY
The objective of this report is to provide a retail and residential market assessment and
redevelopment strategy for the subject site located at the prime five corners intersection
on the southeast corner of Yale Road and Young Road in historic Downtown Chilliwack.
This economic real estate report was commissioned by the Chilliwack Economic
Partners Corporation and the City of Chilliwack. It is intended to provide an objective
overview of the real estate market position of downtown and the optimal development
strategy for the 1.6 hectare subject site. This descriptive and prescriptive assessment
provides the economic and financial framework for a practical development plan and
site valuation.
LOCATION
Downtown Chilliwack is comprised of the city’s original commercial core area, which
follows the alignment of Yale Road, north of the CNR Railway Line. The area has
excellent regional and local transportation access and generally serves as a major
traffic corridor for local urban areas located north of Highway 1.
Though no longer strategically positioned as a key regional transportation node,
Downtown Chilliwack still offers exposure to a substantial customer base for retail and
service businesses. Its peripheral location relative to Highway 1 makes the area more
localized whereas large retail developments close to the Highway are able to draw
customers and homebuyers from across the entire region. Although downtown retail is
convenient to approximately half of the city's northern population, it lacks a large local
population base of its own and carries a surplus of under-utilized often dated,
commercial space.
Despite these challenges, common to many city centres, strong efforts have been made
to improve Chilliwack’s Downtown. Policy changes, infrastructure improvements and
civic beautification are all underway with the goal of ongoing revitalization and ever
more mixed use and residential development within an increasingly vibrant urban core.
The site is located on the Historic Five Corners intersection and is bounded on the
North by Yale Road, on the East by private buildings which front onto Nowell Street, on
the South by Princess Avenue, and on the West by Young Road. This section of
downtown is characterized by a variety of real estate, from modern office buildings and
retail to dated buildings, surface parking lots and some older single family houses.
With sufficient public and private investment, downtown would eventually become a
more desirable place to live and shop, perhaps before 2020. The area offers strong
potential if the local residential population base is increased through densification, the
commercial district is physically upgraded, and larger image-enhancing “landmark”
projects are developed.
The subject site is located within the urban quarter of the commercial mixed-use section
of downtown as outlined in the Chilliwack Downtown Land Use Plan. This area is
focused towards appropriately spaced, mixed-use buildings ranging from 5-18 storeys in
height, and is zoned primarily as C3 (downtown commercial) permitting virtually all
reasonable forms of commercial development. The stated maximum of 70 residential
SITE ECONOMICS LTD (14-25) PAGE 2
DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
units per hectare is from existing zoning which can easily be amended and it is not a
limiting factor for future development. The density limits are based on historical
development and zoning and are intended to be replaced as new projects are fully
expected to readily receive all municipal approvals for higher density. New and
additional density is seen as key to the future prosperity of the area.
RETAIL COMPETITION
Downtown used to serve the region but due to extensive new regional retail competition
on Highway 1, the area that has become, by default, a local neighbourhood-serving
shopping area. It does offer the only pedestrian and street-oriented shopping
experience in Chilliwack, which reflects a more urban lifestyle, compared to the
predominantly suburban, automobile-oriented shopping experience found in the rest of
the city. As lifestyle and more fulfilling and diverse experiences become increasingly
important to consumers, the urban appeal of Downtown should be emphasized. The
street front experience is complimentary rather than directly competitive to the suburban
experiences such as those found in nearby Eagle Landing which is located in North
Chilliwack to the west of Downtown. It is also complementary to the major retail anchors
located on the highway and in South Chilliwack.
It is important to note that Garrison Crossing, a new neighbourhood shopping centre in
South Chilliwack, has been successful despite the presence of the large scale anchor
tenants near Highway 1. It has done this by being complementary to the strong large
scale suburban competitors and emphasizing its community and neighbourhood image.
The South Chilliwack area offered large development sites on which retailers have built
large, modern stores. Downtown retailers face very significant competition, as virtually
all of the major retail anchor tenants are located on the south side of Highway 1 or near
the highway. The exception is supermarkets which are balanced on both sides, with
Safeway and Save On Foods downtown.
Local retail competition within downtown is also significant. The major mall just south of
the subject site has an excellent supermarket anchor tenant and the most professionally
run and attractive commercial space downtown. Despite the anchor and the ample
parking the mall cannot remain fully leased. There is a surplus of commercial space on
the large network of downtown streets. Due to oversupply and some outdated premises
retail and commercial rents are relatively low. The retail land uses adjacent to the site
are relatively weak and modest and include single family homes to the south. These
outdated houses across the street restrict the potential for new retail on the south side
of the subject site. These houses should e the subject of a beautification campaign and
perhaps a hedge and fencing could be used to screen the area from the subject site.
Chilliwack is enjoying very strong commercial growth but most of it is not Downtown.
Rather it is in areas like Eagle Landing and Garrison Crossing. Although there is ample
demand in the north side trade area any form of retail on site would have difficulty
servicing that demand as it would not be able to secure an anchor tenant capable of
drawing customers into the area.
SITE ECONOMICS LTD (14-25) PAGE 3
DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
RETAIL DEMAND
The subject site should have some traditional grade level retail space on Yale Road but
it cannot accommodate an anchor tenant or significant scale. In addition, retail potential
on the south side is limited by the non-retail single family houses on Princess Avenue.
