Globe & Mail: Burnishing a Dusty Gem

October 5th, 2007
Robert Fung at one of his projects, the Paris Block on Hastings Street.

Robert Fung at one of his projects, the Paris Block on Hastings Street.

The Globe and Mail
Friday, Oct. 5, 2007
By Kerry Gold

Burnishing a Dusty Gem
The developer pioneers are moving into Gastown and the downtown east side: “Nobody kids themselves they’re moving into Disneyland,” says the leader of the pack, Robert Fung.

For as long as most Vancouverites can remember, the heritage district of Gastown has been a draw for tourists, night clubbers and vagrants. 

Architects, designers and entertainment types who opted for character buildings over sterile office towers quietly set up business there. A few condos went up over the years, inhabited mostly by singletons who’d get married and move on. 

And although it contains some of the city’s most historically important and beautiful buildings, it’s hardly been a place to set down roots. 

Surrounded by soup kitchens and social services outposts, the potentially pretty neighbourhood with cobblestone streets also butts up against the drug-addled war zone that is the infamous downtown eastside. 

Restaurateur Sean Heather opened the successful Irish Heather restaurant-pub 11 years ago, right by the Gassy Jack statue, because rent was cheap. As one of the first businessmen to commit to investIng there in the long-term, he is considered a pioneer, one of the few brave hearts who dared take on the troubled area. 

“We’ve certainly always been there for Gastown, always pushed it whenever we could,” Mr. Heather says. “The Heather was opened on a shoestring, and probably by year two was good. We’ve been making a decent living out of it ever since. But you have to have the right product, the right temperament, all these things.” 

After years of mere talk about revitalization of the area, Mr. Heather began to notice a palpable, exciting change In the last couple of years. It’s a change brought about by intense market demand for more housing in urban areas, and a city tax incentive program that made it worthwhile for developers to convert heritage buildings to condos. 

“We noticed that the buildings got sold and were bought up by people who then got hanging around and were going to change things,” he says. “We started to see customers coming in that were developers. People were talking about Woodward’s, and it looked like it was going to happen. And when things suddenly look like they’re going to happen, that’s the big change.” 

One of those developers would have been Robert Fung, an anthropology major who came from Toronto 17 years ago to take a job at Concord Pacific, where he spent eight years learning about development. 

He spent three years at Narland Croup, and then he convinced his wife to sell their home so he could form his own company, the Salient Group. 

Today, Mr. Fung is considered to be revolutionizing Gastown almost single-handedly, with about 10 developments either finished or underway. He is now Mr. Heather’s landlord, and his own office is located in the top floor of the Byrnes Block inside Maple Tree Square, at one time the city’s original jail and courthouse. He has extensive plans to renovate and upgrade the complex of buildings and its treed courtyard, beginning in October. 

Using the controversial practice of façadism, which saves the building front and builds new behind it. Fung has also developed a row of five buildings along Water Street. He has other housing and office projects nearby, such as the Paris Block and the Flack Block respectively, in the grittier, rundown and boarded up areas of the downtown eastside. 

Mr. Fung was attracted to the neighbourhood for its heritage landmark buildings and its prices. With an eye for heritage exteriors and contemporary interiors, he operates on the idea that just because it’s a low-income neighbourhood doesn’t mean you build low-budget residences. 

“I think there’s been a confluence of factors that have come together at the same time to create a strong energy in this area,” he reflects, while seated inside his small boardroom, which retains its historic character. “One of them certainly Is the fact that there has been unprecedented market activity on the condo side residentially, and tons of development, and so tons of investment into the Lower Mainland. And that started to put pressure on areas that typically people wouldn’t develop. 

“I was in this area for three years before anybody started to look at it and say, ‘Actually he’s able to do something, let’s poke around.’ So we were able to identify the key investment buildings and start working in the area before anybody else decided they thought they’d buy it. And it seems to be working.”

Of course, the redevelopment of the Woodward’s building is a huge boost to the area’s economy as well. There is rumoured to be plans for a large grocery store, drugstore, daycare and community centre. And the presence of Simon Fraser University will bring the vitality of student life to the area, always a boost to retailers.

Like anybody who’s been watching Gastown’s slow climb from the ashes, top real estate marketer Bob Rennie gives credit to Mr. Fung. 

