Review of Proposed Development at Britannia Beach

December 2012

Prepared for: Squamish-Lillooet Regional District

By: Coriolis Consulting Corp.

REVIEW OF PROPOSED DEVELOPMENT AT BRITANNIA BEACH Table of Contents

1.0 Introduction ...... 1

1.1 Background and Purpose ...... 1 1.2 Developer’s Study ...... 1 1.3 Professional Disclaimer ...... 1

2.0 Development Concept ...... 3

2.1 Site Location in Regional Context ...... 3 2.2 Site Description ...... 4 2.3 Development Plan ...... 4

3.0 Developer’s Market Analysis ...... 6

3.1 Demographic Trends and Housing Demand ...... 6 3.2 Market Competition and Absorption ...... 8

4.0 Approach and Study Area ...... 9

5.0 Evaluation of the Residential Market Performance of the Proposed Concept12

5.1 Development Capacity in the Study Area ...... 12 5.1.1 Existing Development Capacity and Potential Additional Supply ...... 12 5.1.2 Competing Projects...... 13 5.1.3 Summary of Residential Development Capacity ...... 14 5.2 Indicators of Absorption by Type of Unit in the Study area ...... 15 5.2.1 Absorption Trends at Major Projects in the Britannia Beach Area ...... 15 5.2.2 Development Trends in the Study Area ...... 16 5.2.3 Population and Household Growth 2001-2011 ...... 18 5.2.4 Population and Household Forecasts 2012-2031 ...... 19 5.2.5 Summary of Indicators of Residential Absorption in the Study Area ...... 22 5.3 Comparison of Development Capacity with Potential Absorption ...... 22 5.4 Potential for Drawing New Demand to the Study Area ...... 23 5.4.1 Active Commuters...... 23 5.4.2 Affluent Metro Vancouver Residents Near Retirement Age ...... 25

CORIOLIS CONSULTING CORP. PAGE I

REVIEW OF PROPOSED DEVELOPMENT AT BRITANNIA BEACH

5.4.3 Former Whistler Residents and old Sports-Minded ...... 26 5.4.4 Young Sports-Minded ...... 26

6.0 Summary of Potential Residential Absorption in the Study Area ...... 28

7.0 Upper and Lower Estimates of Absorption at the Proposed Project ...... 29

8.0 Evaluation of Commercial Development Potential Based on Market Indicators ...... 30

8.1 Developer’s Evaluation of Commercial Development Potential ...... 30 8.2 Evaluation of Supportable Retail/Service Potential ...... 31

APPENDIX: Study Area Development Projects ...... 33

CORIOLIS CONSULTING CORP. PAGE II

REVIEW OF PROPOSED DEVELOPMENT AT BRITANNIA BEACH 1.0 Introduction

1.1 Background and Purpose

Taicheng Development Corp. is proposing a large comprehensive project in South Britannia. The plan includes about 3,000 residential units of various types (with almost half proposed to be low-rise or high-rise apartments), 330,000 square feet of retail, office, and hotel, and a variety of recreational and community amenity facilities. We understand that the concept plan (including unit count) is being refined, but our analysis assumes that the project consists of about 3,000 units.

The developer’s projected residential absorption rate is on the order of 300 units per year. The total project size, the residential unit mix, and the projected absorption rate can all be considered aggressive relative to past development and trends in the Sea-to-Sky Corridor.

The Squamish-Lillooet Regional District (SLRD) is evaluating this development application and is interested in an independent opinion on the likely market performance of the plan. Because the project would have implications for infrastructure, school planning, land use planning throughout the corridor, and other planning considerations, SLRD is looking for advice as to whether the project would be likely to be absorbed in the time frame proposed by the developer. The SLRD is mainly interested in the residential and retail components of the project and wants a high level review at this time. The SLRD retained Coriolis to evaluate the proposed concept and comment on the likely absorption period and the mix of residential units.

1.2 Developer’s Study

Our review of the development proposal for the subject site relies on information provided by the client. Our work references the market study entitled “Britannia Beach South, Howe Sound, British Columbia: Master Planned Community – Market Demand / Supply and Financial / Economic Impact Study” prepared by Site Economics Ltd. in December 2011 (plus partial update in the Fall 2012).

1.3 Professional Disclaimer

This document may contain estimates and forecasts of future growth and urban development prospects, estimates of the financial performance of possible future urban development projects, opinions regarding the likelihood of approval of development projects, and recommendations regarding development strategy or municipal policy. All such estimates, forecasts, opinions, and recommendations are based in part on forecasts and assumptions regarding population change, economic growth, policy, market conditions, development costs and other variables. The assumptions, estimates, forecasts, opinions, and recommendations are based on interpreting past trends, gauging current conditions, and making judgments about the future. As with all judgments concerning future trends and events, however, there is uncertainty and risk that conditions change or unanticipated circumstances occur such that actual events turn out differently than as anticipated in this document, which is intended to be used as a reasonable indicator of potential outcomes rather than as a precise prediction of future events.

Nothing contained in this report, express or implied, shall confer rights or remedies upon, or create any contractual relationship with, or cause of action in favor of, any third party relying upon this document.

CORIOLIS CONSULTING CORP. PAGE 1

REVIEW OF PROPOSED DEVELOPMENT AT BRITANNIA BEACH

In no event shall Coriolis Consulting Corp. be liable to the Squamish-Lillooet Regional District or any third party for any indirect, incidental, special, or consequential damages whatsoever, including lost revenues or profits.

CORIOLIS CONSULTING CORP. PAGE 2

REVIEW OF PROPOSED DEVELOPMENT AT BRITANNIA BEACH 2.0 Development Concept

2.1 Site Location in Regional Context

The site is located at Britannia Beach in Electoral Area D of the SLRD. Nearby communities to the south include Furry Creek (6 km), Lions Bay (21 km), and Horseshoe Bay (33 km). Nearby communities to the north include Squamish (12 km) and Whistler (70 km). The site is connected to the surrounding communities by the Sea-to-Sky Highway 99, which offers easy access south to downtown Vancouver (51 km) and the entire Metro Vancouver region. Exhibit 1 shows Britannia Beach in a regional context:

Exhibit 1: Britannia Beach in Regional Context

CORIOLIS CONSULTING CORP. PAGE 3

REVIEW OF PROPOSED DEVELOPMENT AT BRITANNIA BEACH

2.2 Site Description

The proposed development is located south of the Britannia Beach town centre on a 600 acre parcel. The developer’s consultant indicates that site constraints limit the total developable area to approximately 310 acres. The irregularly shaped and sloping property has approximately 1 km of low bank waterfront on Howe Sound and has the potential to offer excellent views from the upland areas. Most of the property is separated from the waterfront by Highway 99 and the rail right-of-way, which run across the property. The site operated as a gravel pit in the past but is mostly undeveloped and parts are still forested. The property is mostly surrounded by undeveloped land. Exhibit 2 shows an aerial view of the site. The yellow outline indicates Crown land the developer would like to include as part of the development proposal, but does not currently own.

Exhibit 2: Aerial View of the Subject Site

2.3 Development Plan

Taicheng Development Corp. is proposing a master planned mixed-use development at Britannia Beach South. The residential portion of the project consists of 1,423 apartment units, 1,467 ground-oriented multi- family units, and 110 single family units for a total of 3,000 residential units at build-out. The majority of residential units are proposed for the upland portion of the property. The commercial portion of the development plan envisions 185,893 sq.ft. of retail space including a grocery store, 19,375 sq.ft. of professional office space, and 3 resort hotels. Most of the proposed commercial space is located along Highway 99 and the waterfront area. The proposal also includes 27,986 sq.ft. of industrial floor space.

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REVIEW OF PROPOSED DEVELOPMENT AT BRITANNIA BEACH

Amenities include a boardwalk, marina, parks, walking paths, and a school. The site plan for the proposed development is shown in Exhibit 3.

Exhibit 3: Proposed Site Plan for Subject Project (Britannia Beach South)

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TITLE 3.0 Developer’s Market Analysis The developer’s market analysis study (the Site Economics Report) is entitled “Britannia Beach South, Howe Sound, British Columbia: Master Planned Community – Market Demand / Supply and Financial / Economic Impact Study” and was prepared in December 2011 and subsequently updated by Site Economics Ltd.

The purpose of the Site Economics Report is to estimate the absorption rate for different forms of development for the proposed project at Britannia Beach. The Site Economics Report assumes a project of 3,000 units at build-out and examines future housing demand in Metro Vancouver, Squamish, and the Sea- to-Sky corridor based on recent and projected demographic trends.

3.1 Demographic Trends and Housing Demand

The Site Economics Report states “the demand for a new high quality master planned community in this prime location between Vancouver and Whistler is strong and will be sustained by long-term economic and societal trends (p.88).” The Report indicates this conclusion is based mainly on broad economic and demographic trends in the Metro Vancouver Region and the SLRD area, including the following:

 Population growth will remain strong in the Metro Vancouver region with an additional 1.2 million people expected by 2041 (approximately new 550,000 households), based on the Metro Vancouver Regional Growth Strategy (Site Economics, p.30).