The retail scale for the proposed development is limited to street frontage on Yale Road
and it would require approximately 300 linear feet of street frontage at an average depth
of 50 feet yielding 15,000 sq.ft. of space. There should be little or no commercial space
on the south side of the site given the level of oversupply and the lack of supporting
commercial development.
The retail and service trade area boundaries for the commercial core of downtown
Chilliwack are defined as the contiguous residential areas located on the north side of
Highway 1. Residents from more distant semi-rural locations tend to shop more
frequently in South Chilliwack due to its large size, and more convenient access.
The downtown’s North Chilliwack Trade Area is substantial with approximately 33,000
residents. The area is growing strongly with an average of 700 persons being added to
the total each year.
The retail demand analysis which determines average spending by trade area residents
estimated retail demand in the downtown trade area is $446 million and this is expected
to increase to $615 million by the year 2031.The majority of growth in demand will come
from ongoing population growth of 700 people per year. While retail demand is strong,
downtown stores simply cannot capture a significant share of the potential retail sales
expenditures. The commercial district does not have the scale or types of stores
required to serve the wide range of consumers needs.
A limited neighbourhood role is still an attractive alternative function for downtown. Just
as Garrison Crossing in South Chilliwack complements the large scale tenants in that
area, Downtown in North Chilliwack complements its large scale tenants in nearby
Eagle Landing.
The retail space at the subject site will likely be limited to a series of small stores
fronting Yale Road. They should consist of businesses offering personal services, food
services and financial services with some specialized retail, as possible.
There is also demand for health related services and products, given aging baby
boomers. In addition there is demand created by institutions, government, agencies and
offices, cultural facilities and other activities which generate any kind of traffic. New
private and public offices and employment located downtown would support nearby
retail and strongly enhance retail potential.
RESIDENTIAL CHARACTERISTICS AND DEMAND
Demand for residential product in Chilliwack is focused on single-family homes and
townhouses, as well as some low-rise wood framed condominium apartments in certain
higher value locations. Generally, this East Fraser Valley market is price sensitive and
tends to focus on less dense forms of multi-family development such as townhomes and
low-rise wood frame strata units and less on concrete mid-rise and high-rise.
SITE ECONOMICS LTD (14-25) PAGE 4
DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
New residential product seeks to locate near quality amenities and transportation links.
As infrastructure drive demand the majority of new multi-family residential development
is occurring in South Chilliwack. Conversely, the pace of new development in North
Chilliwack has been significantly slower. The North does have attractive and important
infrastructure which simply needs updating and enhancement.
In North Chilliwack, single-family homes are the dominant housing form, however, in
Downtown Chilliwack, apartment units form the majority of the housing stock. The
subject site should clearly include a large component of stacked townhouses. These are
large, attractive housing units, which offer good value and are competitive with single
family homes. They are cost effective, with lower operating fees than condominiums,
but still have structured parking.
There is demand for well-located low rise projects and eventually there will be long term
demand for mid-rise and high-rise projects. As in most communities, multi-family
developments account for a major share of new residential product and the subject site
is a good, but not excellent, location for new residential. There are competitive multi-
family sites located just a few blocks outside the core area. Some of these sites offer all
of the urban advantages by close to the core and they are surrounded by attractive and
appealing existing residential neighbourhoods. Some of these sites which straddle
commercial and residential areas on the edge of Downtown include Victoria, College,
Chesterfield and The Former Safeway site. In addition, the university site near Airport
Road and Yale Road is surplus and a site for major new residential development, on the
southern edge of downtown. These sites offer ample infrastructure and reasonably
attractive surrounding land uses and few vacant premises.
The absolute core area including the subject site, is typically has less attractive than the
edge area as the primary land uses are often outdated and underused or under
tenanted commercial building. Some of these buildings are in need of repair or
beautification. It is generally more difficult to get short term buyer interest in less visually
appealing locations.
Community Garden Site
The core area around the subject site needs a catalyst project to spur adjacent
development. The Community Garden site across Yale Road to the north of the subject
site, added an appealing and attractive land use to the area and is acting to make the
core urban area more visually appealing. The Community Garden site itself can and
should become a major new mixed use development with retail and office on grade and
the second level with residential on above. This would be an ideal building form and it
should be strongly encouraged by the city for its own lands.
In order to reduce risk and ensure a higher chance of success it is recommended that
site development be phased starting with 1) the Community Garden with a mixed use
project, 2) stacked townhouses, a reliable and flexible, low-cost form of residential
development on the south side of the site fronting Princess Avenue. 3) The Third phase
would be built on the north side of the site and consist of mixed use low rise apartment
condominiums with a small commercial component fronting Yale Road.
SITE ECONOMICS LTD (14-25) PAGE 5
DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
STRATEGIC DEVELOPMENT PLAN
The development plan for the subject site reflects the market and site conditions, and is
summarized as follows:
Community Garden Site: Initial development by the private sector of a mixed use
project on the Community Garden site. This would generate momentum and serve to
attract interest in and more investment for the downtown area. Developers tend to follow
a trend and the first project needs to be started, often with some support. This project
could proceed in the short term with completion in 2016 or 2017.
