Central Waterfront – North Vancouver, BC Recommended Retail Strategy – September, 2013

Accelerating success.

Report Outline

Executive Summary ……………………………………………………………………. 3 A. Retail Market Overview ……………………………………………………………. 10 B. Competitive Retail Supply ….………………………………………………...…… 13 C. Trade Area Demographic Analysis ..……………………………………………... 27 D. Trade Area Demand Analysis .……………………………………………………. 39 E. Case Study Benchmarks ………………………………………………………..... 43 F. Building on Best Practices……………………..………………………………….. 61 G. Evaluating Potential Locations….………………………………………………… 67

H. Recommendations for Success……………………………………………...…… 77

I. Recommended Tenant Mix By Location ………………………………………… 79

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Executive Summary

Central Waterfront Area Retail Strategy Objectives Colliers International Consulting was engaged by the City of North Vancouver to develop a retail and tenant mix strategy which would strike an optimal balance in terms of generating both social and economic value within its Central Waterfront Area (CWA). The Central Waterfront Area Retail Strategy work program included the following core elements:

• Reviews of relevant commercial market activity (to place the CWA in its larger commercial market context)

• Assessment of competitive supply (to determine potential merchandising gaps appropriate for the CWA)

• Delineation of an appropriate retail-commercial trade area (to determine the CWA’s area of geographic influence)

• Analysis of trade area demographic data (to identify key changes in social composition and to provide inputs for demand analysis)

• Analysis of commercial demand (to quantify the extent of future on-site sales volume and floor area support)

• Identification and review of case study benchmarks (to draw lessons and ideas)

• Review of best practices in waterfront development (to provide a framework for optimal retail-commercial programming) The work program also includes a review and recommended commercial uses for each of the following important Central Waterfront buildings and areas:

• Historic PGE Railway building (1,178 sf potential retail-commercial area in potentially relocated/repurposed building)

• Presentation House Gallery Media Centre (4,000 to 5,000 sf potential retail-commercial area – new building)

• Coppersmith Shop – Lot 3 (8,525 sf of potential retail-commercial area in refurbished building)

• Pipe Shop – Lot 4 (8,981 sf of potential retail-commercial area in refurbished building)

• Lot 5 (Vacant parcel which, under current zoning, offers potential for up to 63,380 sf of mixed-use commercial floor area)

• Burrard Dry Dock Pier (subject of City-led business case, potential adaptive re-use of electrical building for seasonal commercial use)

3

Executive Summary

Guiding Principles – Best Practices in Waterfront Planning While optimizing the City of North Vancouver’s potential commercial revenue generation for key CWA areas is a key objective, Colliers recognizes that such a prominent and important waterfront area must also be envisioned as the city’s premier social gathering place – not only for residents of North Vancouver, but also for visitors throughout the region and tourists. For this reason, the following principles were identified in order to establish a more balanced framework for determining a preferred CWA retail strategy. The presented matrix was then used as a tool to assist in the evaluation of potential uses for each key area/building within the CWA study area.

Waterfront Planning Principles North Vancouver Central Waterfront Area Adapted Waterfront Planning Principle Support Matrix 1. Surrounding buildings enhance public space. Support For Principle 2. Limits are placed on residential development. (Downtown) Waterfront District Planning Principle Weak (1) Fair (2) Strong (3) 3. Activities are 24-hour and year-round. Generates 24-hour activity, including activities after 6PM Offers Year-round, weather-protected activity 4. Flexible design fosters adaptability. Showcases local identity (History/culture/arts/music) 5. Creative amenities boost enjoyment for all. Leverages water as centerpiece for programming/activities 6. Access is facilitated by boat, bike, or on foot. Flexible design fosters adaptability Generates regular visits from broad array of local residents 7. Local identity is showcased. (inclusive rather than exclusive) Building(s) enhance public space, boost surrounding activity with 8. The water itself draws attention/is a primary focus. mix of uses, indoor/outdoor activity

9. Iconic building serve a variety of functions. Iconic buildings serve multiple functions. Generates significant City revenues 10. Good management maintains community vision. Generates regular patronage from broad array of regional tourists/daytrippers/visitors New development fits within the community's larger vision, leveraging and complementing exisitng amenities and uses to create a more appealing whole.

Differentiates the larger place from other competing destinations TOTAL SCORE & % of MAXIMUM SCORE OF 36 # X% 4 Executive Summary

Building on Existing Cluster of CWA Amenities A core facet of Colliers’ retail strategy approach was to fully recognize the social and economic value of existing assets and activity generators and to evolve a retail program that will enhance and complement these existing business by building critical mass in key categories deemed to be either under-represented or having significant growth potential. Beyond the area’s existing and future residential development, as well as the successful Pinnacle Hotel at the Pier , the following existing commercial assets were deemed to be vital building blocks to the development of an optimal retail strategy for identified CWA buildings and areas:

• Lonsdale Quay Market – a popular year-round market that generates significant annual visitor volumes and a host of successful retail, restaurant and service establishments

• Lower Lonsdale Restaurant Row – a cluster of popular local restaurants, including Gusto Di Quattro, Burgoo Bistro, The District, Anatoli Souvlaki and Raglands; Pier 7 is the area’s newest restaurant, taking full advantage of its waterfront location.

5 Executive Summary

Central Waterfront Area Retail Opportunities The Central Waterfront Area, by virtue of both its waterfront location and range of local amenities, offers a range of opportunities:

• Leverage and build on existing activity generators – including Lonsdale Quay Market (which can act as a “shadow anchor” for planned commercial facilities in other CWA buildings and areas under review) and Lower Lonsdale’s “Restaurant Row”

• Become a vital, active destination and/or stop on The Spirit Trail – with opportunities to support recreation-driven retail-commercial uses that enhance residents’ and visitors’ enjoyment of this important public asset

• Prime waterfront location with southern exposure – a natural public gathering place with significant untapped potential for public events throughout the day and evening hours and throughout the year

• Strong multi-modal access characteristics (SeaBus, bus, car, bike, on foot)

• Existing programming and public art – increasingly popular farmers’ market, Shipyards Night Market

• Surrounding residential and hotel uses will ensure some degree of consistent year-round pedestrian/potential shopper activity

Central Waterfront Area Retail Challenges From a retail-commercial perspective, the CWA does present several key challenges, which will need to be addressed in order to ensure successful operation of future establishments,. Including: • Limited on-site parking – a challenge which could be fully addressed with the introduction of underground parking capacity beneath future development on Lot 5 • Limited site visibility for public transit users – which could be significantly mitigated or solved through introduction of a first-class signage and wayfinding system for the Central Waterfront Area • Lack of exposure to regular automobile traffic – future retail & restaurant facilities will, relative to more traditionally auto-oriented retail locations, have to rely more on word-of-mouth, regular programming and wayfinding to generate sufficient year-round patronage. The CWA’s destination status as a preferred social gathering place will go a long way to mitigating this challenge.

6 Executive Summary

Retail-Commercial Trade Area Delineation Colliers has defined the CWA trade area to encompass a geographic area from within which the vast majority – 75% -- of future on-site spending will be generated. The remaining 25% of spending will be generated from regional residents, day-trip and overnight visitors.

7 Executive Summary

Demand Analysis Implications – Summary of Warranted Commercial Floor Area Colliers review of the site from a retail market perspective, along with general retail market conditions, competitive supply clusters and demographic characteristics, resulted in a clear merchandising gap which can be met with existing and planned Central Waterfront Area commercial facilities: a waterfront restaurant recreation district. The results of Collier’s demand analysis for additional restaurant food & beverage facilities in the CWA is summarized below and shows support – at high levels of sales productivity (sales per sf) – for between 13,000 and 15,000 sf of related floor area over the next decade, with latent (existing) demand for at least 9,000 sf.

Beyond recreation-oriented retail which can actively leverage the Central Waterfront’s outdoor public space elements, including the future Spirit Trail, Colliers views a cluster of new, complementary restaurant food & beverage uses as an optimal means of generating interest and patronage from the broadest possible resident and visitor base.

Waterfront dining opportunities are highly valued throughout the Metro Vancouver region, and are primarily available at the current time only at the ‘far ends’ of the North Shore (e.g. Horseshoe Bay and Deep Cove). The central location of the Central Waterfront Area therefore provides opportunity to draw on the more densely population central North Shore, as well as attracting regional and tourist traffic from downtown Vancouver via the Seabus.

8 Executive Summary

Recommended Retail Strategy Colliers’ recommended retail strategy for the Central Waterfront Area is presented in the following augmented aerial image. This strategy fully complements the Lonsdale Quay Market and couples warranted new restaurant food & beverage uses with recreation-oriented uses that will best leverage the CWA’s waterfront location and access to the Spirit Trail. This recommended retail mix will also serve to activate the various public open spaces throughout the Central Waterfront, including the Foot of Lonsdale, Shipbuilder’s Square, Lot 5 and the Burrard Dry Dock Pier, from day to night and throughout the calendar year.