“He pioneered it, and he’s done a great job,” says Mr. Rennie, who is moving his offices, private art gallery and 26 staff to nearby Chinatown. 

Like Mr. Heather and Mr. Fung, Mr. Rennie feels an affinIty with the character of the downtown eastside and the artists and designers who dwell there. He prefers the atmosphere to that of the generic business district.

Mr. Rennie also wants to play a role in revitallzing the historic area of the downtown eastside, which he sees as brimming with potential. 

“We want to bring our business to the street in Chinatown and start to be part of that change,” says Mr. Rennie. “We see it as the future of the city.” 

And he believes that the revitalization will spread out of the downtown eastside and further east.

“We had Expo and it put a spotlight on our city and now we’re going to show off again with $5 billion marketing campaign called the Olympics,” he says. “We are a special city and the spotlight is going to be upon us, and I don’t think we’re prepared. We have no land left to develop in the core. It has to move east. It’s not even genius, it just has nowhere else to go.”

He also gives credit to Mr. Heather’s Gastown restaurant empire, which has grown to include a gourmet hot dog stand called Fetch, and the trend setting Salt, which is about to expand with the addition of the downstairs Salt Cellar. Mr. Heather and business partner Scott Hawthorn based Salt on the gritty urban cool of New York’s trendy meatpacking district. At Salt, well-heeled customers must enter off an alley that Is shared with dumpster divers.

Mr. Heather has seen customers drive up in a cab, take a look at the surroundings, and get back in the cab.

“Salt to me is the poster child of the fortunate walking the streets with the less fortunate,” says Mr. Rennie, who often shows it to his clients.

They are supportive of each other, these pioneers of Gastown’s new wave.

Mr. Heather attempted to branch out with a restaurant in Yaletown, but closed it after mere months, partly because he missed the camaraderie of the downtown eastside. He also couldn’t see carving out a niche among so many restaurants chasing after the same share of the market.

But his loyalty to the downtown eastside wasn’t always so strong.

“After I opened the Heather I thought I’d made the biggest mistake of my life,” recalls Mr. Heather. “So we sort of circled the wagons and tried to make it work. 

“I had no grand plan to revitallze Gastown, I just got fed up with working for other people,” he says, dismissing the notion that he led the charge.

ln fact, there is an earlier pioneer named Niels Bendtsen, who’s run his high-end modem furniture business in Gastown on and off since 1970. He recently moved his store to a bigger, grander, Soho-looking store across the street from his old location. The new store at 50 Water Street is in a building Bendsten purchased in 2003 for $2.3 million, which he then extensively renovated, complete with the new, old-looking façade. The original location will become a furniture and kitchen store. 

But the future will not be the standard move toward gentrification. Nobody Is hoping to push out the low-income residents who occupy single rooms in nearby hotels. However, they concede the small retailers may have a harder time surviving as rents go up. 

“It’s sad to think that people who aren’t moving with the times are going to go by the wayside,” acknowledges Mr. Heather. 

But the low-income residents are safe.

“We all have to accept the diversity because single room occupancy is zoned, and it’s not going away,” says Mr. Rennie, “We’re not Chelsea in New York, where you can go In and gentrify the area. You have to find that balance.” 

Mr. Fung says he’s never displaced a single room occupant because of one of his developments. He has, however, displaced a couple of marijuana grow operations and rooms of stolen merchandise prior to the renovation of the Flack Block heritage office building at Hastings and Cambie. 

Fung believes the key to the area’s revitalization is balance. It was 20 years of unbalance that led the area to deteriorate, says Mr. Fung. ln particular, he points to a policy aimed at filling the area with social housing and services.

“What does that create? It creates what we had five years ago – all low income, all social services, and very little market based activity. No value, so no property tax base, no investment in property or buildings. It’s a really bad exponential decline.” 

But even with more balance, it’s not a way of life or business for everyone. 

“Nobody kids themselves they’re moving into Disneyland,” says Mr. Fung. “We have all the warts of a much bigger city on a concentrated basis. People are coming here because it’s interesting, exciting. It’s urban.”

You have to be a believer to survive In Gastown, cautions Mr. Heather. 

“If you’re in Gastown, you’re on board with the downtown eastside,” he explains. “If you’re not, you don’t last very long.” 

 

Special to The Globe and Mail

 

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