Subject Site:
Phase 1 – South Site: Stacked townhouse with no commercial on 129 metres of
frontage by 37 metres of depth or 4,773 sq.m. (52,000 sq.ft.)
Phase 2 – North Site: Low rise over commercial on 140 metres of frontage by 72
metres of depth or 10,080 sq.m. (110,000 sq.ft.).
Phase 1 should be modest in scale and offer stacked townhouse with underground
parking, the most attractive, cost effective, flexible, and lowest risk form of
development,. In order to encourage development, there should be no commercial
component. Phase I should logically be located on the entire South Side of the property
fronting Princess Avenue. The south site development would form a strong catalyst for
the area and by improving the area and proving feasibility it would increase the chances
of success for Phase 2, to be built on the North side.
Phase 2 would front Yale Road and consist of low-rise apartment condominiums over
moderate commercial and form the core aspect site development. Any variation on
these themes can easily be understood in terms of these two basic land uses. The total
usable land area is estimated to be 162,000 sq.ft. with 10,000 sq.ft. set aside for the
lane or some other public access point as well as green space.
SITE FINANCIAL VALUE
The analysis revealed the following approximate land values. With limited demand for
multi-family residential product in the core of Downtown, land values are relatively low.
Despite this, new Downtown development is fully expected within the next few years
and demand will grow ever stronger as ever more successful revitalization continues.
The Community Garden site could be made available to developers in the very short
term to test the market. Land values would likely be only slightly lower than shown
below for the subject site.
Phase 1 on the south side of the site should be feasible by 2018, while the more
aggressive Phase 2, on the north side, may not be feasible until 2021. If revitalization of
the Downtown core continues at its current pace, absorption would be faster. If the
Community Garden site for example is a major success then the dates could be brought
forward one or even two years depending on market interest. Alternatively, if Downtown
revitalization is delayed, demand and absorption would be weaker and the project
timelines would have to be extended slightly.
SITE ECONOMICS LTD (14-25) PAGE 6
DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
In summary:
The Community Garden site should be made available to the market and sold
even if there are only a small number of interested parties. The site should not be
held off the market as its development can be a catalyst for the wider urban core
area of downtown. The financial terms may be similar to the estimates for Phase
2 of the subject site but lower as they would be discounted for a holding period.
Only placing the site on the open real estate market will determine the actual
value. It can reasonably be expected that a project on this site would be
completed in 2016.
For Phase 1, which would be completed and sold in 2018, the value per buildable
sq.ft. of land is $27 per sq.ft., and the net site land value is $1.1 million. The
timing may be slightly earlier if investment starts to flow into downtown.
For Phase 2, which would be completed and sold in 2021, the value per buildable
sq.ft. of land is $18 per sq.ft., and the net site land value is just under $4 million.
The actual value for this use is likely lower than this at the present time as this
use is not yet economically feasible. This site would develop earlier also if the
community garden site and phase 1 are successful.
Over the medium term, the entire site (Phase 1 and 2), will have a value per
buildable sq.ft. of land of $21 per sq.ft., or $4 million in total. The current value,
for multi-family, is lower due to the lack of current demand. The estimate
attempts to calculate the long term value of the site. It is reasonable to expect a
significant increase in demand and investment downtown.
SITE ECONOMICS LTD (14-25) PAGE 7
DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
1.0 SITE AND LOCATION
1.1 INTRODUCTION
The Chilliwack Economic Partners Corporation (CEPCO) is the organization responsible
for providing economic development services to the City of Chilliwack. CEPCO
commissioned this real estate report to provide both an objective market overview of
downtown Chilliwack and the optimal development strategy for the subject site, a 1.6
hectare site located at the southeast corner of Yale and Young Roads.
Downtown Chilliwack is generally comprised of the original commercial core area, which
follows the alignment of Yale Road, north of the CNR Railway Line. The area has
excellent regional and local transportation access and generally serves as a major
traffic corridor for that portion of Chilliwack north of Highway 1. The area has moderate
commercial interaction with that portion of Chilliwack south of Highway 1.
The key issue is to assess to what degree this downtown commercial district can
optimize its potential business and customer traffic. Redevelopment and a more vibrant
and attractive district requires more retail businesses which in turn requires more
customers. A primary objective is to have more urban residents in the area, and to
better serve all north-side residents, the study area is relatively large and extends over
many city blocks with a total area of approximately 16 hectares (or 40 acres). The
downtown’s main commercial intersection, known as “Five Corners,” is the centre of the
historic core area.
Background
The downtown commercial area and surrounding residential neighbourhoods were
developed early in the history of the Fraser Valley. The downtown area once played a
pivotal role in the community, largely due to its connections to major roads leading into
Vancouver, and an interurban railway system that commenced service to Chilliwack in
1910. The downtown area grew to accommodate a range of commercial land uses,
ranging from traditional street front retail to more automobile-oriented uses.