9 A. Retail Market Overview

Overview The revitalization of the Marine Drive and Lonsdale corridors are two drivers behind the recent resurgence of North Vancouver’s retail market. The area east of Capilano Mall has experienced a transformational shift towards a new community feel over the past 3 - 5 years with developers building mixed-use residential and retail projects. Major brands such as Thrifty Foods, PriceSmart Foods, CIBC, Royal Bank, Coast Capital Savings Credit Union, Golf Town, and Bed, Bath & Beyond have taken notice of the transformation and have helped to create a more livable and traditional retail-amenity rich area for local residents.

Although Qualex-Landmark’s mixed-use project, District Crossing, captured record-setting strata prices for its ground-floor retail space, there is a significant amount of immediate/short-term oversupply along Marine Drive. In addition to Onni’s mixed-use project “The Drive”, there are 3-4 other at-grade retail projects along the corridor that are struggling to find interested tenants. The slow absorption of this space is primarily attributable to the large amount of supply brought to the market simultaneously. Moreover, Marine Drive’s retail is transitioning from traditional neighbourhood centres with at-grade parking to storefront retail with underground parking. Storefront retail is reliant on walk- by traffic; however, Marine is still transitioning from a car-oriented, arterial road to a pedestrian environment.

Market Forecast

Demand for retail product is expected to continue in Metro Vancouver, due to the growing population, limited amount of land supply available and the proven track record of increasing property values. In addition, many economists have forecasted interest rates to remain stagnant through 2014, giving investors continued incentive. Developers will likely continue to stratify retail projects in non-key areas where leasing has been difficult, allowing them to sell off the product to investors or owner/operators, rather than lease.

10 Capilano Square 845 Marine Drive The Drive A. Retail Market Overview

Lease Rates The North Shore retail submarket currently has 8 unenclosed food anchored shopping centres over 50,000 sf tracked by Colliers. The two graphs below illustrate the change in North Shore lease rates for these centres over the past 5 years.

$80 $35 $70 $30 $60 $25 $50 $20 $40 $15 $30 $20 $10 $10 $5 $- $- 2007 2008 2009 2010 2011 2012 Q2 2007 2008 2009 2010 2011 2012 Q2 Source: Colliers International Source: Colliers International

The CRU rate range has widened over the years, with the The Anchor rate range has also widened, and increased upper bound increasing by $40. It is currently at $24 – 75. equally on both the upper and lower bound by $5. At $10, the Within the Metro Vancouver Market, only Vancouver has higher lower bound is higher than Richmond and Burnaby / New lease rates. Westminster at $6 and $7.5 respectively. With a range of $15 - $28 Vancouver has the highest anchor rate range in the Metro region.

11 A. Retail Market Overview

Vacancy The North Shore retail submarket currently has 17,224 sf of vacant1 retail space in food anchored shopping centres – an average vacancy rate of 1.8%. This is a relatively low vacancy rate when compared to other markets outside the City of Vancouver, including Richmond (6.2%), Burnaby / New Westminster (4.0%) and Surrey (3.1%). The graph below illustrates vacancy over the past 5 years.

20,000 2.5% 18,000 17,224 16,000 2.0% 1.8%

14,000

12,000 1.5% 10,000 Vacant Space (SF) 8,000 1.0% Vacancy (%) 6,000

4,000 0.5% 2,000

- 0.0% 2007 2008 2009 2010 2011 2012 Q2

1The vacancy discussed only includes centres anchored by retail food stores.

Source: Colliers International

12 B. Competitive Retail Supply

Competitive Retail District Map

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Marine Drive Lonsdale Quay Market Lower Lonsdale & Central Lonsdale 13 Esplanade Avenues B. Competitive Retail Supply

Competitive Retail Districts A retail site’s competitive market context is a strong determinant of its optimal market position – the mix and price point to best fill current and future merchandise and service gaps for its target audience. Thus, to identify an optimal scale and mix of retail for the Central Waterfront Area (CWA), it is necessary to analyze the market position and merchandise mix of other centres and retail nodes that will compete with the area for market segment spending. The primary value of this competitive retail review is to determine the range and quality of existing competitive uses and clusters and to identify potential merchandising gaps which may be filled within the CWA.

As illustrated by the map on the preceding page, there are 3 primary retail nodes that will exert a competitive influence on the CWA trade area and its ability to support future retail development. These areas and the major nodes or centres comprising them are profiled on the following pages.

Marine Drive: Pemberton Lonsdale Quay Lower Lonsdale & Esplanade 14 to Fell Avenue Avenues B. Competitive Retail Supply

Marine Drive: Pemberton Ave to Fell Ave

Context Marine Drive between Hamilton and Fell Avenues comprises approximately 900,000 sf of retail floor area spread across 7 main centres. Besides Capilano Mall and 845 Marine which contain larger format, comparison retail anchors, the centres are predominantly convenience- oriented, with ancillary service-commercial and food and beverage (F&B) functions.

Major Centres 1. Pemberton Plaza • A 95,000 sf strip centre anchored by Save-on-Foods, located at the northwest corner of Pemberton and Marine.

2. Marine Plaza • A 43,000 sf strip centre anchored by Future Shop and Mark’s, located on the north side of Marine, east of Pemberton Plaza.

3. Taylor’s Crossing • A 45,000 sf project at Marine Dr and Mackay Ave anchored by Indigo Books. Previously, the centre was home to the Taylor’s Crossing brewpub, but in late 2011 the pub closed, leaving a significant market void in the area.

4. Capilano Mall • With a GLA of over 400,000 sf, Cap Mall is North Van’s only enclosed mall and the City’s largest retail centre. Anchored by Sears and Walmart, the centre is mid- market with a large portion of convenience and general merchandise floor area.

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B. Competitive Retail Supply

Marine Drive: Pemberton Ave to Fell Ave

Major Centres Continued 5. Capilano Square • A 100,000 sf strip centre adjacent to Capilano Mall. Like Marine Dr as a whole, the centre is predominantly convenience and F&B. PriceSmart Foods and Shoppers Drug Mart anchor the centre and 3 retail pads front Marine Dr: CIBC, Royal Bank and a recently opened Swiss Chalet.

6. 845 Marine Drive • The 90,000 sf centre is anchored by the only Bed Bath & Beyond, Thrifty Foods and Golf Town on the North Shore. The large format anchors provide the centre with a regional draw.

7. Capilano Village • A dated, 33,000 sf strip centre at the corner of Marine Drive and Fell. The centre’s strongest features are its adjacencies to 845 Marine and Capilano Square.

Implications for the Central Waterfront Area While the retail offering along Marine Drive between Pemberton and Fell has expanded and vastly improved in the past 4 years, both its role and format are disparate from the Central Waterfront Area’s optimal positioning. The myriad of retail floor area on Marine Drive fulfills a primarily convenience function with several grocery anchors and branded F&B operators. While Capilano Mall and 845 Marine have regional draw on the strength of their anchors, the area lacks an experiential component. Fundamentally, it is an arterial road-oriented chore shopping destination. Marine Dr is undoubtedly a strong convenience node in terms of scale and offering; however, the CWA will fulfill a fundamentally different function and will not compete directly with Marine. 16

B. Competitive Retail Supply

Lonsdale Quay Market The Lonsdale Quay Market is a vital local retail-commercial asset which will continue to serve as a complementary shadow anchor to both existing and planned facilities throughout the CWA. Colliers’ recommended retail strategy is one that builds on this popular dining and shopping destination.

Context Of the three identified competitive retail districts, Lonsdale Quay Market has the strongest influence on the market positioning of the Central Waterfront Area. The 90,000 sf indoor public marketplace is located on the waterfront at the foot of Lonsdale Ave, directly west of the Central Waterfront. “The Quay” is also a multi-modal transit hub, serving as both the northern terminal for the SeaBus from downtown Vancouver and a major bus terminal for routes serving the entire North Shore.

Like most public market-style retail, smaller inline tenants occupy the majority of floorspace and food retailers dominate the mix. Kin’s Farm Market, Cobs Breads and the chain Italian restaurant Eastside Mario’s are currently Lonsdale Quay Market’s only anchor tenants.

Merchandise Mix Lonsdale Quay’s estimated Tenant Mix is food-oriented, consisting of:

•Apparel: 10% • Leisure: 2% •Food: 41% • Service: 10% •General Merchandise: 9% • Non Retail: 1% •Home: 2% 17

B. Competitive Retail Supply

Lonsdale Quay Market

Positioning Implications for the Central Waterfront Area The opportunity for synergies between Lonsdale Quay and the CWA are numerous. The Quay is a local and tourist serving retail destination, accessible by multiple modes of transit that generate significant foot traffic to the waterfront. While the Quay has an extensive selection of specialty food and quick serve restaurants that are unique to the North Shore, the Market lacks the water- oriented destination restaurants present at similar public market anchored waterfront retail districts like Granville Island and Pike Place in Seattle. Moreover, the majority of retail uses at the Quay are diurnal and by definition do not generate evening traffic.

