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City of Vancouver makes Hootsuite an offer too good to refuse: Stay here, lease-to-own one of our buildings

November 23rd, 2012 · 51 Comments

As posted everywhere yesterday, the City of Vancouver announced it has made a deal with social-media darling Hootsuite, which was expanding rapidly and desperately needed space, to sell it one of the city’s former police buildings on the yearly-payment plan.

It’s a strong sign from the city about how much it will do to support local businesses, in order to get them to stay as they grow. When I spoke to him, Mayor Robertson acknowledged that’s not possible with every business. The city lost the Stanley Park Brewery to Surrey as it expanded, because no one could find a space for the bigger operation. It also lost Happy Planet, the company the mayor helped found, to Burnaby a few years ago, he noted. But he sounded pretty determined to do anything the city could to keep businesses when possible.

My story in the Globe adds a bit more context to all this. (As any story should, mutter journalism instructors everywhere.)

According to the commercial broker  I talked to for this story, Hootsuite should be paying somewhere in the neighbourhood of $1 million a year (33,000 square feet times about $30 per square foot per year) for this. What they are actually paying, we don’t know yet except for the city’s assurances that the company will pay “market rent.”

I did check with a very knowledgeable senior planner about whether there was any issue with Hootsuite moving into an industrial-zoned area. I was told that if there was a non-conforming use before (which the police station was), that is often allowed to continue unless there’s a big gap between when one tenant moves out and the next moves in.

But the broker said the whole issue of what used is allowed in industrial zones has been a crazy one for tech companies. Sometimes a city clerk will not allowed an existing use to be continued on with a new tenant. Sometimes, s/he will. Sometimes it ends up in the mayor’s office. Hootsuite was being allowed to operate in its Railtown located, which is actually an M2 industrial zoning, because it is classified as a software manufacturer. But some other tech companies won’t be allowed to move in there, because they don’t have the same classification.

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