subscribe to our RSS feedWestern Living Condo: Robert Fung – Character Builder
May 15th, 2007
Robert Fung – Character Builder
By Trevor Boddy
Spring/Summer 2007
It isn’t easy turning funky old buildings in sketchy neighbourhoods into fashionable condos. Just ask developer Robert Fung.
Robert Fung has become Vancouver’s condo developer of the future by concentrating on the past.
As his fellow real estate tycoons paid ever-higher prices for land to build condo towers downtown and at SkyTrain hubs, Fung followed another path – riskier in someways, more rewarding in others. Confounding conventional wisdom, he purchased historic buildings all around Canada’s poorest and most drug-plagued urban neighbourhood.
It wasn’t as if he didn’t know how to crank out high-rise condos. He had spent a decade working for other developers, mostly Concord Pacific. Vancouver’s largest developer had hired Fung straight from a B.A. in Anthropology at Western in 1990, though he admits there was a little family influence involved – father Robert Fung Sr. is a prominent Liberal and former CEO of Toronto’s Waterfront Development Corporation. Etobicoke-raised Fung learned how to put together skinny-tower-on-townhouse-base projects, get them approved at city hall, then preset those invisible, yet-to-be-constructed boxes in the air that are Vancouver’s condos-to-come. Eventually, though, this development formula became rote and the land price stakes too high for independent new players like him.
From his perch at Concord Pacific, watching the brick warehouses of Yaletown get developed, Fung concluded that “Gastown could become what Yaletown did not want to be.” Now, walking around Vancouver’s rapidly changing Downtown Eastside, he is delighted with signs of renewal, such as Sean Heather and Scott Hawthorn’s Salt wine bar located next to a string of his properties along what used to be one of the city’s most troubled alleys. Admiring an old cornice here, sculpted window surrounds there, Fung has a story about nearly every building. He revels in the urban textures of the area. Given the success of his heritage building developments, he is obviously not alone.
Some of Fung’s competitors grouse that he must have some pipeline to deep pockets in Toronto or Asia, but he demurs, explaining he had to sell his own house for seed capital when Salient Development started in 2000. By the start of this decade, Gastown’s harbourview cream along Water and Alexander Streets had been skimmed off by other developers, with the east-of-Main Edge project through to the Landing at Richards Street picked up by others or priced out of his reach.
It is a tribute to Fung’s diplomatic skills that he has become one of the largest developers in the area while maintaining the respect of testy residents’ associations, ask-the-world heritage authorities and radical antipoverty activists. Salient has a “no displacement of Single Room Occupancy suites” company policy, and Fung feels long-term investment and connection with community organizations is crucial in building the trust that allows complex proposals to crystallize: “Development is a very local thing. based on personal relationships”
Fung’s investment in Gastown heritage structures began with his 2001 purchase of the 1886 Alhambra and related buildings around Blood Alley, the red brick complex behind Gassy Jack’s statue that includes the Irish Heather and Shebeen bars. “This may be Vancouver’s oldest in situ building, and it is certainly Gastown’s,” he says during an interview in Salient’s offices, now located there. Heritage projects are more challenging and labour-intensive for developers than new construction – it has taken six years to assemble approvals and finance for this infill-cum-restoration, only now starting construction as the Garage and Terminus projects adjacent to the Alhambra. Pulling them together has boosted Fung’s
technical, political and financial skills; he explains,with a slightly pained smile, “Gastown means the difficult understanding of difficult buildings.”
Double difficulty is apparent in the story of Fung’s next two projects. In 2001 Salient purchased Water Street’s Taylor Building, intending to renovate it as a hub for high-tech offices. The dot.com boom ended, and this business plan died with it. Seeing downtown Vancouver turning to housing over workspaces, his next proposition was to convert all the upper floors into rental housing. This strategy proved ill-timed because condo speculators subletting their apartments had so depressed downtown rents that an all-rental conversion was no longer viable. Finally Salient reconceived the building as loft condos, and Fung’s first project to go to market sold out in 2003.
So far so good. Robert Fung now wanted to diversify his portfolio of housing projects and looked to Vancouver’s arterial streets for densification-Iong before now-Mayor Sam Sullivan got on his Eco Density hobby horse. On West 10th in Point Grey, Salient purchased the Varsity Theatre from then-Prime Minister Paul Martin, although the sale was channelled through a blind trust. The condo and retail Varsity project was put together and sold out, Vancouver style, before construction started.
If the real test of character is howto deal with failure, Robert Fung came out of the Varsity’s subsequent financial collapse smelling like a rose. The Varsity had been priced wrong for it’s changing market, then construction costs escalated with delays, meaning Salient could not complete the project without ruining the company, and Fung with it. “Though we tried very hard, the Varsity project fell apart, then we retooled it,” he says of first having to refund the deposits of all of his purchasers in full, then making a second, successful run at the project, one-fifth of his original purchasers so impressed they signed on again. Reflecting on this, Vancouver’s first financial failure of a sold-out condo project before beginning construction, Fung speaks of the difficulty he and his wife had conceiving their first child: “The same way we got pregnant, Salient succeeded through not trying.” He now has three children, and a viable Varsity rises weekly above West 10th Avenue.
Salient’s most recent condo building to open brings together a number of principles from these previous projects. The Bowman Lofts is the best of a string of conversions of formerwarehouses along Beatty Street between Dunsmuir and Pender. To make his numbers work here, Fung first had to convince city council to extend the heritage incentives crucial to his Gastown projects to the Victory Square heritage district, which includes the Bowman. Salient next had to work with city planners, arguing that by cutting away floors to make the dramatic two-storey lofts, they should be able to stack this subtracted floor area as new two-storey penthouses discreetly added to the roof.
On a tour of the Bowman Lofts, the developer waxes enthusiastic about character elements he sees as crucial to the niche market he seeks: condo purchasers who see no contradiction between up-to-date design setting off the well earned character-markings of history. From the second-storey loft bedroom, Fung scans one of the retained brick walls and points to a notch where timber beams once rested: “We could have patched these over, but they maintain character, building the story of the place by keeping remnants of what was here before.”
Arriving at the penthouses, Fung’s deep pride in the contemporary design flourishes of Gair Wiliiamson’s architecture at the top of the Bowman suggests where he and Salient are headed. Fung will now turn to all-new construction, as the supply of Vancouver heritage buildings is so small that he will have to start constructing character filled developments from scratch. In one of those curious conundrums of capitalism, Fung’s success in Gastown has attracted a lot of new developers and investors, and he has helped price himself out of his own home market. Fung notes the irony of new arrivals “harvesting the value-added that others helped create.”
Saying goodbye, it grew apparent to me that Fung’s mixed message from success is also the greater tale of Vancouver right now. Just as apparent, there will be a growing desire by condo-dwellers here for something with more character than the formulaic designs of recent years. Whether renovations or all-new, Salient’s developments will enrich our cityscape.