The dearth of full service restaurants provides an opportunity for the CWA to compliment the Quay’s existing offering. While Pier 7 has done this to an extent, the Central Waterfront Area has the opportunity to intensify this use and create a critical mass of destination restaurants. The Quay offers some outdoor programming in the summer; however, the Market is intrinsically indoor-oriented. The Central Waterfront Area can build on the success of Lonsdale Quay by establishing the indoor-outdoor duality that characterizes many world-class waterfront retail and cultural districts, particularly in locations with seasonality issues. CIC is of the opinion that Lonsdale Quay and the Central Waterfront Area should be seen as a collective district, complementing each other’s strengths and increasing the destination draw of North Vancouver’s waterfront. The CWA can build on the success of the Lonsdale Quay by establishing three fundamentals: a critical mass of destination restaurants, evening traffic generation and an outdoor gathering and recreation-supporting component. 18

B. Competitive Retail Supply

Lower Lonsdale & West Esplanade Avenue

Context Spanning from the foot of Lonsdale Ave to 2nd St, Lower Lonsdale continues to develop as one of North Vancouver’s most vibrant and eclectic neighbourhoods. The area’s retail positioning is primarily as an F&B destination, with a row of restaurants clustered on the west side of the street between Carrie Cates Ct and Esplanade. While restaurants and independent retail boutiques continue to occupy at-grade space between Esplanade and Keith Rd, the tenancies north of 2nd are too diffuse to give the area a strong retail identity.

West Esplanade Ave between Mahon and Lonsdale Ave is not characterized by a prevailing retail identity. The diverse array of retail and service commercial tenants occupying this stretch include local-serving convenience tenants such as IGA, BC Liquor Store and Shoppers Drug Mart, full-service restaurants and grab and go food tenants/coffee shops. Restaurants include Sailor Hagar’s Brew Pub, occupying a strong 2nd-story location with views of downtown Vancouver, Boston Pizza and Thai House North Vancouver. The Empire Theatres at the corner of Esplanade and Chesterfield is one of only two multi-screen cinemas on the North Shore. As such, it provides the area with a regional entertainment draw in an otherwise local-serving setting.

The Lower Lonsdale/Esplanade Ave area also features two prominent redevelopment sites: 260 Esplanade W/255 W 1st and 119 Esplanade W. Both of these sites have been purchased by Polygon and while plans for the sites have not been determined, there is a strong possibility that redevelopment plans will include retail/commercial fronting Esplanade. 19

B. Competitive Retail Supply

Lower Lonsdale & Esplanade Avenue

Implications for the Central Waterfront Area The downward slope of Lonsdale Ave towards the water creates a natural connection between the Lower Lonsdale “restaurant row” and the Central Waterfront Area. While the slope may deter foot traffic from walking north of Esplanade from the Central Waterfront, the proximity of the “restaurant row” is conducive to pedestrian cross-shopping between the restaurants and CWA. Currently, the “restaurant row” exists as an island, lacking connectivity to the north or south. If executed effectively, there is the opportunity for the CWA to become a natural extension of Lonsdale Ave. While Pier 7 is a strong asset to the CWA as a water-oriented destination, the restaurants lacks connectivity with Lonsdale. CIC is of the opinion that given their Lonsdale frontage and proximity to the existing “restaurant row” Buildings 3 & 4 are particularly well-suited for destination restaurant tenancies.

Like Yaletown, Gastown and 4th Avenue in Vancouver demonstrate, restaurants can mutually benefit from colocation. Several restaurants in close proximity can create the critical mass necessary for the collective to become a regional destination, drawing from a much larger consumer trade area than could be generated by a limited number of restaurants. Accordingly, Colliers believes that restaurants in the CWA will benefit the existing establishments in “restaurant row”, not cannibalize their sales.

The retail along Esplanade W does not interact with the Central Waterfront Area to the same extent that Lower Lonsdale does. While Esplanade will not be a strong competitor, there are also not the same opportunities for synergy. 20

B. Competitive Retail Supply

Central Lonsdale

Context The retail offering on Lonsdale Ave between 13th and 23rd Street is currently an amalgam of convenience retailers, ethnic restaurants and casual/fast food chains, service commercial/medical uses and a limited number of comparison tenants.

However, with the recent approval of the Onni Group’s development application for 1308 Lonsdale and Anthem Properties’ Local project at 17th and Lonsdale nearing completion, the retail identity of the corridor is changing rapidly.

Implications for the Central Waterfront Area Onni’s project at 1308 Lonsdale will add approximately 170,000 sf of retail to the Central Lonsdale supply. In additional to a 40,000 sf grocery store, renderings show 2nd story destination restaurant space and significant CRU space at grade. Currently Central Lonsdale is not a strong competitor for the CWA; however Onni’s project will be targeting similar destination restaurant tenants and as such, the Central Waterfront Area should begin actively seeking tenants in the near future. 21

B. Competitive Retail Supply

Destination Restaurant & Cluster Map

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1 2

6

3

Map # Restaurant/Cluster 1 Park Royal 2 Earls 3 Cactus Club North Van 4 Esplanade West 4 5 Lower Lonsdale 6 Central Lonsdale 5 7 Edgemont Village

22 B. Competitive Retail Supply

Restaurant Cluster Profiles

Overview CIC’s analysis of the Central Waterfront’s 3 primary competitive retail districts indicates an opportunity for the CWA to become a regional restaurant destination. As such, CIC has undertaken a more in-depth, qualitative analysis of existing standalone and destination restaurant clusters on the North Shore and their corresponding influence on the competitive Food & Beverage landscape. The map on the preceding page illustrates the location of these restaurants and clusters between Park Royal and Park and Tilford.

1. Park Royal • In terms of total floor area, Park Royal contains the largest concentration of full- service and quick serve destination restaurants on the North Shore. Tenants include: Cactus Club Café, The Village Taphouse, The Keg, Milestones, Pink Berry and Five Guys Burgers and Fries. While the strength of this tenant roster and its brand recognition are undeniable, chain restaurants at a regional mall are not a direct competitor to what is envisioned for the CWA.

2. Earls • Earls Tin Palace is an institution on the North Shore and its location on Marine between the Lions Gate Bridge and Capilano Rd is at a strategic point of access and egress to North Vancouver. Although Earls is a strong brand, the stand-alone restaurant will not exert a significant influence on restaurant tenants at the CWA.

3. Cactus Club North Vancouver • Like Earls, the original Cactus Club on Pemberton Ave is a strong brand. However, it is situated in an insular location and will not affect the Central Waterfront. 23

B. Competitive Retail Supply

Restaurant Cluster Profiles

4) West Esplanade • There are four destination restaurants on W. Esplanade between Semisch and Lonsdale Ave: Thai House Bistro, Sailor Hagar’s Brew Pub and Boston Pizza. While these restaurants are individually popular, they are not concentrated enough to define the area as a cohesive dining destination. Further, while Sailor Hagar’s occupies a 2nd storey space with views of Burrard Inlet, none of the restaurants on Esplanade are water-oriented.

5. Lower Lonsdale • Gusto Di Quattro, Burgoo Bistro, The District, Anatoli Souvlaki and Raglands between Carrie Cates Ct and W Esplanade form North Vancouver’s strongest contiguous restaurant cluster. Further north on Lonsdale, restaurant tenants include Fishworks, Jagerhof and Sushi Bella. South of the “restaurant row”, Pier 7 occupies a strong location on the waterfront and is currently North Vancouver’s only true waterfront destination restaurant. As previously mentioned in this section, there is the opportunity for the Central Waterfront to build on the strength of Lower Lonsdale and Pier 7, increase the connectivity between the “restaurant row” and the CWA and establish the area as an important north shore dining destination.

6. Central Lonsdale • While restaurant tenancies in the 10 block stretch between 13th and 23rd are diffuse, they are numerous enough to warrant discussion. Central Lonsdale’s restaurants are a disjointed array of ethnic restaurants and casual/fast food chains with prominent tenants including Brown’s Social House and Cazba, a popular Persian restaurant west of Lonsdale on 16th. While individual restaurants on Lonsdale are popular, as a whole, the area is not a cohesive dining destination. 24

B. Competitive Retail Supply

Restaurant Cluster Profiles

7. Edgemont Village • The function of the outdoor village is primarily as a neighbourhood-serving convenience node; however, Edgemont Village has a limited selection of restaurants and cafes that are popular throughout the North Shore. The Bakehouse, Canyon, La Galleria and Nobu Sushi are popular establishments that draw customers from beyond the immediate residential neighbourhood.