The construction of Highway 1 further to the south has led to downtown’s decline from
regional service centre, to a more local-serving commercial area. Highway 1 carries the
vast majority of both local and regional traffic through Chilliwack, but completely
bypasses the downtown area, cutting it off from the south side of the city. For drive-
through traffic, there is little evidence that a downtown exists beyond the warehouse
and industrial uses flanking the north side of the highway, giving motorists no
compelling reason to stop and visit the downtown.
Downtown’s location and access suggests that convenience shopping is the most viable
form of retail there. Modern, large-scale retailers require a location closer to the
highway, and destination type retailers would be difficult to support even if large and
attractive sites were available downtown.
SITE ECONOMICS LTD (14-25) PAGE 8
DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
In this section of the report, salient aspects of the area are outlined in terms of how it
serves its trade area population and limited traffic. The issues outlined include: location,
access, visibility, transit and planning.
The trade area is clearly focused on downtown Chilliwack itself. There is very little retail
inflow from other areas and very extensive outflow. Without extensive drive-by traffic, a
primary strategy for increasing sales is the creation of higher density residential in order
to increase the local customer base for existing retailers. The current housing market is
creating ever higher prices, making multi-family development ever more viable.
It is extremely important to note that the study area has only two significant anchor
tenants. In order to evolve, the area needs more local residents, and a selection of more
attractive and larger stores. Save-On-Foods is currently the primary anchor for
downtown. The Safeway store relocated to the south side of downtown, so it will be
able to serve a larger trade area from a larger store at a more convenient location.
In general terms, the downtown area’s original role and function has been taken over by
the South Chilliwack retail area. Downtown must refocus its role as something
complementary to South Chilliwack, offering convenience retail and services in an
attractive environment. If it is revitalized, Downtown will be well positioned to compete
effectively as a convenience retail area for north side residents. It would also be well
positioned to become a “lifestyle” choice for all area residents, if it can become a more
attractive place to shop.
This is “place making” wherein new and attractive developments provide downtown with
a renewed role and purpose, a favourable image, a distinct urban character (to
distinguish it from the suburban shopping malls), and a greater sense of community
pride. The ideal project is typically mixed use with housing, a variety of household types
(singles, couples, seniors, families); a more vibrant retail mix (more cafes, restaurants,
food retailers, art galleries, specialty shops, medical and other services); and strong
design guidelines which highlight restored buildings and make the public realm more
appealing.
1.2 LOCATION
The study area was originally situated near the geographic centre of the community of
Chilliwack. Over the past thirty years, new development to the south shifted the
residential and commercial focus to the south side of Highway 1. Despite the southward
shift in the local population base, the downtown area is still a focus of commercial
activity, even if it is no longer on the major commuter route used by all residents. It is
very clear that downtown has good local and regional transportation access.
While the downtown area is convenient, its retail trade area is moderate in size as it is
limited to the north side of the city. This creates a key weakness in that downtown has
few very large scale national chain anchor tenants capable of attracting large numbers
of customers from across the entire region.
As one of the most important commercial districts in Chilliwack, the area has the future
potential to attract a wide range of neighbourhood and community scale commercial
uses. It is very important to note that new multi-family developments would provide a
strong customer base for retail businesses and that this has been an essential element
in urban revitalization.
SITE ECONOMICS LTD (14-25) PAGE 9DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
While it has some design and infrastructure problems, and a limited range of
commercial tenants, downtown offers exciting residential and mixed-use redevelopment
opportunities. Other than its peripheral location in relation to Highway 1, all of the
economic factors are favourable, and they indicate that both public and private
investment in this urban area is warranted. In most North American municipalities which
have population and economic growth, urban core areas are being redeveloped and
revitalized.
Chilliwack offers the greatest potential if the local downtown population base is
increased through densification, the commercial district is physically upgraded, and
larger “landmark” or anchor projects are developed. It is important to emphasize that
residential development offers the strongest development potential and opportunity. The
demand for commercial of any kind is much more limited and already has ample space.
As seen in the figures below, the City of Chilliwack is located in the Fraser Valley
Regional District and is composed of 11 neighbourhoods. This includes: Chilliwack
Proper, South Chilliwack, Valley North, Valley South, Rosedale, Eastern Hillsides,
Ryder Lake, Chilliwack Mountain, Promontory, Yarrow, and Greendale. The majority of
expected future growth is expected to occur in Chilliwack Proper and South Chilliwack.
REGIONAL LOCATION
Source: FVRD
SITE ECONOMICS LTD (14-25) PAGE 10DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
CITY OF CHILLIWACK NEIGHBOURHOODS
The image below displays the site area in the context of Downtown Chilliwack. The
subject site is located in the core of the City in the Historic Five Corners and Downtown
Core. The site can be accessed through major arterials by the South from South
Chilliwack, the Northeast from Rosedale and Mount Shannon, the North from Fairfield
Island.
SITE CONTEXT
SITE ECONOMICS LTD (14-25) PAGE 11DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
Downtown Neighbourhood Profile
The Downtown neighbourhood itself has a very large residential component with a
somewhat dated commercial component. The ideal would be to increase the residential
population base downtown by adding multi-family residential development.
The downtown study area comprises approximately 25 city blocks covering about 16
hectares or 40 acres. The main commercial corridor is Yale Road which intersects with
a series of large and small streets, each with commercial activity at the intersections.