 Approximately 5% of future population growth in the Metro Vancouver Region is expected to occur on the North Shore, resulting in a 35% increase from 181,000 in 2006 to 244,000 in 2041, based on the Metro Vancouver Regional Growth Strategy (Site Economics, p.30).

 Approximately 40,000 new residents from other countries will settle in the Metro Vancouver Region both this year and next based on figures from the Canadian Mortgage and Housing Corporation (CMHC) (Site Economics, p.62).

 Significant population in the Metro Vancouver region nearing retirement age, most of which owns valuable single detached houses and wish to downsize to smaller units (Site Economics, p.64).

 Strong sustained growth is predicted for the SLRD in the next 30 years, with the population expected to almost double by 2031, based on the Squamish-Lillooet Regional District Growth Strategy (Site Economics, p.35)

 Continued population growth for the Squamish area with an increase in the community`s role as the administrative and commercial center of the SLRD and as a bedroom community for Vancouver as well as Whistler workers (Site Economics, p.64).

While the Site Economics Report does not define a specific study area, the consultant provides annual housing demand estimates for the following areas:

 North Shore area of Metro Vancouver: 700 residential units per year, based on the Metro Vancouver Regional Growth Strategy (Site Economics, p.30).

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 Squamish: The Site Economics Report references two sources for Squamish housing demand: Urban Futures1 forecast of 200-250 new households per year (Site Economics, p.62), and Coriolis Consulting Corp.2 forecast of 180-285 units per year from 2005 to 2016, and 200-340 units per year from 2017 to 2031 (Site Economics, p. 94).

The Site Economics Report assumes that most of the demand for the project will originate from the Metro Vancouver Region, particularly from the North Shore. The Report provides the following demand estimates by unit type for the proposed project over 10 years (Site Economics, p.iv):

Single Family:

 “Metro Vancouver is running out of single family lots except in the extremely distant eastern suburbs of the Fraser Valley. The site’s 110 single family homes would be absorbed very quickly, likely as soon as they can be made available to the market.”

Townhouse:

 “Approximately 2,500 townhouses are built in the Metro Vancouver area each year and that number is expected to grow quickly to 3,000 per year, just as the number of single family homes is declining. It may even climb to 4,000 units per year by 2018.”

 “The subject site could easily absorb 100 units a year and reach build out in 10 years. It requires a small but manageable 3% share of the Metro Vancouver Market.”

Rooftop Townhouses, Lofts, and Apartment Condominiums:

 “Together, these 1,780 units must capture a share of the approximate 10,000 unit per year condo market in Metro Vancouver.”

 “While this is the most challenging component it could easily achieve a 2% market share and be built over a 10 year absorption period. A ten year build out would require that the absorption rate be 175 units be [sic] sold per year or just over 3 per week. There is a provision for this component to require up to 15 years if market acceptance is slower than expected.”

The Site Economics Report also identifies four primary market segments for the Britannia Beach community (Site Economics, p.65):

 “Affluent residents near retirement age or newly retired who live in the Metro Vancouver region. Of those who still work, many of them will have jobs located in downtown Vancouver which is easily accessible from the subject site. These households will be recreationally active and have few children still living at home. They could choose to relocate from their single family detached home to an apartment or townhouse. These types of households want to be located near urban amenities such as Vancouver while being immersed within a natural setting and close to various outdoor recreational activities. The Britannia project provides an ideal location for such. Other locations, such as the Okanagan and Vancouver Island are too remote and travel time and costs too high to be directly comparable.”

1 A Region in Transition Demographic and Housing Contexts for the Future of the Squamish Lillooet Regional District, Urban Futures, 2004. 2 Smart Growth on the Ground Charette for District of Squamish, 2005.

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 “Young Sports-Minded: This is a large group of young people that would like to stay in close proximity to Whistler and Squamish and its recreational amenities, although cannot afford the costly Whistler real estate. The resident profile, which includes some live/work studios, includes some high tech workers as well as artists and sports persons.”

 “Former Whistler Residents and Older Sports-Minded: This is a group of high net worth mature people that would like to stay in close proximity to Whistler and its recreational amenities. They have sold their valuable Whistler home and want to use some of the sale proceeds.”

 “Active Commuters: This is a group that commutes to jobs in the Vancouver area or Whistler. They are typically younger couples that like the active lifestyle in Squamish with its proximity to outdoor sports in all seasons. Fully one third of the Squamish workforce is employed outside the community and many have chosen to live in Squamish for lifestyle or affordability reasons.”

The Report does not provide any quantitative estimates or forecasts of the potential demand from these population segments, or the share of the market that could be captured by the project at the proposed project at Britannia Beach.

3.2 Market Competition and Absorption

The Site Economics Report states that the primary competition for the proposed Britannia Beach Project would come from Furry Creek and the proposed Porteau Cove project.

“The only real competition to the new Britannia community are the two other master planned communities in the area, Furry Creek and Porteau Cove. The development in Squamish is an entirely different type of market, and there is little significant development activity occurring on the North Shore. The established housing in the exiting [sic] historic Britannia Beach/Mine area is of medium quality and very limited quantity” (Site Economics, update, p. 83).

In the same section of the Report, Site Economics estimates absorption of the unit supply at three projects: Furry Creek, Porteau Cove, and the subject project.

“It is estimated that Furry Creek could accommodate another 1,000 housing units and Porteau Cove 1,400 units. Assuming that these 2,400 units are developed over the more compressed 10 year time period as the subject site, this would provide for an annual supply of 240 units from these two projects. As comparison, for the subject site with 3,000 units, the average annual supply would be 300 units over 10 years. This totals potentially 540 housing units annually for the three master planned communities in this area. Under this scenario, the subject site would capture approximately 55% of this market.

This absorption number is much higher than in the past, however given the uniqueness of this area, improved highway, huge market of Metro Vancouver to the immediate south, and market evolving trends, this supply can be reasonably absorbed”. (Site Economics, update, p. 84).

The Site Economics Report does not contain:

 A forecast of total absorption for a defined market area that includes the Britannia Beach project.

 An analysis of the existing and approved/proposed unit supply in the study area, except for the two projects in Electoral Area D (Porteau Cove and Furry Creek).

 An estimate of potential residential market share in the subject project’s competitive context.

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TITLE 4.0 Approach and Study Area

We evaluate the potential market performance of the proposed project at Britannia Beach in these steps:

1. We inventory the potential supply of housing units in the study area. (Section 5.1)

2. We examine three main indicators of demand:

a. recent absorption at other major planned projects in the study area. (Section 5.2.1)

b. recent development trends, including housing starts by type in the study area. (Section 5.2.2)

c. potential demand in the study area based on population and household forecasts. (Sections 5.2.3)

3. We estimate the potential for attracting new market segments as identified in the Site Economics Report. (Section 5.4)

4. We estimate total demand in the study area and then estimate lower and upper bounds on the potential absorption of units at the subject project. (Section 7.0)

5. We examine the market support for the commercial component of the project based on the potential pace of residential development. (Section 8.0)

Our study area for the supply and demand analysis includes the municipalities and settlements located in the Sea-to-Sky corridor3 within approximately 30 km from the subject site. Our study area contains all of the existing or potential development that would be likely to compete to some degree with the Britannia Beach project. The study area includes the following areas:

 The District Municipality of Squamish

 Electoral Area D of the Squamish-Lillooet Regional District (Including settlements of Britannia Beach, Furry Creek, Black Tusk Village, and aboriginal communities).

 The Village of Lions Bay

 The western half of the District Municipality of West Vancouver4

Exhibit 4 shows the study area.

It is important to note that our study area differs significantly from that proposed by Site Economics, which views the Britannia Beach project as an extension of the Metro Vancouver Region. It is our opinion that even if the Britannia Beach area attracts a growing share of Metro demand, projects in our entire study area will compete for shares of this growth.

3 The study area encompasses an unpopulated part of Electoral Area A (located north of Horseshoe Bay along the Sea-to-Sky corridor) which we did not include in the analysis.

4 The western part of West Vancouver is defined as the three census tracts located west of 27th street within the District Municipality’s boundaries.

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Exhibit 4: Study Area (Shaded in Blue)

We did not include other communities of the North Shore in the competitive study area because it is our opinion that the North Shore (other than the western end of West Vancouver) will compete with other parts of the urban Metro Vancouver housing market.

We excluded Whistler from the study area for the following reasons:

 Whistler has enough capacity to accommodate growth for the next 6-12 years if historical absorption trends continue.

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 The Whistler residential market is unique and appeals to a different type of buyer than other offerings in the Sea-to-Sky corridor.

 Commuters interested in the Sea-to-Sky corridor have many options closer to Whistler, including Squamish and Pemberton.