Implications for the Central Waterfront Area The preceding analysis of restaurants and restaurant clusters between Park Royal and Lonsdale Ave demonstrates a lack of dining destinations on the North Shore that would compete directly with restaurant tenants in the Central Waterfront Area. While Park Royal’s restaurants, Earls and the North Vancouver Cactus Club are strong brands, they are suburban, casual fine dining chains and are not located on the waterfront. The West Esplanade and Central Lonsdale districts both have strong individual restaurant tenants, but lack the concentration necessary to be considered true regional restaurant destinations. As a local-serving retail village, Edgemont Village’s restaurants are ancillary to its convenience and service-commercial function. The strongest cluster of restaurants is Lower Lonsdale’s “restaurant row”; however, these are not seen as a competitive threat. Conversely, the existing restaurants present an opportunity for the Central Waterfront to create a dining destination that extends from Esplanade to Pier 7.

The lack of dining destinations, particularly of water-oriented restaurants, is a market opportunity for the Central Waterfront Area to build on the success of Lower Lonsdale and Pier 7 to become a peerless restaurant district on the North Shore. 25

B. Competitive Retail Supply

RETAIL FOOD STORE COMPETITIVE MAP 9

Map # Retail Food Store

8 1 Whole Foods 2 Extra Foods 3 Osaka Supermarket 4 Save On Foods 1 2 5 Kin's Farm Market

3 4 6 PriceSmart Foods 7 Thrifty Foods 10 8 Safeway 5 6 9 Queensdale Market 7 11 10 Loblaws (Fall 2013) 11 Safeway 12 Marketplace IGA 13 Kin's Farm Market 14 Save-on-Foods

128 139 N 14

Retail Food Store Inventory The map above illustrates retail foods stores on the North Shore between Park Royal and Park & Tilford shopping centres. With 11 grocery stores, 2 Kin’s Farm Markets and a 43,000 sf Loblaws slated to open in October 2013 at Anthem Properties’ Local project at 17th and Lonsdale, there are an abundance of retail foods stores within a 10 minute drive of the Central Waterfront Area. The map reinforces that a retail food store would not be an appropriate tenant for the Central Waterfront Area. Any convenience tenants should complement the Lonsdale Quay as a specialty food destination. This review is important as it shows that retail food facilities are well supplied in the area and that significant additional retail food facilities (beyond boutique-scaled specialty foods) are not likely to be supported on-site. 26

C. Trade Area Demographic Analysis

Demographic Shifts – City of North Vancouver (2001 to present)

If the Central Waterfront area is to truly evolve as the City of North Vancouver’s preferred social gathering place for the community as a whole, it is essential that its planned retail/commercial service amenities meet the needs and wants of an increasingly diverse and vibrant community. Colliers examined demographic shifts over the last decade or more, and noted some interesting and important changes. These include: an increase in home ownership which relates to growing incomes and an increase in quality residential alternatives to the single family home; and a big jump in the proportion of university-educated residents, which references North Vancouver’s appeal as a choice of residence for young, active and educated home buyers.

27 C. Trade Area Demographic Analysis

Demographic Shifts – City of North Vancouver (2001 to present)

Other important demographic shifts, which Colliers sees as being highly beneficial for the evolution of a vibrant people place in the Central Waterfront Area, include the following:

• Increase in Public Transit Mode Share: More and more city residents are choosing transit as their preferred means of commuting to and from work, which is also clear in the growing SeaBus volumes over time. This has positive implications not only for Lonsdale Quay but also the adjacent Central Waterfront area. • Growth of Visible Minorities: North Vancouver has seen substantial growth in its proportion of visible minorities, which makes for a more diverse culture but which also has important and positive implications for supportable retail, restaurants, and event programming. • Significant Income Growth: 2.84% average annual growth at the household level, based on the latest available 2013 data estimates.

28 C. Trade Area Demographic Analysis

Central Waterfront Trade Area Delineation

Colliers has delineated a retail trade area for the Central Waterfront Area which represents the geographic area from within which the majority of future annual sales volume is expected to be drawn. Colliers has further disaggregated this larger trade to reflect distinct commonalities in residential clustering and current/anticipated shopping patterns. This includes a Primary Trade Area (PTA) which is essentially a walkable area surrounding the Central Waterfront Area, as well as a short-drive Secondary Trade Area and two larger Tertiary areas to the northwest and northeast.

Tertiary Trade Area NW (TTA NW)

Tertiary Trade Area NE (TTA NE)

Central Waterfront PTA

Secondary Trade Area (STA) 29 C. Trade Area Demographic Analysis

Trade Area Demographics – 2011 Census Population & Dwelling Counts

Between the 2006 to 2011 Census years, the City of North Vancouver grew at an average annual rate of just over 1.3%, seeing its population rise from 45,165 to nearly 48,200 residents. Growth within the defined PTA, which includes a substantial proportion of new multi-family development, has been a significant factor in the city’s growth, with a nominal population increase of nearly 1,250 residents reflecting an annual growth rate of 1.76%.

30 C. Trade Area Demographic Analysis

Trade Area Demographics – 2011 Population By Age Profile

While the average age is nearly identical across all defined trade areas, there are some important nuances in certain key age ranges. Within the defined Primary Trade Area (PTA) surrounding the Central Waterfront Area, for example, 52% of the resident population was between the working ages of 20 and 49 in 2011. This compares to 44% within the STA, 38% within the Tertiary Trade Area (TTA) NE and 38% within the TTA NW.

Higher proportions of residents in these age categories tend to drive strong support for health and recreation oriented retail, as well as restaurant food & beverage uses.

31 C. Trade Area Demographic Analysis

Trade Area Demographics – 2011 Population Marital Status Profile

The defined Central Waterfront PTA also has a high proportion of single and divorced residents, which is common in more urban locations with a strong mix of multi-family living options.

This PTA demographic profile also implies likely strong levels of support for restaurant food & beverage establishments. The short- drive STA area also has a significantly higher than provincial average proportion of single residents, which will also tend to help support a strong mix of food & beverage uses.

32 C. Trade Area Demographic Analysis

Trade Area Demographics – 2013 Household Size Profile

As can be expected in more dense, urban environments where multi-family housing options abound, the defined trade areas’ respective average household size decreases the closer one gets to the subject Central Waterfront Area. Within the walkable PTA, the average size is only 1.75, with nearly half of all households being occupied by a single resident. One and two person households account for 83% of all PTA households, compared to 68% for the STA, 50% for the TTA NE, and 51% for the TTA NW.

The more urban City of North Vancouver population has a significantly lower average household size (2.09) than the District of North Vancouver.

33 C. Trade Area Demographic Analysis

Trade Area Demographics – 2013 Household Tenure & Type Profile

Areas with significantly higher proportions of multi-family housing options also tend to have higher proportions of renters vs. owners and this is true of both the PTA (47% owners vs. 53% renters) and the STA (55% owners). The City of North Vancouver population as a whole, based on 2013 demographic estimates, has an owner proportion of 55%, vs. 81% for the District of North Vancouver.

Renter households also are significantly more likely to purchase meals and beverages at local restaurants throughout the day, but particularly after work hours. This has positive implications for inclusion of restaurant food & beverage uses in the Central Waterfront area.

34 C. Trade Area Demographic Analysis

Trade Area Demographics – 2013 Population By Education Level Profile

Resident education levels are high across both the City of North Vancouver (31% with a university certificate or degree) and the District of North Vancouver (37%). The PTA rate of university-educated (with certificate or degree) residents is also well above the provincial average of 22%. Higher levels of education tend to correlate strongly with more well traveled residents who seek a wider range of goods and services, as well as restaurant food & beverage establishment types.

35 C. Trade Area Demographic Analysis

Trade Area Demographics – 2013 Travel to Work Mode Profile

City of North Vancouver public transit usage is far above provincial levels, which is to be expected given the coverage of bus routes and the presence of the SeaBus connection to Downtown Vancouver.

Nearly 23% of PTA residents are estimated to prefer public transit as a means of commuting, which compares to less than 10% for the District of North Vancouver and just over 10% for the province as a whole.

These figures, and the ongoing growth of SeaBus passenger volumes, have very positive implications for the importance of the Central Waterfront Area as both a social meeting gathering place and as a preferred convenience stop for grab & go food & beverage uses.

36 C. Trade Area Demographic Analysis

Trade Area Demographics – Visible Minority Profile

The City of North Vancouver is significantly more diverse in its ethnic makeup than either the District of North Vancouver or the province of BC as a whole. This diversity has important implications for retail and restaurant (not to mention event) programming within the Central Waterfront Area, as well as for the market acceptance/popularity of prospective restaurant and retail/service tenants. If the Central Waterfront Area is to inclusive and attractive to a broad demographic, the tenant mix should reflect this diversity.