Yale Road tends to have the more traditional retail establishments such as drugstores
and supermarkets, which require busy arterial traffic to thrive. Other downtown
commercial streets have fewer convenience and consumer-oriented land uses.
The overall area consists of numerous small and medium-sized properties, a series of
small-scale multi-tenant buildings and several larger developments. In addition to retail
and service businesses, there are numerous automotive-related businesses and a
moderate amount of private office space. The most important properties are the
downtown shopping centre anchored by Save-On-Foods, the centre anchored by
Safeway and Southgate Plaza anchored by Shoppers Drug Mart.
The key reason that downtown Chilliwack developed was to serve as the major
commercial centre for the eastern Fraser Valley. It was the largest and most convenient
retail district for community residents, and for local and regional commuters and traffic.
Highway 1 has completely altered this role and function, and downtown is now a
convenience commercial area. As such, its density should be increased to support
mixed-use projects, including residential uses above grade. This has already occurred
in some parts of the study area and should be encouraged further.
General comments on the downtown commercial area are as follows:
The Yale Road section south of Five Corners has the highest traffic volumes in
the study area, and is a relatively strong commercial area. North of Yale Road,
activity lessens dramatically and some stores are vacant. This is an opportunity
for land owners to redevelop their sites to make them more attractive for tenants
by adding residential land uses above grade level.
Young Road, to the south of Five Corners, tends to be characterized by light
industrial, auto, hotel, retail and office land uses. The area has seen some new
development and is becoming more attractive. To the north on Young,
development is primarily residential.
The one block of Wellington Street west of Five Corners is clearly an excellent
commercial area, upon which the image of a reinvented downtown could be
developed. The main anchor tenants appear to include a bookstore, a bowling
establishment, some home décor shops, gift stores and two coffee shops.
The main street-front retail areas are continuous, with ample parking at the rear
of each block. This indicates a major redevelopment opportunity, as there are
many large and under-utilized land parcels. This is unusual in a mature
downtown area, and is a good indicator of strong development potential.
With the exception of the courthouse and a few mixed-use projects, existing
buildings tend to be small scale and appear dated in appearance. The area is
SITE ECONOMICS LTD (14-25) PAGE 12DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
ideal for a revitalization program, which often requires some major new
development projects to lead the way. Such developments should have strong
commercial components. It is also advised that government offices or institutional
uses would benefit downtown immensely creating demand for office space, retail
space and residential space.
Any public or private sector development which strengthens the identity of the
area is highly recommended, and may serve as enough of a catalyst as to
warrant public subsidies or other development incentives. At a minimum key sites
such as the Community Garden property should be made available to the market
and developers encouraged to proceed with reasonable municipal support and
encouragement.
The City Gate shopping centre project is located on the south side of downtown,
yet benefits the whole downtown since Safeway is a downtown retail anchor. The
Save On Foods located in the centre of downtown also generates strong demand
for retail space across the urban core.
Eagle Landing shopping centre benefits downtown retail as it brings shoppers
north of Highway 1 to visit the big chain anchor stores such as Wal-Mart.
While there is evidence downtown of ongoing streetscape enhancements and
some new development, many older buildings require considerable upgrading
(e.g., façade rehabilitation, painting and repairs, improved signage and display
windows, illumination, etc.) to establish a higher common standard for the area.
It is a concern by all business that a commercial area be free of crime and
vandalism. Steps should be taken to ensure shoppers, residents and businesses
downtown are secure.
The following map illustrates downtown with the subject site outlined in red. The
Community Garden site which is also owned by the city is located to the north on
Yale Road. If the community garden site were developed it would front Yale and
create a much stronger commercial and residential district. It would spur
development on the subject site as other developers would see evidence of
investment and growing interest from developers, residential buyers, and
commercial tenants.
SITE ECONOMICS LTD (14-25) PAGE 13DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
DOWNTOWN LOCATION
Source: City of Chilliwack Online GIS
The study area is in a transitional phase in terms of land use. The highest and best use
for the majority of the downtown area will eventually be mixed-use – i.e., similar in form
and character to newer projects along Vancouver’s commercial streets, such as Fourth
Avenue, Broadway, Main Street and Kingsway. The new form of redevelopment for
similar areas are attractive, well designed buildings with retail at grade and typically
three levels of residential above. An appealing street, lined with low-rise residential
buildings offers a suitable business environment for a wide variety of residents and
tenants, and creates a desirable “high street” retail environment. When this can be
supplemented by at least some drive-by traffic, the opportunity for strong retail sales is
considerably greater.
The challenge in creating such an environment in downtown Chilliwack is in promoting
more urban “downtown” living as a desirable housing alternative, in what is
predominantly a low-density suburban community. The dominant market for new
detached housing is young families. Apartment type housing in a convenient downtown
location may be more attractive to seniors, who want to remain in the community but no
longer wish to maintain a single-family home. However, senior households tend to have
lower disposable incomes and make fewer retail purchases than younger households,
and are perhaps less tolerant of late-night restaurants and cafes, entertainment venues
and other potential ‘nuisance’ businesses that would otherwise contribute to a thriving
high street area.