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TITLE 5.0 Evaluation of the Residential Market Performance of the Proposed Concept

In this section, we estimate total residential development capacity in the study area and we look at several indicators of potential residential demand. We use the version of the concept as of November 21, 2012, which totals 3,000 units at build-out in a revised unit mix.

We look at indicators individually in each section and compare them where possible with the developer`s market analysis.

5.1 Development Capacity in the Study Area

5.1.1 Existing Development Capacity and Potential Additional Supply

Based on our review of Official Community Plans (OCPs) in the study area, we estimate that the existing remaining development capacity in the study area is approximately 8,500 multi-family units and 5,700 single family units. Exhibit 5 below shows total development capacity based on current approved plans in the study area.

In order to estimate potential future supply, we reviewed available information about all projects in the study area that are either planned or currently under way. Based on our findings, we estimate that the sum of existing and potential supply is approximately 10,600 multi-family units and 2,100 single family units. It is possible that some of these projects will not develop in the short run. Similarly, it is possible that other projects will be proposed in the future if market conditions are favourable.

Exhibit 5: Estimate of Residential Capacity in the Study Area Based on Current Planning

West Vancouver Total Lions Bay Electoral Area D Squamish (Study Area Only) Total - Study Area Development Capacity1 556 4,320 13,900 4,506 23,282 2 Built & occupied 556 247 6,953 1,330 9,086 Remaining Development Capacity 0 4,073 6,947 3,176 14,196 Proposed units3 0 5,190 6,770 736 12,696

West Vancouver 4,5 6 7 Multi-family Lions Bay Electoral Area D Squamish (Study Area Only) Total - Study Area 1 Development Capacity 61 3,114 6,500 2,656 12,331 2 Built & occupied 61 56 3,546 160 3,823 Remaining Development Capacity 0 3,058 2,954 2,496 8,508 3 Proposed units 0 4,408 5,570 638 10,616

West Vancouver

Single Family Lions Bay Electoral Area D 4,5 Squamish6 (Study Area Only)7 Total - Study Area

Development Capacity1 495 1,206 7,400 1,850 10,951

Built & occupied2 495 191 3,407 1,170 5,263

Remaining Development Capacity 0 1,015 3,993 680 5,688

Proposed units3 0 782 1,200 98 2,080

Exhibit Notes: 1) Based on maximum Official Community Plan densities where available. For Squamish, capacity is to 2031 only, for West Vancouver, we estimated remaining development capacity in the study area assuming 2.5 units would be built per gross acre on

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remaining land below the 1,200 foot contour (a reasonable assumption based on historical densities in recent adjacent development).

2) Based on 2011 Statistics Canada data (The share of occupied single family dwellings to total dwellings was applied to total private dwellings to determine the values used above).

3) Estimate includes all planned, proposed, approved, under construction, and unoccupied units where information is available (includes subject project).

4) Unit mix for Porteau Cove based on the developer’s original proposal in 2005, this may not be the final unit mix.

5) Based on the proposed unit mix presented in the 2003 Britannia Beach Community Visioning Charette, may not be the final unit mix.

6) Based on the unit mix proposed in the OCP (2005).

7) Assume future development in the western portion of the District of West Vancouver will continue with the same unit mix proposed for Rodgers Creek. (This may overestimate multi-family development to some degree).

5.1.2 Competing Projects

We anticipate that Britannia Beach will compete to some degree with development projects in the entire study area, but the primary competition for the proposed project will come from two nearby master planned communities at Furry Creek and Porteau Cove. Furry Creek is a 920 unit master planned community built around an 18-hole golf course. Porteau Cove has remained in the early planning stages since 2005, but the project has the support of the SLRD for up to 1,400 units. Both projects offer many of the same unit types and amenities as the proposed project and have the capacity to add approximately 2,200 units to the market. In addition, Macdonald Development Corp. holds approximately 100 acres of residential land above the historic Britannia Beach town site that could potentially compete with the proposed project in the future. Although the SLRD supports the idea of residential development on the Macdonald Development parcel, no formal plans have been submitted to date.

Secondary competition for the proposed project will come from the District of Squamish and the western half of the District of West Vancouver. Most of the secondary competition will come from Squamish, which has several master planned projects that can add over 4,500 units in the downtown area alone. These proposed projects can potentially deliver the same unit mix and amenities as the proposed Britannia Beach project and have the added benefit of being located in an established community with well developed services, infrastructure, schools, shopping, and employment opportunities. Depending on how the units are priced, the proposed project may also face competition from West Vancouver, where over 700 units are being developed at Rodgers Creek.

Detailed information about competing projects in the study area can be found in the appendix section of the report. Exhibit 6 summarizes the proposed project and its main potential competition.

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Exhibit 6: Remaining Development Capacity at Major Mixed-Use Projects in the Study Area

Downtown Master Planned Britannia Beach Britannia Beach Squamish Communities South North Porteau Cove Furry Creek Oceanfront Lands TOTAL Park Lane and Taicheng Macdonald Concord Burrard District of Developer Development Development Development International Squamish/TBA Corp. Corp. Corp. Holdings Inc. Total development 110 N/A 76 396 0 582 capacity (single family) Total development 2,890 N/A 1,324 194 4,500+ 8908+ capacity (multi- family) Total development 5 Approx 3,000 783-883 1,400 790 4,500+ capacity (all 10,500 + units) Waterfront Some No Porteau Cove Some Some Access Howe Sound, Views Howe Sound Howe Sound Howe Sound Howe Sound Stawamus Chief, Mt. Garibaldi Parks, School, Marina, Parks, Trails, Golf Course, Parks, Parks, Marina, Amenities Boardwalk, not known School, Clubhouse, Boardwalk, shops shops and Viewpoints Boardwalk and services services. Exhibit 6 shows that:

 All of the proposed projects offer views and most offer waterfront access.

 Most offer a mix of amenities.

 With the exception of Furry Creek, most propose a unit mix that is heavily weighted towards multi- family.

 Porteau Cove and Britannia Beach have similar unit mixes.

 Single family units represent only a small share of the proposed units in the projects.

5.1.3 Summary of Residential Development Capacity

Our review of the supply of residential projects proposed and underway and remaining development capacity in the study area suggest that the market has not been constrained by lack of product supply.

 The study area has development land capacity for at least 14,000 additional residential units, including over 11,000 units in Squamish and in the western half of West Vancouver.

 The potential supply of units currently planned or underway in the study area is 12,700 units, including 10,600 multi-family and 2,100 single family units.

5 The OCP allows for 850-1,000 units in Britannia Beach South so the proposed 3,000 unit project will require rezoning and an OCP amendment.

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5.2 Indicators of Absorption by Type of Unit in the Study area

In order to analyze recent development trends in the area, we look at housing starts and development statistics in the study area over the past five years. Housings starts are from the CMHC Housing Now Reports for the BC region. Data for the Electoral Area D has been collected using MLXchange.

5.2.1 Absorption Trends at Major Projects in the Britannia Beach Area

We looked at historical absorption trends in Electoral Area D of the SLRD because we assume that the primary competition for the proposed development will come from nearby developments in this area.

The best available comparable is Furry Creek, which began selling units in 1994. Absorption trends at Furry Creek are outlined below:

 The most recent phase of Furry Creek known as Ocean Crest was built and marketed by Park Lane homes between 2007 and 2010. This phase consisted of 12 luxury single family homes that sold at a rate of about 4 homes per year.

 In 2000, 56 townhouse units were built in the waterfront area of Furry Creek known as Oliver’s Landing. About two thirds of the homes were waterfront and all of the units sold between 2001 and 2003, suggesting that absorption was about 19 units per year.

 Overall, since Furry Creek began marketing in 1994, a total of about 130 units have been built and sold, suggesting absorption for the whole project has been about 7 units per year to date.

In 2004, Macdonald Development Corp. pre-sold 91 single family building lots in Britannia Beach. The estate size lots sold out in four days to builders, investors, and local area residents who closed on the lots in mid-2005. Since 2005, a number of lots have come back to the market; eight are currently listed on the MLS. About 15 single family homes been have been built and occupied in Britannia Beach since 2005, indicating that housing unit absorption (as distinct from lot sales) at the project has been about 2 units per year.

In summary, between 1994 and 2012, approximately 7 to 9 units per year have been absorbed in the immediate area of the proposed project (Electoral Area D). During the period 2001 to 2011 approximately 4 to 5 units per year were absorbed in Electoral Area D, which is consistent with household growth based on Census data for the 2001 to 2011 period. There was a brief burst of more rapid absorption at Furry Creek (Oliver’s Landing) but this did not prompt continued development at this pace. The absorption rate indicated by the experience of these existing projects may have been lower than would be experienced at the subject site due to the following factors:

 Both projects offered a less diverse array of unit types and amenities than is proposed for the subject site and Porteau Cove, although it is noteworthy however that Furry Creek offered a world class golf course, and this could have had an upward influence on absorption.

 These projects are smaller in scale and were started prior to improvement of the Sea-to-Sky Highway.