37 C. Trade Area Demographic Analysis

Trade Area Demographics – Household Income Profile

Household incomes are above provincial figures across all defined trade areas, with income levels naturally highest within the TTA NE and NW, where larger single family home options are the norm. Higher incomes, coupled with relatively modest cost of living indices, have positive implications for discretionary spending on retail goods, services, and restaurant food & beverage.

38 D. Trade Area Demand Analysis

Trade Area Demand – Restaurant Food & Beverage Spending (2013 Estimates)

Colliers tracks spending on restaurant food & beverage uses by bundling relevant household (and equivalent per capita) spending levels by defined trade area, based on survey information supplied by Environics (2013 estimates).

A summary of Central Waterfront trade area specific spending estimates at the household and per capita levels are summarized in the table below and used as key inputs into Colliers’ demand modeling.

39 D. Trade Area Demand Analysis

Trade Area Demand – Population Growth Assumptions (to 2026)

As trade area demand is primarily a function of population growth, and related spending potential, Colliers has summarized its trade area-specific population growth assumptions, which have been informed by historical growth rates and adjusted modestly to reflect anticipated changes in development activity.

With 2011 Census figures as a base, the PTA is expected to grow to over 20,000 residents by 2026. The STA can be expected to top 34,000 residents.

40 D. Trade Area Demand Analysis

Trade Area Demand – Projected Additional Annual Restaurant F&B Sales (to 2026)

Anticipated category market shares and associated annual spending volumes to 2026 are presented in the table below. These low and high capture scenarios will then be converted to warranted floor area ranges (square feet) in the table following based on industry- acceptable target sales/sf rates.

41 D. Trade Area Demand Analysis

Trade Area Demand – Warranted Restaurant Food & Beverage Floor Area (to 2026)

Based on anticipated net incremental demand, Colliers expects support for a range of new restaurant food & beverage uses, which would expand the current area offering, including the adjacent Lonsdale Quay Market and existing Pier 7 waterfront restaurant. Colliers ultimately expects support for at least 15,000 sf of related floor area, based on median levels of support by 2026 or high levels of support by 2016.

42 E. Case Study Benchmarks

Overview Analyzing case studies of successful, relevant existing projects can be a very instructive exercise when determining the optimal function, market positioning and merchandise mix of a new retail development.

To inform the positioning of North Vancouver’s Central Waterfront Area, CIC has identified 4 water-oriented retail projects to analyze as case studies:

• Victoria and Alfred Waterfront, Cape Town • Ghirardelli Square, San Francisco • Darling Harbour, Sydney • Pike Place, Seattle

While the projects vary in scale and location, they all have attributes that render them relevant to the Central Waterfront context, including:

• Indoor & Outdoor Components • Significant Food & Beverage Components • Entertainment & Attractions • Arts/Cultural Use Integration 43

E. Case Study Benchmarks

Victoria & Alfred Waterfront (V&AW) Site Context The Victoria & Albert Waterfront (V&AW) site is located at the northern end of Capetown, 3.5 km from the city’s Central Business District. Capetown is a city of over 3.5 million people, the 2nd largest municipality in South Africa and the capital of the Western Cape.

The V&AW is a 303 acre site (217 acres of land and 86 of water) with over 4.3 million square feet of commercial and residential space. It is the most visited tourist attraction in the City, and home to extensive commercial and institutional uses, as well as numerous entertainment venues and public attractions.

The waterfront is built on former vacant industrial lands, with development beginning in 1989 and continuing in phases until today. The property has been kept as single unit under the control of one owner, allowing for the creation of a cohesive mixed-use district N and alleviating the potential for conflicts between uses.

44 E. Case Study Benchmarks

Victoria & Alfred Waterfront (V&AW) Site Components The V&AW has a large variety of uses which include:

• 760,000 ft2 of commercial space including retail markets, restaurants and a 480,000 sf shopping centre.

• Over 450 retailers

• Over 80 restaurants

• 2 museums

• 2 cinemas

• 10 hotels

• 500 residences

• 200 moorings and a yacht marina

• Some office space

• Public promenades and plazas with continuous access to the harbour

• An amphitheater and kids playground (the only major outdoor gathering spaces) N • A working harbour (60% occupied by local fishing industry)

45 E. Case Study Benchmarks

Victoria & Alfred Waterfront (V&AW) Retail Strategy V&AW includes international retail brands, local retailers and artisans situated in a pedestrian-only shopping precinct. It is composed of:

• A 480,000 sf shopping centre

• A newer, street-oriented shopping area

• A craft workshop and a craft market

• A food and wellness market

• Boutiques in retrofitted heritage buildings

• The approximate retail mix as a percentage of GLA is: 61% Traditional Retail; 24% Restaurants and 15% Entertainment. Various shopping environments establish destinations within the V&AW and make the experience more varied. All major commercial destinations are connected by a network of walkways and pedestrian bridges. N All traditional retailers are concentrated indoors. 46 E. Case Study Benchmarks

Victoria & Alfred Waterfront (V&AW) Food & Beverage Restaurant space is concentrated within the shopping mall, the newer street-oriented shopping precinct, and in hotels. Higher-end restaurants are situated with views of the harbour, and many incorporate patio seating on the main plazas. Attractions & Entertainment The V&AW’s commercial and hotel uses are supported by extensive programming of public space with entertainment, including shows at an outdoor amphitheatre, the presence of buskers (who must audition for a permit), weekly concerts and festivals. Additionally, the site includes many large attractions, including a science centre, an observation wheel, museums and an aquarium. It also capitalizes on its waterfront location and existing building stock with historical tours, places to watch and feed seals, tours of Robben Island, and fishing and sailing opportunities. N

47 E. Case Study Benchmarks

Victoria & Alfred Waterfront (V&AW): Lessons for the Central Waterfront Area

The V&AW is a very successful project, with • The V&AW has a large amount of ocean retail vacancy rates of below 2% and an overall frontage and although a concentration of vacancy rate of 2.1%. The site hosts 22 million retail and restaurants on the harbour has visits per year. It owes its success to a number helped give critical mass to the project, of factors, including: significant ocean frontage is dedicated to roads and parking lots. This is a lost • A focus on the waterfront as an amenity with attractions and space oriented to the water. opportunity. • The project has struggled to create a place • The maintenance of a working harbour gives the project an authentic feel. to that works for both locals and tourists. While it has stated its intention to create • Developing nodes with distinct, but cohesive authentic places when locals congregate, themes, creating a number of smaller it is often perceived as exclusive and districts within a large site. The site area of primarily tourist-serving. the Central Waterfront is much smaller that V&AW; however, the creation of smaller • It is not expected that the CWA will face districts – pubic market, destination this challenge; however, restaurant restaurant, etc – can still be implemented. tenants at a range of price points will alleviate perceptions of exclusivity. • A variety of retail environments and uses help cater to different markets and generate traffic at different times of the day.

• Diverse retail space sizes and locations allow for lower cost spaces for local and small merchants. N

48 E. Case Study Benchmarks

Ghirardelli Square Site Context Ghirardelli Square (the square) is a single city block of mixed retail, restaurant and hotel uses located on San Francisco’s waterfront. The square is a short walk from Fisherman’s Wharf – the most popular tourist destination in San Francisco.

The square is a heritage site and was previously the home of the Ghirardelli chocolate factory, imbuing the site with historic character. The project leases for around $60 per square foot, triple net.

Site Components The square has retail, restaurant and hotel uses, divided as follows:

• 40,000 sf of retail space

• 55,000 sf of restaurant space • 9,000 sf of space for a kid’s club and N preschool

• 53-unit luxury hotel (Fairmont)

• Approximately 25,000 sf of outdoor plaza 49 space in a central courtyard E. Case Study Benchmarks

Ghirardelli Square

Tenant List Destination Restaurants • High-End Vietnamese – Ana Mandarak • American Diner - Loris Diner • Seafood - McCormick & Kuleto’s • Bar & Grill - The Pub

Specialty F&B/Café/Bar • Café & Confectionary - Ghirardelli’s Ice Cream & Chocolate Shop • Artisan Bakery - Kara’s Cupcakes • Wine Tasting – Wattle Creek Winery

Comparison & Service Boutiques • Health & Beauty - Elizabeth W • Children’s Edutainment Anchor - Peekadoodle Kidsclub • Tour Service Outlet - Tower Tours • Specialty Dog Store - Yap Wraps • Stationary & Gifts- Lola of North Beach • Apparel & Accessories - Gigi + Rose • Toys – Lola Toy Shop • Artisanal Carvings – One of a Kind N • Vintage Apparel – Helpers Bazaar • Apparel, Books & Gifts – Jackson & Polk 50

E. Case Study Benchmarks

Ghirardelli Square

Attractions & Entertainment • The square hosts 7 annual events, including a wine festival, a children’s festival and a chocolate festival.