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MARKET AND DEVELOPMENT STUDY
Ultimately, new multi-family housing in downtown Chilliwack would have to cater to local
demand; this may require larger units, and a mix of apartments, ground-oriented
townhouses and other forms in order to appeal to a broader cross-section of residents.
Large Development Sites
It is important to understand the location, scale and development potential of the largest
development parcels in the study area, including vacant City-owned parking lots. The
redevelopment of these sites has the greatest potential to positively impact the area,
and their potential should be optimized. Some of the key potential development sites
are:
The Community Garden site should be developed as soon as possible. A new
mixed use building there would create a much stronger street scape on Yale and
it is directly across from the subject site. If this were to occur it would have a
major positive impact on the development potential of the subject site and
advance the expected development timelines.
Vacant parking lot sites should be developed soon. They detract from the appeal
of an urban area and make land seem less valuable than it really is.
The Former Safeway site should be developed in the near term depending on
demand and the type of developer active in the market. It is likely the increased
risk due to the large scale is hindering development.
1.3 THE SUBJECT SITE
The subject site has an irregular-shaped and is generally bounded to the North by Yale
Road, the East by private buildings which front onto Nowell Street, on the South by
Princess Avenue, and on the West by Young Road. According to the City, the total site
area is estimated to be 1.6 ha (172,200 sq.ft.). A lane bisects the site but it could be
closed and there are no major rights-of-way to adversely impact development potential.
Topography
The subject site is generally flat and ideal for real estate development. It has already
accommodated extensive development over the history of the City of Chilliwack.
Utilities / Infrastructure
All typical municipal infrastructure and services, including potable water, storm water,
sewer and sanitary sewer, hydro, natural gas, telephone, cablevision, and ambulance,
police, and fire protection are available on or near the subject site. It is not expected that
development would trigger any off-site costs as this is a mature urban area with fully
developed infrastructure.
Surrounding Developments
The site is in the heart of the downtown core and is surrounded by all forms of real
estate development, with somewhat dated buildings and underutilized properties.
Despite this, there have been several new projects nearby as well as ongoing
beautification at Five Corners, which is adjacent to the site. Surrounding developments
include:
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MARKET AND DEVELOPMENT STUDY
West – Courthouse and office building
North – Wellington Avenue shopping and Yale Road retail and Community
Garden Future Development Site.
East – Miscellaneous existing businesses and small businesses and low density
residential
South – Single-family residential, miscellaneous businesses and Salish Shopping
Centre anchored by Save-On-Foods. The newly renovated and large scale Coast
Hotel is to the South and it is becoming ever more successful.
SUBJECT SITE
Source: City of Chilliwack Online GIS
1.4 ACCESS
The downtown area has excellent local access and visibility, but is not convenient to
regional traffic. This is the main reason why downtown has declined over the years and
why the South Chilliwack commercial area, which is located right on Highway 1, has
been so successful. It is clear from past studies and a review of retail competition that
convenience commercial uses will continue to serve downtown best.
The downtown commercial area is large, spread out, and lacks a clear focus. This is
typical of most areas which unnecessarily expanded their commercial lands simply to
create more value, not because more was needed. In some instances, commercial
sites should be converted to mixed-use multi-family residential use, especially at the
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MARKET AND DEVELOPMENT STUDY
southern edge of downtown, where there are many lower value land uses such as
furniture and automotive related businesses.
Yale Road is downtown’s key link to Highway 1 and the South Chilliwack area. If the
downtown area offered a more attractive, community-oriented shopping experience, it is
sufficiently well-located to attract and serve the majority of Chilliwack residents.
Signage and Visibility
In general, exterior premise signage is one of the single most important on site
marketing efforts a business can undertake. Signs tell consumers what products and
services are available and define an important part of a stores identity. In the downtown
area, only a few stores make effective use of large scale, eye-catching signs. New
developments should use appropriate signage to optimize awareness and appeal, and
design guidelines should ensure good quality, compatible signage throughout the
downtown.
Major signs should be located on Highway 1 to indicate the presence of the historic
downtown, and how to get there. Signs should also be located at the major
interchanges, so that traffic on Vedder and Lickman Roads is encouraged to visit
downtown.
Traffic Volumes
According to the 2013 traffic counts conducted for the City, traffic volumes have been
increasing steadily on most major roads in direct response to growth. A key finding for
this study is that Yale Road, which bisects downtown, has some of the highest traffic
volumes in the city.
A typical benchmark for commercial developments is that on the order of 15,000 drive-
by vehicles per day are required to warrant a successful commercial district. Young
Street, south of downtown, has only 13,600 vehicles per day. Streets South of Highway
1 have higher average traffic volumes and are much busier commercial arterials. Traffic
volumes bisecting the subject site are as follows:
On Yale Road west of Young, traffic volumes are just under 16,000 vehicles per day.
At the subject site they are 11,000 per day, and to the East they are just under
14,000. It is clear that much traffic stops downtown and returns the way it came.
On Young Road South of the site are 13,600 per day, and North of the site of 7,300.
On First Avenue East of the site they are 11,910 per day.
The traffic volumes in downtown Chilliwack are sufficient to support a major commercial
strip along Yale Road. Commercial development should be focused on the main street
only as it is much less viable on the immediately adjacent blocks which connect to Yale
Rd. Once Yale Road reaches Five Corners, however, traffic is substantially lower, and it
becomes ever more difficult to justify new commercial space.