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5.2.2 Development Trends in the Study Area

There is no single source of historic development statistics in the study area. Exhibit 7 shows statistics that have been assembled using CMHC housing start data available for Squamish and West Vancouver, and MLXchange data for Electoral Area D.

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Exhibit 7: Housing Starts by Dwelling Type 2008 to 2012

Squamish 2012 Annual Unit Type 2008 2009 2010 2011 (YTD Total % Q3) Average Single-family detached 52 22 35 25 18 152 32 26.5% Semi-detached 36 16 2 2 6 62 13 10.8% Row 84 0 27 20 8 139 29 24.2% Apt. & Other (1) 112 15 73 13 8 221 47 38.5% Total 284 53 137 60 40 574 121 100.0% West Vancouver (entire Municipality)

2012 Annual Unit Type 2008 2009 2010 2011 (YTD Total % Average Q3) Single-family detached 112 56 102 119 94 483 102 67.9% Semi-detached 14 0 2 2 12 30 6 4.2% Row 0 0 0 5 0 5 1 0.7% Apt. & Other (1) 33 0 0 0 160 193 41 27.1% Total 159 56 104 126 266 711 150 100.0% Britannia, Furry Creek and Porteau Cove (Elec Area D) 2012 Annual Unit Type 2008 2009 2010 2011 (YTD Total % Average Q3) Single-family detached 8 7 4 6 0 25 5 100.0% Semi-detached 0 0 0 0 0 0 0 0.0% Row 0 0 0 0 0 0 0 0.0% Apt. & Other (1) 0 0 0 0 0 0 0 0.0% Total 8 7 4 6 0 25 5 100.0% Total Starts (Study Area + all West Vancouver) 2012 Annual Unit Type 2008 2009 2010 2011 (YTD Total % Average Q3) Single-family detached 172 85 141 150 112 660 139 50.4% Semi-detached 50 16 4 4 18 92 19 7.0% Row 84 0 27 25 8 144 30 11.0% Apt. & Other (1) 145 15 73 13 168 414 87 31.6% Total 451 116 245 192 306 1310 276 100.0%

Estimated Total Starts in Study Area (i.e. excluding the eastern half of West Vancouver) 2012 Annual 2008 2009 2010 2011 (YTD Total Average Q3)

Total (2) 332 74 167 98 107 777 164 Source: CMHC Housing Now Reports BC Region 2010-2012; ** MLXchange

Exhibit Notes: 1) The category Apartment and other includes all dwellings other than those described above, including structures commonly known as stacked townhouses, duplexes, triplexes, double duplexes and row duplexes. 2) Coriolis estimate. We assume based on current development activity and population ratios that about 25% of the housing starts in the District Municipality of West Vancouver were located in the western part of the municipality (i.e. within the study area).

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Exhibit 7 shows that:

 Housing starts in the study area averaged about 164 units per year during 2008 to 2012.

 Single detached homes are the most common unit type and have accounted for approximately 50% of starts over the past five years.

 Apartment-type units accounted for 32% of starts during 2008 to 2012.

 Townhouse and semi-detached units represented 18% of housing starts during 2008 to 2012.

 During 2008 to 2012(Q3) there were only 25 housing starts in Electoral Area D. This represents slightly more than 3% of the estimated total for the study area.

5.2.3 Population and Household Growth 2001-2011

Exhibits 8 and 9 show population and household growth in the study area during 2001 to 2011.

Exhibit 8: Population Growth 2001 to 2011

Average Annual Growth (% per Total Population Population Growth (Actual) year) 2001- 2006- 2001 2006 2011 2001-11 2001-06 2006-11 2001-11 06 11 Squamish - DM 14,247 14,949 17,158 702 2,209 2,911 1.0% 2.80% 1.90% Electoral Area D 750 839 836 89 -3 86 2.3% -0.1% 1.10% Village of Lions Bay 1,379 1,328 1,318 -51 -10 -61 -0.8% -0.2% -0.50% West part of West 13,098 13,508 13,707 410 199 609 0.6% 0.3% 0.50% Vancouver (2) Total Study Area 29,474 30,624 33,019 1,150 2,395 3,545 0.77% 1.52% 1.14% Source: Statistics Canada, Census of population 2001, 2006 & 2011 Exhibit 9: Household Growth 2001 to 2011

Household Growth Average Annual (% per Average annual Households Total private households Household Growth (Actual) year) (units/year)

2001- 2006- 2001 2001- 2006- 2001- 2001 2006 2011 2001-2011 06 11 -11 06 11 11 Squamish - DM 5,150 5,625 6,520 475 895 1,370 1.8% 3.0% 2.4% 137 Electoral Area D 335 360 365 25 5 30 1.4% 0.3% 0.9% 3 Lions Bay 520 517 507 -3 -10 -13 -0.1% -0.4% -0.3% -1 West part of West 4,660 4,908 5,025 248 117 365 1.0% 0.5% 0.8% 37 Vancouver (2) 10,66 12,41 1.53 Total Study Area 11,410 745 1,007 1,752 1.36% 1.71% 175 5 7 % Source: Statistics Canada, Census of population 2001, 2006 & 2011 Exhibit Notes: 1) Data excludes census undercounts. 2) The western part of West Vancouver is defined as the three census tracts located west of 27th street.

Exhibit 9 shows that:

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 The entire study area grew at a rate of about 175 households per year during the period 2001 to 2011.

 With an average of 137 new households per year, the District Municipality of Squamish captured 56.3% of the growth in the SLRD6 and almost 80% of growth in the study area.

 Annual household growth averaged 3 units per year in the Electoral Area D during 2001 to 2011.

 The west part of West Vancouver grew by 37 households per year, capturing about 20% of the growth in the study area during 2001 to 2011.

 The Village of Lions Bay is not growing.

Household growth and housing starts have been very similar (164 housing starts per year compared to 175 households per year on average).

5.2.4 Population and Household Forecasts 2012-2031

There are no forecasts of population or household growth for the study area so we have looked at growth rates indicated in available forecasts for the SLRD, the West Vancouver Local Health Area, North Vancouver Local Health Area, and Metro Vancouver. These forecasts for the period 2012 to 2031 are shown in Exhibit 10.

Exhibit 11 shows a forecast of potential growth in the number of study area households based on forecasts prepared by others.

6 Based on data from census, Statistics Canada.

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Exhibit 10: Regional Population and Household Growth Forecasts 2012-2031

Ave Annual Growth Total Population Projected Households Rate 2011-21 (%/year) Average 2011-21 annual HH 2021 2011 2021 2011 (Actual) Pop HH Growth per (Forecast) (Actual) (Forecast) year (# HH) SLRD 41,379 50,581 16,228 20,542 2.03% 2.39% 436 West Vancouver 52,949 55,440 21,535 23,582 0.46% 0.91% 205 Bowen LHA North Shore (1) 195,672 209,375 79,273 88,855 0.68% 1.15% 961

Metro Vancouver 2,404,911 2,739,495 940,250 1,104,967 1.31% 1.63% 16,500

Ave Annual Growth Projected Population Projected Households Rate (%) Average annual HH 2021-31 2021 2031 2021 2031 Growth per Pop HH (Forecast) (Forecast) (Forecast) (Forecast) year (# HH)

SLRD 50,581 58,686 20,542 23,945 1.50% 1.54% 341

West Van LHA 55,440 60,665 23,582 25,865 0.90% 0.93% 228

North Shore (1) 209,375 223,728 88,855 95,808 0.67% 0.76% 776

Metro Vancouver 2,739,495 3,094,874 1,104,967 1,257,230 1.23% 1.30% 15,255 Source: BC Stats Sub-Provincial Population Projections - P.E.O.P.L.E. 2012 (Sep 2012) Exhibit Notes: 1) Includes the West Vancouver – Bowen Island and North Vancouver Local health Areas. 2) 2011 is used as the baseline to ensure consistency with the 2011 census data.