• Because Ghirardelli is still a well known high-end chocolate maker, the chocolate and ice cream shop is a draw in and of itself and the maintenance of this historical use adds authenticity.

• Restaurant space, the Fairmont terrace, and the plaza are all available for private events • Walking tours of the square are offered 3 times per week.

• Musical performances are regularly scheduled for the plaza.

• The kid’s club draws local families to the square.

N

51 E. Case Study Benchmarks

Ghirardelli Square

Lessons for the Central Waterfront • Uses heritage character, boutique retail, food and beverage offerings, and luxury hotel to distinguish itself.

• The category mix is restaurant-centric with a range of types and price points. The restaurants are performing well and Ghirardelli Square is looking to expand its restaurant offering.

• Hosts public events increasing awareness of the square and books private events to generate significant revenues.

• Draws tourists with its historical character , tour operator and hotel, and draws locals with unique retailers, providing the project with appeal to varied market segments.

• Situates restaurants with outdoor seating and excellent views of the bay and the courtyard.

• The public outdoor space is well designed N and scaled: it can accommodate enough people so that it doesn’t feel overly crowded during peak times, but small enough to feel activated with only a few 52 people using the space.

E. Case Study Benchmarks

Darling Harbour Site Context Darling Harbour is a major waterfront development in Australia’s largest city, managed by the state government via the Sydney Harbour Foreshore Authority (SHFA). The SHFA manages 139 tenancies at Darling Harbour, provides tenant services and hosts numerous free annual events at the Harbour. The site enjoys excellent, multi-model access with ferry, bus, train, tram and automobile infrastructure.

The Harbour was created from industrial lands beginning in 1988 and has since become the major shopping and convention destination for the city, drawing 25 million visits annually, including workers and residents. It enjoys excellent access by public transit, extensive parking facilities and close proximity to the central business district. It is also a major node for ferry traffic around Sydney and has a cruise ship terminal with ships arriving every 1-2 days.

N

53 E. Case Study Benchmarks

Darling Harbour

Major Retail & Public Space

Harbourside Shopping Centre • Over 50 retail stores • 23 restaurants & a food court • 6 entertainment destinations including laser tag, bowling and a flight simulator

Additional Retail • 40 restaurants • 18 cafes • 15 fast food restaurants • 21 bars, pubs and clubs

Cockle Bay Wharf • The project’s primary restaurant precinct

Outdoor Space • 6 outdoor venues including wharves, parks and plazas • Combined capacity of 13,500 people for booked events N Accommodation • 11 hotels in area with a total of 3,397 hotel rooms 54

E. Case Study Benchmarks

Darling Harbour

Attractions & Entertainment

Conference & Exhibition Centre • 323,000 ft2 of exhibition space

Museums, Galleries and Aquariums • Australian National Maritime Museum • Powerhouse Museum • Sydney Galleries • Wentworth Gallery Four Points • Sydney Aquarium

Concerts, Theatre & Cinema • Sydney Entertainment Centre • IMAX Theatre • Two theaters for live performances

Other • Madame Tussauds – Sydney • Weekly fireworks • Playground • Chinese Gardens • Nightly light shows N

55 E. Case Study Benchmarks

Darling Harbour

Lessons for the Central Waterfront While the scale of Darling Harbour is significantly larger than the CWA, there are nonetheless instructive elements. Retail is clustered in a single shopping centre with no anchor tenants because of the other large draws nearby. All major attractions have harbour frontages, and are sited so that to travel between two venues will require visitors to walk by the site’s restaurants.

Throughout the Harbour, restaurants and retail are interspersed with cultural and entertainment destinations. This provides an interesting environment for pedestrians and prevents the occurrence of “dead” zones in the evening when the cultural institutions close.

Cockle Bay Wharf (CBW) within Darling Harbour is the project’s primary food & beverage precinct. CBW is located on the CBD side of the Harbour between the IMAX and Sydney Aquarium. Locating a restaurant district between two major entertainment/cultural anchors animates the space and provides the restaurants with walk-by traffic. The Wharf serves various market segments with a range of F&B options: 5 restaurants, 3 cafes, 3 bars, 4 QSRs and 1 nightclub. The majority of tenants are oriented towards the water, taking advantage of harbour views and offering significant outdoor patio space for al fresco dining.

Initially leasing of the centre was slow. The F&B industry perceived Darling Harbour as tourist-centric and not a destination for higher end restaurants. To ameliorate this perception, CBW emphasized local culture and food and focused on attracting Sydney residents – particularly office workers and downtown residents.

56

E. Case Study Benchmarks

Pike Place Site Context Pike Place is a 9 acre public market style retail attraction and historic district overlooking Elliott Bay, near downtown Seattle. It is managed by the Pike Place Market Preservation & Development Authority (PDA), a not-for-profit, public corporation chartered by the City of Seattle.

As such, Pike Place has a different goal than some other waterfront retail developments. The goals of the PDA are: • Preserve the character of the historic district through preservation and restoration. • Maintain public market functions • Preserve and expand residential community, especially for low-income people. • Support small, independent shops, especially farmers. • Connect consumers with producers. N Pike Place attracts 10 million visitors annually and contains approximately 160,000 sf of commercial space. 57 E. Case Study Benchmarks

Pike Place Site Components Pike Place includes: • Retail space for over 200 permanent tenancies, 200 craftspeople and 100 farmers in 2012. • 350 housing units – mostly for low income seniors • 4 social services agencies, including a Food Bank, Senior Center, Childcare and Pre-school, and Medical Clinic • 70 room luxury boutique hotel

Attractions & Entertainment The unique character and retail offerings, such as the famous Fish Market, are the main attraction for Pike Place. While there are no cultural institutions within Pike Place, there are several within two blocks of the Market:

• The Seattle Aquarium • The Seattle Art Museum N • A live performance theatre

• An improv theatre

58 E. Case Study Benchmarks

Pike Place Lessons for the Central Waterfront Area

• Pike Place has a meticulous selection process for retail tenants that favours independent businesses.

• This, along with the setting, gives the market an authenticity that attracts visitors and locals alike and distinguishes itself from other retail clusters in the area.

• The market is made more flexible and vibrant by using outdoor space (sidewalks, temporary road closures, etc.) as additional retail area.

• Restaurants and cafes compliment the public market component and are located throughout the district – driving evening traffic to various locations in Pike Place and animating the district in the evening. The F&B offering ranges from bakeries to fine dining establishments. • Pike Place is not situated directly on the N water, but the market is at a higher grade than Elliott Bay, providing the market with excellent views. Some restaurants such as the Pink Door in Post Alley, have patios 59 overlooking the water. E. Case Study Benchmarks

Pike Place Role of Retail, Restaurant and other Revenue Sources The charts and tables show the revenue sources, commercial rent breakdown and gross sales figures for Pike Place in 2012. Restaurant rents accounted for 49% of total commercial rents at Pike Place and 38% of total retail sales.

2012 Pike Place Total Revenues 2012 Total Rents 2012 Pike Place Retail Sales Commercial $ 7,738,075 Food $ 1,197,086 Food $ 48,223,622 Residential $ 2,116,811 Restaurant $ 1,430,663 Restaurant $ 40,759,844 Parking $ 2,061,211 Mercantile $ 291,972 Mercantile $ 17,468,744 Daystall $ 1,041,155 Total $ 2,919,721 Total $ 106,452,210 Other $ 298,745 Source: PDA Source: PDA Total $ 13,255,997 Commercial Rents 2012 Retail Sales Source: PDA Other 2% Mercantile Daystall 10% Mercantile, 8% $17,468,774

Parking Restaurant, 16% $40,759,844 Restaurant 49% Commercial Food Residential 58% Food, N 41% 16% $48,233,622

60 F. Building on Best Practices

Waterfront Planning Principles

The Project for Public Spaces (www.pps.org) is an excellent resource for planning projects with a significant focus on public access and enjoyment. Colliers finds its “10 Qualities of a Great Waterfront Destination” to be particularly helpful. These are summarized below for reference:

1. Surrounding buildings enhance public space. (Boost activity with mix of uses, drive indoor- outdoor activity, avoid blank walls at-grade, enhance movement/circulation) 2. Limits are placed on residential development. (Waterfronts should be preferred sites for festivals, markets, fireworks, concerts, celebrations. Need to minimize private space in the interest of public space.) 3. Activities are 24-hour and year-round. (Weather is made irrelevant, as smart use of amenities should protect visitors from inclement weather. Lighting key for comfort and safety.) Images from Aker Brygge waterfront in Oslo, Norway

61 F. Building on Best Practices

Waterfront Planning Principles (Continued)

4. Flexible design fosters adaptability. (Consider impermanent, flexible structures and on-site storage for movable chairs, tables, umbrellas, games. e.g. Bryant Park mobile furniture in NYC below)

5. Creative amenities to boost everyone’s enjoyment. (Benches/waste bins in optimal locations, lighting to strengthen identity, public art as a magnet for people, especially children. Amenities should support long dwell times.)

