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‘The Hudson’ is a significant project in Victoria.

Once completely built, one of it’s three towers will be the highest residential tower within the City Victoria. But at 24 stories it isn’t simply it’s height that makes it interesting – after all, structures much taller than that have been around for a very long time.

But seldom in Victoria.

Victoria has a long history of resistance to building ‘up’, and building heights are capped in the downtown area at 14 stories. There is a heavy burden on any developer who proposes to build beyond that hight.

Yet in the case of The Hudson, rezoning was approved in a process not nearly as difficult as one might have anticipated. Why that is so is what makes this project interesting.

First, a little background. The Hudson will be sited on the square city block that was the site of The Hudson’s Bay store and parkade. That store was one of six grand stores built across western Canada in the early years of the last century.

When construction began in 1913, the site chosen was said to be a good one for a large retail store “… situated on the brow of the Hill and …about 300 yards from the central Shopping centre.” It was anticipated that upon completion the store would be the heart of the retail shopping area in Victoria.

Image Credit Victoria Hudson's Bay Store

Finished in 1921, the new Hudson’s Bay store was a crowning example of modern Georgian architecture. Its many amenities included comfortable chairs in the main floor circulation library where patrons could relax with a good book. The live orchestra was an added comfort.

For over eight decades ‘The Bay’ served shoppers from this location in Victoria. Generations of families shopped at The Bay store on Douglas Street in Victoria. The old store became more than just a landmark – it became part of the local culture.

But over the decades, the early vision that this location would be the heart of retail shopping in Victoria morphed into a different reality. The downtown retail and tourist core of the city several blocks to the south prospered, while the area in between fell into decline.

The Bay was too far from the action, and in 2002 when an opportunity to acquire the Eaton’s Centre in the heart of downtown came up, The Bay jumped on it. Shortly after, the doors to the old store closed for the last time. After all those years, the site of the grand old Georgian building was for sale.

It isn’t really surprising that Victoria was greatly interested in preserving this building.

Victoria began life as Fort Victoria, established by the Hudson’s Bay Company in 1843. In essence, Victoria was joined at the hip at birth to the old trading company, and ever since they shared a long and rich history.

Not only that, the City saw opportunity here. It believed the ‘right’ development at the site of The Bay could breath new life into the northern extremity of downtown, an area that had admittedly fallen into decline over the past several decades. One idea that was floated was for the City itself to purchase the site of The Bay, and make it the new home for the main public library.

But a deal did not materialize, and the store remained empty and unsold until 2005. But when developer Rick Illich of Townline Development learned it was available, he bought it. Development negotiations began shortly after.

Mr. Illich quickly agreed with Victoria’s insistence that revitalization of The Bay building itself would have to be the first step of the proposed project. No revitalization - no approval! The rest of the development, which called for redevelopment of the large unsightly parkade, would have to follow.

For Townline, development of the parkade area was the key to economic viability of the whole project, and their proposal called for three residential towers: 24 stories, 18 stories, and 14 stories.

At first blush this proposal seemed to face two very big hurdles because two of the towers exceeded both height and density restrictions. But the City of Victoria was persuaded that there were some good trade offs for granting approval. Density limits for the overall project were within limits: the two towers exceeded density provisions, but at four floors the old store site was well under. So that part was a wash.

As to height, Victoria recognized revitalization of the old Bay store simply would not be financially feasible for any developer without offsetting returns from the development of the rest of the site. And the entire development would revitalize not just the building – it would be very good for this entire area of Victoria.

All in all, the circumstances were so unusual that the City was convinced its approval of the project would not open the floodgates for tall highrises to spring up all over Victoria.

So today, Phase I of The Hudson is underway. It will introduce about 150 new residential units to downtown Victoria, at market prices. The developer is shooting for completion of this Phase by the fall of 2009, and sales are well underway.

Details of the Phases to follow aren’t out yet. Originally Townline suggested the entire development would be complete by 2012, but we will have to wait and see whether that date slides. Whatever the date, when the total project is built, it will likely add another 400 or so urban units to the 150 underway in Phase I.

A footnote

One interesting aspect of approval was Victoria’s requirement that the developer register a covenant on the land to ensure individual owners would always have the right to rent their units. This is significant to investors, or to anyone buying a condo as a ‘toe hold’ into the Victoria market, as it guarantees the strata corporation cannot take away the right to rent.

Stay tuned for more.

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