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Exhibit 11: Forecast of Study Area Households 2012-2031

West part of the DM of West DM of Squamish (1) Electoral Area D (2) Total Study Area (4) Vancouver (3)

Ave. Annual Ave. Annual Ave. Annual Ave. Annual Year Total Growth Total Growth Total Growth Total Growth Households (#HHs) Households (#HHs) Households (#HHs) Households (#HHs) 2012 6,737 368 5,071 12,176 2013 6,960 371 5,117 12,448 2014 7,189 375 5,164 12,727 2015 7,425 378 5,211 13,013 2016 7,666 381 5,258 13,306 240-250 3-5 45-50 290-300 2017 7,914 384 5,306 13,605 2018 8,168 388 5,355 13,910 2019 8,427 391 5,404 14,221 2020 8,691 394 5,453 14,538 2021 8,960 398 5,503 14,861 2022 9,138 401 5,553 15,092 2023 9,319 405 5,603 15,327 2024 9,503 408 5,655 15,565 2025 9,689 412 5,706 15,807 2026 9,879 415 5,758 16,052 190-200 4-5 50-55 240-250 2027 10,071 419 5,811 16,301 2028 10,267 422 5,864 16,553 2029 10,465 426 5,917 16,809 2030 10,667 430 5,971 17,068 2031 10,871 433 6,026 17,330 Exhibit Notes: 1) Assumes 56% of future growth in the SLRD occurs in Squamish, as it was the case between 2001 and 2011. The forecast uses an annual growth rate of 3.23% between 2011 and 2021 and 1.95% between 2021 and 2031, based on projections for the SLRD prepared by BC Stats Sub-Provincial Population Projections - P.E.O.P.L.E. 2012 (Sep 2012). 2) Assumes an annual growth rate of 0.9%, which is consistent with the growth rate for Electoral Area D between 2001 and 2011 based on census data. 3) Assumes annual growth rates of 0.91% between 2011 and 2021 and 0.93% between 2021 and 2031 based on projections prepared by BC Stats Sub-Provincial Population Projections - P.E.O.P.L.E. 2012 (Sep 2012) for the West-Vancouver Bowen Island LHA from 2011 to 2031. 4) Assumes no growth in the Village of Lions Bay during this period. Exhibit 11 shows that:

 Total annual household growth in the study area is projected to be 290-300 units during 2012 to 2021 and 240-250 units during 2022 to 2031. We note that this forecast, based on BC Stats figures, calls for a more rapid pace of development than has been experienced in the study area in the past, principally because of the expected increase in the rate of growth in Squamish.

 Squamish is projected to continue to capture over 80% of the growth in the number of households in the study area.

 Electoral Area D is projected to continue to grow modestly during this period, averaging 3-5 new households per year.

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 The west part of West Vancouver is projected to continue to capture about 20% of household growth in the study area.

5.2.5 Summary of Indicators of Residential Absorption in the Study Area

Following are key points drawn from our review of indicators of residential absorption in the study area including housing starts, recent household growth indicated by Census data, forecasts of potential household growth, and absorption at major residential projects:

 Housing starts averaged 164 per year in the study area, 50% of which were single-family units.

 Household growth between 2001 and 2011 averaged 175 per year.

 Growth in the study area over the past 10 years has mainly been concentrated in Squamish (80%) and the western half of West Vancouver (18%). Less than 2% of the growth has occurred in the Electoral Area D.

 Between 1994 and 2012, approximately 7 to 9 units per year were absorbed at development projects in the immediate area of the proposed project (Electoral Area D). During the period 2001 to 2011 approximately 4 to 5 units per year were absorbed in Electoral Area D, which is consistent with household growth based on Census data for the 2001 to 2011 period.

 Existing forecasts of household growth in the study area suggest potential future household growth of:

o 290 to 300 HH per year, including 3 to 4 in the Electoral Area D during 2012-2021.

o 240 to 250 HH per year, including 4 to 5 in the Electoral Area D during 2022-2031.

o Total increase of 5,300 to 5,500 HH over 20 years (2012-2031), including 60 to100 in Electoral Area D.

These indicators do not point toward any increase in the pace of development in Electoral Area D, so they provide a very conservative perspective based solely on past trends and forecasts by others that are inherently based on a continuation of these trends. We explore the potential for more rapid growth in Section 5.4.

5.3 Comparison of Development Capacity with Potential Absorption

The study area has capacity for at least 14,000 additional residential units, with approximately 12,700 of these units currently being planned or underway. Projects planned and underway include approximately 10,600 multi-family and 2,100 single family units.

If absorption averages 240 to 300 units per year, the total capacity figure of 14,000 units represents a supply of approximately 50 to 60 years. The projects currently planned or underway represent a supply of approximately 40 to 50 years.

The situation is even more challenging for proposed development in the study area when unit counts are categorized by housing type. If multifamily absorption continues to account for 50% of absorption, the current inventory of 10,600 multifamily units planned or underway represents a supply of approximately 70

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TITLE to 90 years. If single family absorption continues to account for 50% of absorption, the current inventory of 2,100 single family lots planned or underway represents a supply of approximately 14 to 18 years.

If residential absorption patterns continue to be consistent with recent trends and currently available forecasts, the projects in the Britannia Beach area are facing very long absorption periods and are too heavily weighted to multifamily product. For the Britannia Beach projects to achieve more rapid absorption, it will be necessary for them to dramatically increase the study area’s ability to pull residential demand from new market segments. We examine this potential in the next section.

5.4 Potential for Drawing New Demand to the Study Area

Given the relatively low anticipated absorption indicated for the study area by our review of indicators in the previous section of this report, the project will have to attract demand from other locations in the region in order to achieve a more rapid absorption rate. We look at indicators of the size of the four primary target markets identified in the Site Economics Report:

 Active commuters to Vancouver and Whistler

 Affluent residents near retirement age from Vancouver

 Young sports-minded people

 Former Whistler residents and old sports-minded people

We examine each of these submarkets and make assumptions as to what share could potentially be captured by the proposed project at Britannia Beach. We use deliberately optimistic or aggressive assumptions about the study area’s ability to attract potential absorption from these segments in order to give the subject project the benefit of any doubt and to minimize the possibility of underestimating potential absorption from each of the identified new segments.

We also make the following assumptions in this part of the analysis:

 The population from the four segment groups has not already been accounted for in the previous absorption forecasts for the study area.7

 The population of the western half of West Vancouver is excluded because it has already been factored into the previous absorption analysis for the study area.

5.4.1 Active Commuters

We define this segment as employed labour force with a commute distance of over 50 km from place of residence to a place of work at Whistler or in central Vancouver. We assume commuters travelling to places of work east or south of central Vancouver would not consider the subject site to be a reasonable substitute to their existing residential location.

7 We assume that these ``migration shifts`` are not already factored in population and household projections for municipalities and areas of the study area.

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Exhibit 12 shows that as of 2006 only about 53% of the employed labour force in Squamish/ Electoral Area D worked in the Squamish area, while over 47% were active commuters, including about 27% to Whistler and Vancouver.

Exhibit 12: Squamish and Whistler Employed Labour Force by Place of Work in 2006

Area Number % Distance to work (Km) Squamish and Electoral Area D (includes work at home) 4,585 53.2% 0-10 Whistler 1,400 16.2% 60-70 Metro Vancouver 955 11.1% 55-90 No fixed workplace address / overseas 1,680 19.5% N/A Total 8,620 100.0% N/A Source: 2006 Census, Statistics Canada

It is our opinion that demand for housing at the subject project from Whistler commuters is unlikely to rise significantly in the future as the resort municipality approaches its maximum employment development capacity. A large proportion of Whistler workforce lives in non-market workforce housing. Furthermore, a large number of service jobs in Whistler are low-paid and/or seasonal with many occupied by young temporary migrant workers. Growth in the number of commuters, if any, would most likely be linked to employment in central Vancouver.

We assume that only current long-distance commuters to central Vancouver would be willing to consider relocating to the Britannia Beach project. There is no evidence to suggest that current short-distance commuters to Vancouver would be willing to increase their commute time to live in the proposed project.

Exhibit 13: Long Distance Commuters Employed in Central Vancouver

Number of >50 km Share of Population commuters to that Moves each Year Share to Move to New HH per year to the central Vancouver (1% of total per year) North Shore (5% of study area (100% of Period (1) (2) total movers) (3) North shore) (4) 2012-2021 8,377 84 4 4 2022-2031 9,721 97 5 5 Source: 2006 Census, Statistics Canada Exhibit Notes: 1) The data is from the 2006 Census, Statistics Canada, Topic-based tabulations: Commuting flows by census Subdivisions by place of work and place of residence. Long distance commuting is to the City of Vancouver from the following communities: Langley, White Rock, Abbotsford, Mission, Chilliwack, Bowen Island, Whistler, Sunshine Coast, and Gibsons. Distance is calculated on the most direct route using the road network and/or the ferry. The number of commuters is projected based on the 2006 census figure assuming an annual growth rate of 1.5% over the 2012-2031 period. 2) Based on the percentage of BC residents who declared having moved to another municipality between 2001 and 2006 in the 2006 census. 3) Based on the share of growth of the Metro Vancouver Region expected to occur on the North Shore according to the Metro Vancouver Regional Growth Strategy. 4) Assumes 1 person equals 1 household.

Exhibit 13 shows that the potential for attracting long-distance commuters is limited to about 4 to 5 units per year, assuming that 100% of these additional households relocating to the North Shore are attracted to the study area. This is an optimistic assumption as commuting data for Metro Vancouver suggests that less than 8% of work trips involved a commuting distance of 25 km or more. As well, the share of long commute

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TITLE trips has tended to decline over the past few years8, suggesting that a decreasing number of commuters will be willing to locate far away from their workplace in the future.

This analysis suggests that long-distance commuters are likely to constitute a very small target market and cannot be expected to have a significant impact on the absorption rate for the subject project. It is our opinion that many long-distance commuters will prefer locating in communities with a wide range of existing services (schools, hospitals, public transportation) and amenities (retail, recreational facilities, etc.) as well as with diverse and affordable housing options. In this case, Squamish and other communities on the North Shore would be the most likely candidates for the residential location of commuters in the area.

