A major B.C. developer has won its court battle with the Vancouver School Board over the rent it pays to occupy the Kingsgate Mall.
The Beedie Development Group, through its subsidiary Kingsgate Property Ltd., has been locked in a multi-year battle with the school board, which owns the property.
The VSB alleged Beedie owed more than $50 million in unpaid rent, based on the property’s market value.
The lease on the property calculates rent at 8.25 per cent of the land’s value.
At issue was how much the property is actually worth. In 1999, an arbitration panel ruled “immediate use” meant the land could be developed for an “outright” zoning use (1.0 Floor Space Ratio or FSR).
But in 2022, an arbitration panel rejected that interpretation, instead valuing the land at a denser 3.0 FSR conditional use, raising the market value to $116.5 million (six times higher than the outright use value of $20 million).
At the lower valuation, Beedie’s rent at the renewal period would be $1.65 million, while at the higher valuation, it would be more than $9.3 million.
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In a decision dated Dec. 20, 2024, and published online Friday, the B.C. Supreme Court concluded the 2022 panel had misinterpreted the 1999 decision, and that the earlier panel’s interpretation of “immediate use” was correct.
The court set the 2022 decision aside and reinstated the market value based on the 1.0 FSR, valuing the land at $20 million, with $1.65-million annual rent.
Previous court filings in the case also revealed the VSB was looking at potentially selling or redeveloping the land.
The Kingsgate Mall property was originally acquired by the City of Vancouver and the school board in the late 1800s, with Mount Pleasant School built there in 1892.
Nearly a century later, Kingsway and Broadway had become a thriving area, and the board built a new school in a nearby residential area, vacating the property in 1972. Two years later the land was leased and the mall was built.
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