Typically, in a local neighbourhood of this scale, most trade area residents will live
within a five-minute drive. The conditions of successful commercial streets typically
require four lanes for traffic, with two lanes for parking. The downtown area does have
SITE ECONOMICS LTD (14-25) PAGE 17DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
traffic and sufficient street parking which creates a street-side buffer for pedestrians on
the sidewalk and enhances customer convenience.
Downtown traffic volumes are not comparable to other commercial areas where the
typical 24-hour average on successful commercial streets ranges over 20,000 vehicles.
In some instances, too much traffic can be detrimental as it creates congestion and
commuters choose not to stop unless they are forced to.
Local retail thrives when there is a large nearby population base. Significantly growing
the local population through the development of multi-family residential would greatly
reduce the dependence of local retail on drive-by traffic.
DOWNTOWN CHILLIWACK TRAFFIC VOLUMES
Changes to the Road Network
There are few major changes planned for the Chilliwack road system which would
impact the study area significantly. Highway 1 undergoes ongoing improvements and
increases in volumes. There are sufficient overpasses to ensure residents from the
south good access to downtown, which is a distinct advantage. It is expected that
eventually Airport Road will be extended west to connect to Eagle Landing, the major
retail centre in North Chilliwack This area acts like an anchor for Downtown, attracting
customers from across the east Fraser Valley.
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MARKET AND DEVELOPMENT STUDY
Parking
A cursory review of parking facilities reveals that parking is not a major issue, rather
there is categorically a surplus of on-street and off street parking. Since many
businesses provide some off-street parking, some long-term effort should be made to
add more structured on-site parking and improve directional signage to parking lots
which are just off the main roads. This is very expensive and adds to the cost of urban
versus suburban housing.
Public Transit
The current bus service connecting downtown with surrounding residential communities
and other commercial hubs is adequate. There is regular and increasingly well used
service between downtown and all areas, even those located well to the south.
Site Access
An important feature of the site access is its extensive frontage along two major
arterials: Yale Road (a historic segment of Highway 1A) is a major transportation route
and is very busy with local and Fraser Valley traffic.
Currently, there is a full movement, signalized access point from all directions. This
strategic location makes the site well suited for a variety of commercial and/or
residential land uses. While transportation infrastructure will not be expanded, access to
the site from all directions is as follows:
Access from the North - Via Yale and Young
Access from the East - Directly off Yale or Princess
Access from the West - Ashwell, Wolfe Road and Hodgins all provide access into
the core and subject site
Access from the South - Young Road is an excellent north-south arterial road
extending much of the length of Chilliwack and connecting across Highway 1 via
the Airport. Also, crossing Highway 1 via Yale brings all area residents directly
downtown
The following is a map of Downtown Chilliwack by road type displaying the connectivity
of the subject site with the surrounding region of Chilliwack. Young Road is the only
major arterial road leading to the subject site from the South. Yale Road is a minor
arterial leading to the subject site from the North East. Princess road features a bicycle
greenway, offering sustainable transportation options to and from the subject site.
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MARKET AND DEVELOPMENT STUDY
DOWNTOWN ACCESS PLAN BY ROAD TYPE
1.5 LAND USE REGULATIONS
The following is an overview of the relevant local and regional land use regulations and
policies that apply to the subject site.
Regulations
The site is located within the City of Chilliwack and the Fraser Valley Regional District,
and is subject to the following plans and bylaws:
Fraser Valley Regional Growth Strategy
City of Chilliwack Official Community Plan and Downtown Plan, and associated
development permit guidelines
City of Chilliwack Zoning Bylaw
City of Chilliwack subdivision process for consolidation or creation of parcels
Fraser Valley Regional Growth Strategy
The 2004 Fraser Valley Regional Growth Strategy (RGS), “Choices for our Future,”
guides planning and development for the Fraser Valley region. Its objective is to
concentrate ground in established urban areas, and it strongly supports adding density
to infill urban areas.
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MARKET AND DEVELOPMENT STUDY
City of Chilliwack Official Community Plan
The City of Chilliwack OCP includes different area plans providing for land use
designations and policies for specific neighbourhoods. As seen in the Downtown Plan,
the entire subject site is designated UQ or Urban Quarter.
OFFICIAL COMMUNITY PLAN / DOWNTOWN PLAN DESIGNATIONS
Source: City of Chilliwack Online GIS
City of Chilliwack Downtown Land Use Plan
This plan gives clear direction with regards to land use, housing, commercial and
economic vitality, public open spaces, community facilities and programs,
transportation, infrastructure, and the form and character of public and private realm
development. The overall purpose of this plan is to encourage more cohesive and
compatible development patterns in the downtown that support overall community wide
sustainability and livability and that are responsive to growth patterns in the wider
community and region. The Plan also includes guidance for several other areas
downtown, including:
Wellington Avenue and Mill Street is one of the city’s retail high streets. It plays a
key role in the overall identity of the downtown and is the focus of more intense
land use activity. This sort of street should receive the highest level of public
realm amenities in the downtown including special paving details, street trees
(where possible), street furniture, and other pedestrian amenities. It has enjoyed
significant improvement and the heritage buildings are being put to good use.