5.4.2 Affluent Metro Vancouver Residents Near Retirement Age

We use a similar approach to determine the potential for attracting affluent Metro Vancouver residents nearing retirement. We look at the percentage of residents between the age of 50 and 69 who would be likely to relocate to another municipality of the Metro Vancouver Region sometime during the next 20 years. We use the optimistic assumption that all residents near retirement age are homeowners and would be willing to use the equity from their primary residence to purchase a home in the study area.

Exhibit 14: Metro Vancouver Population Aged 50 to 69, and Likely to Relocate

Metro Vancouver Share of Population that Share to Move to North New HH per year to Period Population 50-69 Moves each Year (1% of Shore (5% of total the study area (25% of years old (1) total per year) (2) movers) (3) North Shore) (4) 2012-21 724,196 7,242 362 36 2022-31 774,604 7,746 387 39 Source: BC Stats, P.E.O.P.L.E. 2012 population projections by age group Exhibit Notes: 1) The population figure by age group is from the BC Stats Sub-Provincial Population Projections - P.E.O.P.L.E. 2012 for the Vancouver Census Metropolitan Area. Figures are for the last year of the period (2021 or 2031). 2) Based on the percentage of BC residents who declared having moved to another municipality between 2001 and 2006 in the 2006 census. 3) Based on the share of growth of the Metro Vancouver Region expected to occur on the North Shore according to the Metro Vancouver Regional Growth Strategy. 4) Assumes 2.5 persons per household which is consistent with average household size in the Vancouver Census Metropolitan Area in the 2011 census. Exhibit 14 shows that even using very aggressive assumptions, the calculated potential absorption from Metro Vancouver residents nearing retirement age is about 35 to 40 units per year for the next 20 years. If the proposed new project at Britannia Beach is able to attract half of that potential demand (which is optimistic), this market segment would represent a maximum of about 18 to 20 units of additional absorption per year.

It is our opinion that a majority of residents nearing retirement age and willing to relocate outside of the Metro Vancouver Region will elect to locate in communities with a wide array of services including retail, health care, banking, and public transit. Also, there are several established communities with suitable housing products to choose from throughout the region, including in Squamish, Pemberton and Whistler.

8 2006 Census Bulletin #8 Commuting in Metro Vancouver – Journey to Work, Metro Vancouver PAGE 25

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5.4.3 Former Whistler Residents and old Sports-Minded

Exhibit 15: Former Whistler Residents

Share of Population that New HH per year to Period Total population of Moves each Year (1% of study area (100% of Whistler (1) total per year) (2) movers) (3) 2012-21 11,201 112 49 2022-31 12,471 125 54 Source: 2011 Census, Statistics Canada Exhibit Notes: 1) Figures are population forecasts based on the annual growth rate in the Resort Municipality of Whistler between 2001 and 2011 (1.2% annually). Figures are from the 2006 and 2011 census, Statistics Canada. Population figures are for the last year of the period (2021 or 2031). 2) Based on the percentage of BC residents who declared having moved to another municipality between 2001 and 2006 in the 2006 census. 3) Assumes 2.3 persons per households which is consistent with the average household size in Whistler in the 2011 census. Exhibit 15 show that even using the aggressive assumption that 100% of the people moving from Whistler could be attracted to the study area, the potential absorption from this segment amounts to about 50 to 55 units per year of potential absorption. If the subject project attracts half of this, which is again an aggressive assumption, this market segment would represent a maximum of about 25 to 27 units of additional absorption per year for the project.

5.4.4 Young Sports-Minded

We use the population of Greater Vancouver between 30 and 40 years old as an indicator for potential demand from this segment as shown in Exhibit 16.

Exhibit 16: Metro Vancouver Population Aged 30 to 40 and Likely to Relocate

Population aged Annual Share of moving Share to Move to North New HH per year to Year between 30 and 40 population (1% of total Shore (5% of total study area (25% of years old (2) per year) (1) movers) (3) North Shore) (4) 2012-21 444,373 4,444 222 22

2022-31 439,180 4,392 220 22 Source: BC Stats, P.E.O.P.L.E. 2012 population projections by age group Exhibit Notes: 1) Based on the percentage of BC residents who declared having moved to another municipality between 2001 and 2006 in the 2006 census. 2) The population figure by age group is from the BC Stats Sub-Provincial Population Projections - P.E.O.P.L.E. 2012 for the Vancouver Census Metropolitan Area. Figures are for the last year of the period (2021 or 2031). 3) Based on the share of growth of the Metro Vancouver Region expected to occur on the North Shore according to the Metro Vancouver Regional Growth Strategy. 4) Assumes 2.5 persons per household which is consistent with average household size in the Vancouver Census Metropolitan area in the 2011 census. Even using the optimistic assumption that 100% of the Metro Vancouver population in this age group is “sport-minded”, Exhibit 15 shows that potential absorption from this market segment would be a maximum of about 20 units per year in the study area over the next 20 years. Assuming a high capture rate of 50%, additional absorption for the project would be about 10 units per year.

It is our opinion that the young sport-minded would more likely to choose to live closer to Vancouver (i.e. in communities on the North Shore) as they value shorter commute times, access to entertainment venues,

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TITLE and proximity to existing public services, particularly schools. Affordability is also a key variable for this market segment. With stricter mortgage rules and potentially higher interest rates in years to come, a large share of this population segment will likely remain in the rental market or relocate to areas with more affordable housing options. Again, Squamish would be a strong candidate for households willing to relocate to this area.

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TITLE 6.0 Summary of Potential Residential Absorption in the Study Area

Exhibit 17 summarizes potential residential absorption in the study area during 2012-2031. These figures likely represent a high estimate of potential study area absorption because they have been constructed using aggressive and optimistic assumptions that intentionally favour the study area.

Exhibit 17: Potential Study Area Absorption 2012-2031

Total Potential Annual Absorption (in units) 2012-2031 Study area Absorption from Forecasted Household Growth 240-300 Potential Additional Absorption from New Segments (2) 111-120 Active Commuters 4-5 Affluent Residents nearing retirement from Vancouver 36-39 Former Whistler residents and old sports-minded 49-54 Young sports-minded from Vancouver 22 Total Households per year 2012-2031 351-420 Exhibit Notes: 1) The table summarizes demand presented in Exhibits 11, 13, 14, 15, and 16. 2) Estimates of potential absorption from new segments can be characterized as being very optimistic based on using very aggressive assumptions.

If absorption averages 350 to 420 units per year, the total study area capacity figure of 14,000 units represents a supply of approximately 30 to 40 years. The projects currently planned or underway represent a supply of approximately 30 to 35 years.

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TITLE 7.0 Upper and Lower Estimates of Absorption at the Proposed Project

We have prepared two scenarios for potential absorption at the subject project (South Britannia). The higher scenario (Scenario 2) should be considered very optimistic. Following is a summary of the assumptions used to generate each scenario.

Scenario 1: Lower - Assumptions:

 The three master-planned projects in the study area (Furry Creek, Porteau Cove, and Britannia Beach) capture 100% of the growth of Electoral Area D and 10% of the growth from Squamish and the West side of West Vancouver.

 The three projects capture 50% of the demand from the four new market segments (i.e. 50% is captured by Squamish or the west side of West Vancouver).

 All three master planned projects move forward and each captures a third of the total absorption for master-planned projects.

Scenario 2: Higher - Assumptions:

 The master planned projects capture 100% of the growth of Electoral Area D and 25% of the growth from Squamish and the west side of West Vancouver.

 The three projects capture 100% of the demand from the four new market segments (i.e. none is captured by Squamish or West Vancouver).

 Only Britannia Beach and Furry Creek move forward (i.e. Porteau Cove does not) and the demand is shared equally between the two projects – 50% each.

Exhibit 18: Annual Absorption for Master-Planned Projects in the Study Area and for the South Britannia Project

Total Annual Household Absorption at Total Annual growth in the Absorption by Master-Planned Absorption at study area New Segments Projects South Britannia Scenarios Year (HH/year) (units/year) (units/year) Project (Units) 2012-21 30 56 85 28 Scenario 1 - Lower 2022-31 25 60 85 28 2012-21 74 111 185 93 Scenario 2 - Higher 2022-31 63 120 182 91

At the lower absorption rate of 30 units per year, the subject project would require a build-out period of 100 years. Under the optimistic scenario at 90 to 95 units per year, the subject project would build out over 30 to 35 years.

These absorption estimates assume that the unit mix can be adjusted to match the market’s preference for single family or multifamily units. The current proposed mix is weighted far too heavily to multifamily units which would make it difficult to achieve the absorption rates shown in Exhibit 18.

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TITLE 8.0 Evaluation of Commercial Development Potential Based on Market Indicators

The subject project at Britannia Beach has a proposed mix of commercial uses that includes retail, service, office, and hotel uses. We have limited our review to the retail and service component of the proposal.