Ghirardelli Square in San Francisco, California

62 F. Building on Best Practices

Waterfront Planning Principles (Continued)

6. Easy access by boat, bike, or foot. (Many easy and interesting ways to reach the area other than driving, such as water taxi, pocket cruise, biking, etc. People feel more at ease when not overwhelmed by traffic and parking lots.) 7. Local identity is showcased. (History and culture are showcased, active/historical marine uses incorporated, local art/music/theatre featured, regularly programmed.)

Public art honouring shipbuilding past – Central Waterfront, North Vancouver

Giant padlock bike racks in Downtown Nashville, Tennessee 63 F. Building on Best Practices

Waterfront Planning Principles (Continued)

8. The water itself draws attention/focus. (The water should be the centerpiece for programming and activities. Can include traditional marine uses, but also water taxis, boat tours, restaurants/bars on anchored boats, boat festivals.) 9. Iconic buildings serve a variety of functions. (Iconic, eye-catching buildings reflect a human scale and do not detract from the surrounding context. Serve a range of functions rather being single purpose.) Relundersgrund boat restaurant – Helsinki Market Square & Esplanade 10. Good management maintains community vision. (Important to have a management model that helps to foster and sustain a diverse variety of activities and events.)

Russian tall ship on pier in North

Vancouver (February, 2010)

Floating stage in Westlake,

64 F. Building on Best Practices

Downtown Key Facts (DDI)

North Vancouver’s Central Waterfront Area should not only be a great waterfront destination, but also the heart of the city. The following Downtown Key Facts, as outlined by Roger Brooks at DDI, can also be very helpful guiding principles for Central Waterfront planning, particularly from a retail perspective:

1. The heart and soul of every community, besides people, is its downtown. 2. The #1 visitor activity is shopping, dining & entertainment in a pedestrian-friendly setting. 3. The average visitor is active 14 hours a day, yet spends only 4-6 hours with the primary activity that brought them there. Outdoor movie screening – Dundas Square, Toronto 4. Secondary activities are where 80% of all visitor spending takes place. 5. Curb appeal can account for 70% of visitor sales at restaurants, golf courses, wineries, retail shops and lodging facilities. 6. If local residents do not hang out downtown, then neither will tourists and visitors. 7. 10 + 10 + 10 Rule of Critical Mass: Minimum critical mass (for a traditional downtown) is 3 linear blocks, with a minimum of: 10 places that serve food, 10 “destination” retail shops, and 10 places open after 6PM (preferably with an entertainment component.) 8. 70% of all consumer spending takes place after 6 P.M. Restaurant Kapelli – Helsinki, Finland

65 F. Building on Best Practices

Colliers Waterfront Principle Support Matrix North Vancouver Central Waterfront Based on ideas and concepts derived from a number Adapted Waterfront Planning Principle Support Matrix of important organizations and authorities on the subject of waterfront planning, in addition to CIC’s Support For Principle own experience in developing effective retail (Downtown) Waterfront District Planning Principle Weak (1) Fair (2) Strong (3) strategies for a variety of urban mixed-use waterfront Generates 24-hour activity, including activities after 6PM settings, the attached matrix was created. Offers Year-round, weather-protected activity Showcases local identity (History/culture/arts/music) Relevant authorities offering input ideas for this Leverages water as centerpiece for programming/activities matrix include the Project for Public Spaces, the Flexible design fosters adaptability Urban Land Institute, and Destination Generates regular visits from broad array of local residents Development International (Roger Brooks). (inclusive rather than exclusive) Colliers has adapted and honed these various Building(s) enhance public space, boost surrounding activity with mix of uses, indoor/outdoor activity waterfront planning best practices to be of use in evaluating potential uses for each key location within Iconic buildings serve multiple functions. Generates significant City revenues the larger Central Waterfront Area of North Generates regular patronage from broad array of regional Vancouver. The included criteria reflect an overall tourists/daytrippers/visitors balance in City objectives, including optimizing New development fits within the community's larger vision, public access/enjoyment, minimizing costs to the leveraging and complementing exisitng amenities and uses to create a more appealing whole. City, and maximizing activity throughout the year. Differentiates the larger place from other competing destinations Each use/location has been scored, by Colliers TOTAL SCORE & % of MAXIMUM SCORE OF 36 # X% alone, based on likely support for the identified Sources: principle. Support for identified principles range from Project for Public Spaces Urban Land Institute 1 point for Weak Support to 3 points for Strong Destination Development International (Roger Brooks) support. Overall scores are then tallied based on a Colliers International Consulting maximum score of 36 (and % of maximum score). 66

G. Evaluating Potential Uses by Location

Central Waterfront Area – Key Uses Key Central Waterfront sub-areas under review by Colliers International Consulting are highlighted below:

A. Foot of Lonsdale B. Lots 3 & 4 (Refurbished Former Heritage Area Shipyard Buildings)

D. Lot 5 – Vacant parcel under planning review

C. Burrard Dry Dock Pier (with Electrical Building)

67 G. Evaluating Potential Uses by Location

A. Foot of Lonsdale Sub-Area Key elements with significant retail and public North-side PHG Media Centre Retail to activate water’s retail to activate Carrie Cates edge, leverage view potential space activation potential within the Foot of Court frontage Lonsdale include the following:

• Potential retention/relocation of historic PGE Railway building: Originally housed the Pacific Great Eastern Railway Station (1913) – a rail link between North Vancouver west through Howe Sound and into BC’s Interior.

• Presentation House Gallery Media Centre: New building to be located on land, not piles, framing the Foot of Lonsdale on the plaza’s western edge.

• New Retail CRU (north and south sides of planned PHG Media Centre): Uses fronting Carrie Cates Court would leverage pedestrian traffic, while a south-facing unit would leverage a dramatic waterfront location

• Public open space between PHG Media Centre and west edge of existing building on Lot 3 Critical Patio Locations needed to activate public Ideally, the planned PHG signature building would space/plaza at Foot of Lonsdale include a waterfront bistro/café space of 2,500 to 3,000 sf and 2,000 sf of CRU space along the Spirit Trail building’s NW corner, along Carrie Cates Court. 68

G. Evaluating Potential Uses by Location

B. Lots 3 & 4 Refurbished Historic Buildings This area includes two former heritage shipyard buildings Lot 4 – Pipe Shop which are expected to be leased to the City by Pinnacle International under a 50 year lease. A Certificate of Compliance from the Ministry of Environment is expected to be issued sometime in 2013.

• Lot 3 – “Coppersmith Shop”: Refurbished building offers 8,525 sq. ft. of commercial space, with outdoor dining potential adjacent to the west side within the foot of Lonsdale area. From a market perspective, this building, which is ideally suited to destination restaurant uses, will require significant outdoor dining patio areas along the west, south and east sides of the building, as this would maximize both appeal and public space animation. Patio areas:

• Lot 4 – “Pipe Shop”: Includes the 8,981 sq. ft. “pipe shop” building (proposed for use as the new base for the North Shore Museum and Archives) and an ancillary building (SE corner) of 387 sq. ft.

• Shipbuilders Square – public open space directly south of the lot 4 “Pipe Shop” building, which is actively programmed throughout the year (e.g. August concert Lot 3 – Shipbuilders series, summer Friday night farmer’s markets, Party at Coppersmith Square the Pier (July) and Christmas Festival (December). Shop

69 G. Evaluating Potential Uses by Location

C. Burrard Dry Dock Pier & D. Lot 5

• Burrard Dry Dock Pier: It is recommended the City of North Vancouver develop a business case for this asset, which has the potential to attract regular visits related to the “pocket cruise” industry and other programming Lot 5 activities. The pier offers visitors a more direct physical connection with the

water, which would be significantly enhanced by regular pocket cruise ship visits. Colliers supports a range of active uses for this vital water-oriented asset, including as an important and high profile stop for tall ship visits or festivals.

• Lot 5: Vacant parcel which, under current zoning, offers potential for up to 63,830 sf of potential mixed-use commercial/retail/office space. Colliers’ retail findings and recommendations are intended to serve as key inputs into a lot 5 Electrical planning process, particularly with respect to: Building

• Overall scale of commercial facilities

• Preferred/market supportable mix of commercial facilities

• Ideal tenant types (which will meet desired social and economic objectives)

• Preferred scale and mix of public amenities Burrard Dry Dock Pier

70 G. Evaluating Potential Uses By Location

A. Foot of Lonsdale – Relocated PGE Building Should the historic PGE Railway building be retained and relocated within the Foot of Lonsdale area, Colliers highly recommends that it be repurposed for use as a casual seafood restaurant with outdoor patio seating capacity. Colliers evaluated an alternative bicycle rental concept use for this building, but views this particular location as being better suited to a casual food & beverage operator who can take better advantage of the outdoor space and water views.