Yale Road East is lined with a mix of large and small format retail, offices,
restaurants and other commercial uses. On-street parking is encouraged at off-
peak hours. This street also has high frequency transit service, bike lanes, and
high pedestrian volumes, and remains a high priority for public realm amenities.
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MARKET AND DEVELOPMENT STUDY
Development at gateways such as Five Corners should contribute to the sense of
entry and level of importance through signature architecture, appropriate building
scale, character, and orientation. Right-of-way features such as landscaping,
public art, landmarks or special signage, lighting or paving may be used to help
signify these areas.
The following explains the relevant Downtown Chilliwack Land Use Plan. The subject
site is located within the urban quarter of the commercial mixed-use section of
downtown (displayed in red on the map). The intent of this region is to create a high
density, vibrant, pedestrian friendly downtown core with a mix of housing, jobs, regional
services, and recreational opportunities that create activity during the day and evening.
This region is focused towards appropriately spaced, mixed-use buildings ranging from
5-18 storeys in height. Mixed-use buildings incorporate active retail uses (shops, cafes,
restaurants, etc.) fronting onto traditional retail and commercial streets as well as
community corners. Incorporation of ground-oriented townhouses are encouraged along
adjacent residential side streets
Appropriate building types in this region include:
Point tower and podium (slender apartment tower coming out of structured parking
base wrapped with townhouses and/or commercial uses along public streets)
Mid-rise terrace buildings (buildings that step back from the street)
Additionally, downtown single family (displayed in yellow), townhouses (displayed in
orange), and apartments (displayed in beige) make up the majority of land uses in the
area.
DOWNTOWN CHILLIWACK LAND USE PLAN
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MARKET AND DEVELOPMENT STUDY
Zoning
The following figure shows the municipal zoning on and surrounding the site. Majority of
site is zoned C3 – Town Centre Zone, with the southern portion of site (parking lot
between Empress Lane and Princess Avenue) largely zoned R2 – Urban Residential
Transition. C3 zoning designates the central business district of the former City of
Chilliwack permitting virtually all forms of commercial development. R2 zoning is
transitional and new duplex or multi-family units cannot be built here. It is typically used
to support character homes. A reasonable request for rezoning which is in conformance
of the Downtown Plan would be heard and carefully considered.
SITE AND AREA ZONING
Source: City of Chilliwack Online GIS
Subdivision / Consolidation
Subdivision is likely required to consolidate properties into optimally sized and efficient
development blocks. Each sub-site could accommodate similar or slightly different
residential and retail land uses. A large or significant amount of private office space is
not recommended. This may be possible for an end user or government department but
a private for lease, multi-tenant office building would not be feasible. One of the main
reasons for subdivision is to permit the development to be phased. The size, 1.6 ha,
indicates that this would likely be a two-phase project. In terms of development
marketing, it is important that the first phase transform much of the site, and that each
SITE ECONOMICS LTD (14-25) PAGE 23DOWNTOWN CHILLIWACK
MARKET AND DEVELOPMENT STUDY
phase not be too small. Scale ensures buyers and sellers of commitment to improve the
area and complete the total development.
If the site is bisected into north and south parcels, the southern parcel would comprise
approximately one third and the northern parcel would comprise two thirds of the land
area.
1.6 POTENTIAL LAND USES
One of the principal objectives of this study is to describe a suitable land use and
development plan for the subject site.
The subject site's location enjoys excellent local and regional access facilitated by
frontage on two major arterial roads as well as by fully-signalized intersections on every
corner. The site also provides mountain views for multi-level buildings. The site does
have challenges, however, namely vacant commercial spaces and empty lots, both of
which detract from the viability of the area.
Considering the strategic location and accessibility of the site, a range of uses could be
suitable. The proposed project should address market needs while responding
effectively to the site’s physical characteristics. This can be done through the
development of several complementary uses, specifically residential with retail at grade.
A small office component may also be possible.
An appropriate land use strategy provides an objective overview of the highest and best
use of the subject site, with the main considerations being:
The site provides an appealing and convenient location, with very good access to
major thoroughfares and public transportation.
The range of potential land uses includes different forms of residential.
The lands are too small and too far away from the Highway to support large-format
retail, but a larger residential population on site would provide a potential market for
local street front retail.
The lands are too remote for significant office space and the sites are too small for
significant retail space. As such, any form of commercial would be very moderate.
Thus, the development plan for the subject site reflects the market and site conditions,
and is summarized as follows:
Phase 1 – South Site: Stacked townhouse with no commercial on 129 metres of
frontage by 37 metres of depth or 4,773 sq.m. (52,000 sq.ft.)
Phase 2 – North Site: Low rise over commercial on 140 metres of frontage by 72
metres of depth or 10,080 sq.m. (110,000 sq.ft.).
Phase 1 should be modest in scale and offer stacked townhouse with underground
parking, the most attractive, cost effective, flexible, and lowest risk form of
development,. In order to encourage development, there should be no commercial
component. Phase I should logically be located on the entire South Side of the property
fronting Princess Avenue. The South site development would form a catalyst for the
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