8.1 Developer’s Evaluation of Commercial Development Potential

The Site Economics Report identifies a trade area for the subject project’s retail and service commercial component that includes only Britannia Beach and Furry Creek. The Report’s analysis of retail development potential looks at supermarket and “other” retail.

“Other” Retail

The Report uses annual per capita retail spending data from Statistics Canada to estimate demand for other retail space in the trade area. Site Economics estimates that the typical resident spends approximately $9,859 per year on retail items in 2011 (excludes spending on services, auto-related, and supermarkets). This figure is then multiplied by the total trade area population to yield an estimate of retail expenditures.

Site Economics assumes the trade area population was about 3,000 in 2011 and expects it will grow by 300 households per year between 2011 and 2021. With an average of 2 people per household, the Report estimates that the trade area would reach 9,000 people by 2021. Based on per capita retail spending and forecasted population growth, Site Economics calculates retail expenditures of $60,503,267 by 2021 assuming per capita retail spending grows at a rate that is slightly higher than inflation. Based on this data, the Site Economics Report concludes that there is ample demand for retail space within the trade area.

Supermarket

Site Economics provides a more detailed analysis for supermarket demand in the study area. Statistics data in the Report shows per capita spending by BC residents in supermarkets was $2,307 per person per year in 2011, and forecasts this to grow to $2,425 per year by 2021. Based on these figures and the population forecast, Site Economics concludes that there will be about $21,826,186 of supermarket spending in the trade area by 2021. At a productivity rate of $450 per square foot, Site Economics suggests that the proposed development could support a 25,000 Sq.ft. of supermarket by about 2018 or 2019 and that expansion may be warranted after 2026 by which time the Report assumes the project would be built out. However this conflicts somewhat with the statement ...“according to the attached analysis, by 2021 the demand for a supermarket will equal 50,000 sq.ft. and the subject site would only require 50% market share, excluding inflow and outflow sales” (Site Economics, p. 73).

With respect to competition, the Site Economics Report states “by far, the most important competition for the subject site are the three Squamish supermarkets, Save On Foods, Extra Foods, and Nester’s” (Site Economics, p. 70).

Analysis Not Included in Site Economics Report

The Site Economics Report does not provide:

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 Information about productivity rates to allow the estimates of expenditures on “other” retail to be converted into estimates of supportable floor area. It also does not calculate supportable retail floor area (non-supermarket, non-auto-related).

 A detailed demand analysis for local-oriented services.

 Information about trade area leakage from the proposed project to Squamish, although Site Economics indicates that Squamish will be the most competitive market for proposed retail space at the development. Site Economics also states that: “Metro Vancouver is only a short drive away and residents of both the subject site and Squamish would do at least a quarter to a third of all their shopping in the Metro Vancouver area.” (Site Economics, p. 69)

 Information about competition from other proposed projects in the defined trade area.

8.2 Evaluation of Supportable Retail/Service Potential

Our analysis of retail and service floor space demand by 2021 uses the trade area defined by Site Economics (i.e. Britannia Beach and Furry Creek). Using the latest Census data, we estimate that in 2011, the trade area had a population of 469 people. In order to estimate the trade area population by 2021, we used the same low and high scenario forecast methodology used for the three master-planned communities outlined in Section 7 of this report. Based on our forecast, the trade area will have a population of 1,888 to 5,094 people by 2021 if we assume 2.5 people per household (See Exhibit 19 for details on this forecast).

The trade area population is too small to support regionally-oriented retail and service demand, so this type of demand will be exported to Metro Vancouver and Squamish. We assume the trade area will only capture a share of local-serving retail and service demand. Local-serving uses include grocery stores, pharmacies, branch financial institutions, personal services (e.g. hair salons, dry cleaners), and food/beverage operations. Typically, a large neighbourhood trade area will retain at least 80% of this potential, with some leaking out to other locations for various reasons (e.g. shopping at chain stores not represented in the local area or spending near place of employment). However, for small populations, there is not enough critical mass to support a full roster of convenience retail and service uses. Small, developing trade areas retain only a small share of spending potential because residents must travel outside the immediate trade area to find some of the goods and services they need. We estimate that it takes about 10,000 people to be able to retain the maximum share of local oriented potential because this population threshold is needed to support a large full-line supermarket. Based on our forecast of population, we expect the trade area to export as much as 75% of its local-oriented retail and service demand to nearby areas (Squamish in particular).

Studies show that there is approximately 20.7 sq.ft. per capita of locally-serving retail and service floor space in Metro Vancouver9. If we assume that the trade area population can support 20.7 sq.ft. of locally oriented floor space, the trade area population could support between about 39,100 and 105,450 sq.ft. of floor space by 2021 if inflow is excluded. Assuming the trade area captures 25% of that total (which is optimistic), and that 75% leaks out to other locations, this would warrant between 9,775 and 26,361 sq.ft. of supportable retail and service floor space in the trade area by 2021. Exhibit 19 summarizes our estimates of

9 Based on empirical evidence of the actual distribution of locally-serving retail and service floor space in the Metro Vancouver Region.

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TITLE supportable retail and service floor space in the trade area by 2021 based on the two scenarios of absorption prepared in section 7.0.

Exhibit 19: Supportable Retail and Service Floor Space in the Trade Area by 2021 Total Total Locally-Oriented Retail and Service Estimated population Absorption Population Retail and Service Floor Space Likely Total in the in the Growth Floor Space to be Supported Scenario Population Trade Trade Area 2011-2021 Supportable by in the Trade Area by 2021 Area in 2012-2021 (3) Trade Area Pop. (i.e. 25% Share). (4) 2011 (1) (Units) (2) (sq.ft.) (5) (sq.ft.) (6) Scenario 1 - Lower 469 567 1,417 1,886 39,033 9,758 Scenario 2 - Higher 469 1,850 4,625 5,094 105,446 26,361 Exhibit Notes: 1) The total population in the trade area is the sum of the population of Britannia Beach and Furry Creek in 2011 and is from the 2011 census, Statistics Canada. 2) The two scenarios are consistent with those presented in Exhibit 18. Scenario 1 assumes that two thirds of absorption at the three master planned projects is captured by Britannia Beach and Furry Creek and one third by Porteau Cove. Scenario 2 assumes that Porteau Cove does not go ahead, and Britannia Beach and Furry Creek capture 100% of absorption by 2021. 3) Based on the absorption rates projected at the Britannia Beach and Furry Creek projects and assumes 2.5 people per unit. Assumes the projects were completed in 2012. 4) Sum of the total population in the trade area in 2011 and the estimated number of new residents projected between 2011 and 2021. 5) Assumes 20.7 Sq. per capita of total supportable locally-serving retail and service floor space in the trade area by 2021. 6) Assumes 25% of total supportable locally-serving retail and service floor space is retained in the trade area and 75% is leaked to other locations (i.e. Squamish and the Metro Vancouver Region). The figure excludes inflow. It is important to note that the project could face competition from both Britannia North and Furry Creek: 50,000 sq.ft. of retail and service floor space has been proposed for the historic town site in Britannia Beach and Furry Creek could offer retail competition in the future.

Our estimate of retail floor space supportable in the trade area is materially different from the Site Economics estimate for two main reasons:

 2011 Population: Site Economics estimates that the trade area’s base population in 2011 is 3,000. This figure is not sourced in the report and it is significantly higher than the estimate of 469 based on the Statistics Canada Census population of Furry Creek and Britannia Beach.

 Site Economics assumes that the trade area will grow by 600 people per year; this is much higher than our assumed growth rate of about 142 to 462 people per year10.

Overall, we anticipate that trade area demand would not be sufficient to support a wide array of businesses, until the long term future when the trade area population is large enough. In the short term (say by 2021 assuming development commences in 2013), the proposed project could support small convenience retail and service businesses such as a convenience store, gas station, café, or salon. In our opinion, there is unlikely to be sufficient support for a full-line supermarket or pharmacy at the site until well after 2021.

10 Based on the trade area’s share of the projected growth for the three master planned projects (2/3 of the growth from Porteau Cove, Furry Creek, and Britannia Beach in Scenario 1 - Lower and 100% Scenario 2 - Higher). Assumes 2.5 people per household.

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TITLE APPENDIX: Study Area Development Projects

This section provides a brief description all projects that are under construction, approved, or proposed for the Study Area.

West Vancouver: Rodgers Creek British Pacific Properties is currently developing a 736 unit master planned community known as Rodgers Creek. The Rodgers Creek development encompasses approximately 215 acres of land west of Whitby Estates and above the upper levels highway in the western part of West Vancouver. The developer is currently marketing the first phase of luxury single family homes and has received approvals to develop the first phase of multifamily units. The unit mix includes 518 apartments, 98 single family homes, and 120 ground-oriented attached units.