North Vancouver Central Waterfront Adapted Waterfront Planning Principle Support Matrix Relocated PGE Building (Foot of Lonsdale) - F&B Use Support For Principle (Downtown) Waterfront District Planning Principle Weak (1) Fair (2) Strong (3) Generates 24-hour activity, including activities after 6PM * Offers Year-round, weather-protected activity * Showcases local identity (History/culture/arts/music) * Leverages water as centerpiece for programming/activities * Flexible design fosters adaptability * Generates regular visits from broad array of local residents (inclusive rather than exclusive) * Building(s) enhance public space, boost surrounding activity with mix of uses, indoor/outdoor activity * Iconic buildings serve multiple functions. * Generates significant City revenues * Generates regular patronage from broad array of regional tourists/daytrippers/visitors * New development fits within the community's larger vision, leveraging and complementing exisitng amenities and uses to create a more appealing whole. *

Differentiates the larger place from other competing destinations * TOTAL SCORE & % of MAXIMUM SCORE OF 36 30 83% 71 G. Evaluating Potential Uses By Location

A. Foot of Lonsdale – Presentation House Gallery Media Centre Colliers also supports the integration of arts & cultural uses into mixed-use waterfront environments such as North Vancouver’s Central Waterfront, provided that they make an effort to be inclusive and approachable, to interact with neighbouring uses, and to support activity in nearby public spaces. Wherever possible, uses which are more internalized by nature should be made more transparent and active at-grade through the inclusion of uses which allow for indoor/outdoor access and visibility, such as a café which might have both an internal and external point of contact with visitors. From a Central Waterfront retail perspective, it will be critical for public space activation to incorporate retail CRU spaces on the planned building’s north side at-grade, along with a larger south-facing waterfront CRU space that is able to leverage the waterfront location.

72 G. Evaluating Potential Uses By Location

B. Lots 3 & 4 – Coppersmith Shop (Lot 3) A first-to-market destination restaurant is the optimal use for the majority (or perhaps all) of the building on lot 3 as it offers superior visibility and accessibility, iconic architecture with historical elements, waterfront orientation and opportunities for a mezzanine level.

Colliers is aware that Starbucks is seeking to relocate from its current location at the 131 W. Esplanade property purchased by Polygon to another suitable waterfront area location. This would be an ideal type of use for the building’s north portion, should a large restaurant not require the entire building footprint.

73 G. Evaluating Potential Uses By Location

B. Lots 3 & 4 – Pipe Shop Building (Lot 4)

Colliers understands that the 8,981 sf “Pipe Shop” building is currently being proposed for use as the new base of operations for the North Shore Museum and Archives. There is also an ancillary building of 387 sf which is being considered for potential retail/commercial use. Colliers has serious concerns with attributing too high a proportion of existing at- grade building area to non-profit arts & cultural uses.

These concerns are reflected in the Planning Principle Support Matrix on the right. Limited repeat visits, limited after hours activity, limited externalization and low revenue generation are among the most pressing concerns.

74 G. Evaluating Potential Uses By Location

B. Lots 3 & 4 – Pipe Shop/Ancillary Building Yoga/Pilates/Day Spa Beyond the recommended destination restaurant use for the Coppersmith Shop building on Lot 3, Colliers would highly recommend exploring a more active, higher revenue- generating use for the high profile character building on Lot 4, fronting Shipbuilders Square. A vibrant mix of restaurant food & beverage uses for this refurbished 8,525 sf building Casual would ideally include a full-service restaurant or two on the F&B/Café/ south end with patio space spilling out onto Shipbuilders Grab & Go Square. This would provide optimal public space animation, Food which will support the area’s appeal as an active publicly accessible waterfront.

Colliers also highly recommends exploring recreation and active health-oriented uses for the building’s northern portion, as these would support the CWA’s desired commercial market positioning as a restaurant and recreation destination. Casual Food & The ancillary building could be used as a concession take- Beverage out window for the larger restaurant, similar to the Cactus Club Concession window kiosk at English Bay. The northwest corner of the building would be an optimal location for a specialty grab and go coffee purveyor, as the presence Destination of a Starbucks will generally generate sufficient customer Restaurant traffic to support a second coffee shop.

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G. Evaluating Potential Uses By Location

C. Lot 5

Having reviewed local market conditions for both retail and office land uses, and having discussed the potential to accommodate hotel expansion with Pinnacle, Colliers highly recommends a land use mix oriented around expansion of Pinnacle’s hotel complex.

The following mix of uses should be actively explored as they offer an optimal balance of revenue generation, year-round activity and support for the area as an active, recreation- friendly destination/key stop along the Spirit Trail:

• Hotel expansion – 75 to 100+ additional rooms

• Banquet hall – second floor space, to be determined

• Destination fitness centre (various potential operators)

• Bike sales and rental shop – 2,500 to 3,000 sf)

• Educational institution – second level floor space, to be determined

• Entertainment uses (e.g. modestly scaled movie complex, live theatre, comedy club)

• Public waterfront park, with water feature/seasonal rink Colliers will be pleased to provide additional input into the ongoing Lot 5 planning process. 76 H. Recommendations for Success

Colliers’ Sheldon Scott & Doug LePatourel’s Recommendations for Successful Retail Commercial Waterfront Areas

• Most tenants, particularly restaurants eateries and cafes, have criteria that must be met for each store including design, size, loading and parking.

• Waterfront restaurants look for large patios, with space able to accommodate 150 seats or more.

• Retailers require their premises to be easily accessible to the buying public. As a result, access/egress by way of traffic signalization, or “dedicated” turning lanes is encouraged. Directional signage and “wayfinding” cues also helps in this regard. Olympic Village is an example of great signage and “wayfinding”. Canada Place is not.

• Parking: must be clean, easy, safe and possibly free to start, for the first six months while the development gains traction. Ensure the entrances to parking lots are properly identified with signs, if possible. This contributes to the restaurants’ success or lack thereof. For example, Boston Pizza on Esplanade has ample parking but it is not convenient or obvious, while the Lonsdale Quay Parking lot is easily obvious and always full.

• Restaurant areas can have very high parking demands as their busy times are often ‘peak loaded’ rather than spread evenly through the day and week.

• Easy circulation throughout the parking lot is very important to ensuring that customers return. Driveway aisles should provide a width that will enable vehicular traffic to comfortably maneuver in and out of the parking lot.

• Retailers also want to know that the parking facility will appeal to their customers and employees, particularly women. Security may be required to ensure that the parking lot is as safe as possible at all times, especially after dark.

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H. Recommendations for Success

Colliers’ Sheldon Scott & Doug LePatourel’s Recommendations for Successful Retail Commercial Waterfront Areas

• Retailers require high exposure premises in order to perform competitively within their respective markets. This is typically realized by orienting storefronts and/or signage toward main thoroughfares, commercial corridors, or popular streets. Backlit signage is a must for today’s most successful retailers.

• Establish Signage Guidelines as quickly as possible. This will enable the Landlord to maintain control over the visual attractiveness of the commercial areas.

• Provide ceiling height with clearance of a minimum of 14 feet clear (higher is better but more costly). The standard 10“ feet ceiling clearance” is quickly changing. Specialty coffee, grocery, fashion, restaurants and even financial institutions are requesting greater ceiling heights.

• Many retailers and restaurants require specialized loading facilities. In fact, it is a necessity for grocery, liquor and drug stores, and more restaurants and entertainment uses, are requiring the same.

• Depths of the CRUs should be a maximum of 60 feet. In fact, depths of 50 feet are preferred. It is our experience that CRU-type tenants are getting smaller and depths of 60 feet will allow flexibility to accommodate tenants as small as 800 square feet in size. This will assist the goal of optimizing the tenant mix and maximizing the financial performance of the development.

• Lease negotiations are time-sensitive in nature and require responsiveness. Thus, it is highly recommended that decision making for lease negotiations be centralized with a single individual rather than council or board.

• Leases should be 10 years plus 3 options to renew for 5 years each.

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I. Recommended Tenant Mix By Location

Colliers recommends the following tenant types by Central Waterfront Area Location:

79 I. Recommended Tenant Mix By Location

Recommended Retail Strategy Colliers’ recommended retail strategy for the Central Waterfront Area is presented in the following augmented aerial image. This strategy fully complements the Lonsdale Quay Market and couples warranted new restaurant food & beverage uses with recreation-oriented uses that will best leverage the CWA’s waterfront location and access to the Spirit Trail. This recommended retail mix will also serve to activate the various public open spaces throughout the Central Waterfront, including the Foot of Lonsdale, Shipbuilder’s Square, Lot 5 and the Burrard Dry Dock Pier, from day to night and throughout the calendar year.

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