Porteau Cove: Porteau Cove Concord Pacific is proposing the development of a mixed-use community which includes up to 1,400 units of residential in Porteau Cove. The proposal includes a village centre with some commercial space and mix of housing types that range from single family homes at a density of 10-15 units per hectare to terraced apartments at a density of 45-100 units per hectare. When initially proposed in 2005, the unit mix included 76 single family units, 510 apartment units, and 814 attached units. The proposal is supported by the Squamish-Lillooet Regional District, but remains in the early planning stages.

Furry Creek: Furry Creek In 1991, Tanac Land Development Corp. began developing Furry Creek, a 1,036 acre master planned community that can accommodate up to 920 homes. The residential component of Furry Creek is built around a world class 18-hole golf course that was completed before development of the residential component started. The first single family homes at Furry Creek began development in 1994, followed by the first phase of townhouses in 2000. To date, about 74 single detached upland homes and 56 two and three storey townhomes in the waterfront area have been sold, indicating that absorption is about 7 units per year for the whole project. After the developer ran into financial difficulties, Burrard International Holdings Inc. acquired the Furry Creek golf course and clubhouse in 1999 and the remaining oceanfront lands at Furry Creek in 2002. Burrard International’s remaining waterfront lands can accommodate another 194 multifamily units in the future. In 2003, Park Lane homes acquired Tanac Land Development Corp. and will continue single family development on the remaining upland Furry Creek property. Housing in Furry Creek is built to a high standard and many homes have views of Howe Sound, or back onto the Furry Creek golf course. Residents enjoy amenities that include a waterfront boardwalk, clubhouse (pool, fitness etc.), and reduced membership costs to the golf course and restaurant. Parklane and Burrard International are not actively marketing any new homes in Furry Creek at this time.

Britannia Beach: Britannia Beach Britannia Beach is a 440 acre single family subdivision located in Britannia Beach North. Macdonald Development Corp. acquired the property in 2003 out of foreclosure and began selling the first phase of 91

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TITLE lots in August 2004. The initial phase of lots was priced between $174,900 and $360,000 per lot and range in size from about 0.15 acres to about 10 acres. Many of the new lots in Britannia Beach have excellent views of Howe Sound. All of the initial lots in the development sold out 4 days, but to date, only about 15 new homes have been built. Macdonald Development Corp. owns an additional 100 acres of less accessible land to the north of the initial phase which it plans to develop in the future. The OCP for Britannia Beach North allows for 1,000 units, but the developer anticipates that the project will be built out to a much lower density. Macdonald Development Corp. has also submitted a proposal to the SLRD to develop 50,000 sq.ft.of commercial space in the Britannia Beach town area, but the project has been on-hold since the economic downturn of 2008.

Squamish: Squamish Oceanfront Development Lands The Squamish Oceanfront Development Lands are composed of 10 legal parcels that cover 59.1 acres of development land and 44 acres of fee simple water lots on Howe Sound in downtown Squamish. The site is envisioned as a future mixed-use urban village and can accommodate approximately 2,057,000 square feet of buildable density, including 1,205,000 square feet of residential floor space, which translates into about 1,100 units. Amenities such as a boardwalk, oceanfront park, and marina will all be part of the project. The property is a former industrial brownfield site and is currently owned by the Squamish Oceanfront Development Corporation (SODC), which is wholly owned by the District of Squamish. Since Qualex- Landmark pulled out of the project in 2006, the SODC has continued planning and remediation efforts on the site and is looking for a perspective buyer or partner to complete the project. The project is now in the final planning stages, but the SODC has elected not to apply for CD zoning because it would like to accommodate any input from a perspective buyer or partner.

Waterfront Landing Waterfront Landing is a 1,425 unit master planned community located on the Mamquam Blind Channel of the Squamish waterfront. The proposed project includes a mix of apartments and townhouses and has amenities that include two marinas, a children’s play area, a playing field and boardwalk. Pridham Development is acting as the land developer for the project and is currently selling 0.5 to 3 acre development sites in the first phase to independent builders through Cushman Wakefield. These phase one sites together can accommodate up to 67 townhomes, 116 stacked townhouses, 139 low rise apartments, and 217 midrise apartments.

Ocean’s Gateway Ocean’s Gateway is a proposed mixed-use development adjacent to the Squamish Oceanfront Development Lands on Howe Sound. Preliminary plans for the 14.1 acre site include 1,519 residential units and 138,000 square feet of retail space. The site, which was formerly owned by International Forest Products was acquired by Westmana in 2006. By 2009, the developer had received a Development Permit for a 60 unit multifamily project and marina located on the waterfront. After several Development Permit extensions, the developer ran into financial difficulties and the mortgage holder on the property foreclosed in late 2011. The entire site is now listed for sale with CBRE. Though most of the site is still zoned industrial, the Squamish Oceanfront Area Plan envisions a mixed-use community for the site.

University Heights

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The University Heights is a newly created residential community surrounding the recently completed Quest University Campus in Squamish. The University Heights neighbourhood can accommodate approximately 960 market residential units in the future. The Peaks at University Heights by Holborn is the first residential project to take place in the new neighbourhood. Located on a 50 acre parcel, a mix of single family and duplex homes is taking shape. To date, 33 luxury homes have been sold.

Thunderbird Creek Thunderbird Creek is a 130 acre residential subdivision located in the Garibaldi Highlands area of Squamish. Townline Properties acquired the site in 2004 and has completed and sold 82 single family lots in the 1st phase to date. Townline is currently working through access issues on the remaining 110 acres of the site and plans to build an additional 600 single and multi-family homes in the project. Townline anticipates that it will use 43 acres of the site for single family residential, 33 acres for low density residential, 6 acres for medium density residential, 1 acre for commercial, and 27 acres for open space. The developer is currently in talks with the District to move forward with a 43 acre small lot subdivision off of Newport Ridge Drive, a portion of the site not impacted by access issues.

Eaglewind Eaglewind is a 25 acre, 435 unit master planned residential community in Squamish built by Solterra Developments. To date, 207 condo and townhome units have been developed and 155 units have been sold. Capacity remains on the site to accommodate 3 additional phases. Eaglewind features a children’s play area, community garden, seniors’ centre, tennis courts, and a lawn bowling area.

Coastal Village Coastal Village is a master planned multifamily community located in Downtown Squamish. Coastal Village is planned to have a total of 190 condos and 35 townhouses once complete. The project was developed by Pointe of View Developments Squamish and Thomas Ivanore before it ran into financial trouble and was halted during the 2008 economic downturn. The Bowra Group was appointed receiver in 2009 completed the first 92 condos and 19 townhome units in the project. The final parcel at Coastal Village has an approved development permit for a total of 82 condo units and 16 townhouse units and is currently listed for sale by the receiver.

Maples at Fintrey Park The Maples at Fintrey Park is a 54 acre, 175 lot single family subdivision that is currently marketing in Squamish. Purchasers can buy home sites, or turn-key homes in the project, which has sold 18 lots in the first 33 lot phase of the project.

Crumpit Woods Crumpit Woods is a 109 lot single family subdivision that recently began marketing in Squamish. To date, about 32 of the first 44 lots released have sold.

Garibaldi Springs Developer Doug Day and Townline Ventures Squamish have approached the District of Squamish with a proposal to develop 180 small lots and a park on the former Garibaldi Springs Golf Course. The project has been met with strong opposition by local residents and the planning department has reportedly asked the developer to revise the proposal.

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Klahanie Shannon Falls Resort & Spa The Klahanie Shannon Falls Resort & Spa is a proposed mixed-use development located on a 34.5 acre semi-waterfront parcel south of Squamish. The proposed development envisioned a 307 unit five star hotel and 176 resort villa residences for the property. The project received a Development Permit in 2007, but has since run into financial difficulties. The site is currently listed for sale under court order.

37870 Cleveland 37870 Cleveland Avenue in downtown Squamish is a full city block development site that had an approved Development Permit in place for 82 townhouse and apartment units and commercial at grade in 2008. The former BC rail site was sold to Solterra Developments in late 2010 and they are currently leasing the existing industrial building and yard on the site.

The Parkhouse The Parkhouse is a proposed 4 storey multifamily project located at 1150 Bailey Avenue in downtown Squamish. The 65 unit project has been delayed and recently asked for a Development Permit extension. The site is now listed for sale and ready for immediate development.

Coastal Gate Development Coastal Gate Development has applied to the District of Squamish to build a 27 unit mixed-use building in downtown Squamish. The project is now on hold and has since asked for a Development Permit extension.

Studio SQ Studio SQ is a 33 unit multifamily development located in downtown Squamish at 37841 Cleveland Avenue. I4 Property Group developed the project and has sold about 20 units to date.

Tantalus Crossing Tantalus Crossing is located at 4037 Tantalus Road in Squamish. The 42 unit townhome project has sold about 12 units to date.

Rivendale Rivendale is a new 14 unit townhouse project by Diamond Head Development located in Brakendale. The project is located at 41488 Brenan Road and has not sold any units to date.

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