Not all developers coming to Gibsons are reputable

Some proponents looking for opportunities on the Coast are shady, or even fraudulent. Who are they, what do they do?

Please note: For legal reasons, we cannot publish all the details we found. We do have the names and other information.

(By Margot Grant)

A number of developers, mostly from out of town, have come to Gibsons recently in search of opportunities. Why Gibsons, or the Sunshine Coast for that matter? We took a look at who they are and what they do.

Let’s start with a large lot in Gibsons, sold last year, with the potential for a number of housing units in a desirable location. The owners have not yet made a development application. The property is owned by a numbered company with four directors from Surrey.  

One of them has the same three names as a man charged with first-degree murder in a shooting spree on the Lower Mainland this year. A year ago, a man with the same names was charged with arson, flight from police and possession of stolen property. We have not found anyone else with this combination of names in Canada. 

Another director has the same name as a man who let scores of traffic violations go to court in B.C. We have been unable to find anyone else with this combination of first and last names in Canada. 

A third director has a relatively small flooring business in Surrey. The fourth director has the same last name as the man charged this year. 

Where does the money come from? How are they going to finance the construction of housing units on the property? Or are they? Their company was incorporated last year. There is no record of any activity, least of all in development.

757 School Road

In 2019, a developer bought the 1/3-acre property at 757 School Road (on the corner with O’Shea Road, opposite the supportive housing project) for $630,000. The lot has an older home on it. The developer got the lot rezoned from R2 to medium density multifamily and obtained a building permit for nine condo units. He paid the town $35,000 in community amenities contributions (CAC’s) and put the lot up for sale for $2.6 million. UPDATE price has gone down to 2,280,000. “Shovel and demolition ready,” the listing says. 

Could the Town have benefitted more from this development? When a lot in Gibsons is rezoned to allow for more units, or a change in use, its value increases: the developer makes more money because he has more units to sell. The Town of Gibsons would like to receive 75 per cent of this increase in value.

The town may ask for an economic analysis conducted at the applicant’s expense by an independent third-party consultant agreed upon by the applicant and the town. The consultant adds the original land value, the expected development costs and a 15 per cent return on investment for the developer (this is the profit margin banks usually look for in order to finance a project) and then compares this number with the expected revenue the project will generate.

In the case of 757 School Road this did not happen because the policy does not apply to developments with fewer than ten units.

South Fletcher

Let’s look at a development on South Fletcher, built last year. Three of the four units sit empty. There are six builders liens on title, for a total of $313,002.06.

H & H Developments in Sechelt which did the excavating and machine work is still owed $79,238.82. Custom Flooring in Sechelt was stiffed for $72,187.26; Any Kind Plumbing and Heating in Surrey was not paid $116,731.13 for the plumbing and gas installation while Garaventa Home Elevators in Maple Ridge still has more than $39,000 outstanding. HKN Cleaning from Surrey is still hoping to recover $5,750.85 for the cleaning of one of the units. 

The developer is a company in good standing with BC Housing. But there is something strange about each of the three addresses and the phone numbers the company provides. 

The first address (“care of”) in North Vancouver is a beauty parlour. The second address is the location of a matchmaking service in Vancouver. The third address is a building for short-term office rentals.

The phone numbers have no connection to the developer or any contractor.

The developer only gives an initial for his last name on LinkedIn. He says he is a partner in another company with a website that no longer exists; the domain name has gone up for sale. It was with bottom-rate, build-your-own website company GoDaddy.

Here is what this developer says about the project on South Fletcher:: “—— is a syndicated development company that owns and operates a six-story luxury condominium project in Gibsons Landing. The project was completed in fall 2022 and is valued at over $6,000,000. Successfully syndicated capital for the project, led design and permitting process with municipality and managed team of consultants throughout construction to completion.” 

According to sources close to the project who do not wish to be named but whose identity is known by The Coast Clarion the problems with builders liens and unsold units was caused by incompetence: they claim it was the developer’s first project. The developer could not be reached for comment. 

Gospel Rock

Ji Yan, the developer of Gospel Rock, was a first-time developer as well, as he disclosed in his brochure. The project ran into financial difficulties; sub-contractor Bob Dhanda says he was not paid more than $800,000 for excavation work and claims he lost a $1.8 million contract for more work when he complained. In addition, a surveyor was not paid; the firm which took over made grave mistakes. Trees which should be left standing were felled. 

Ji Yan also hired James Wang as contractor, a man with several aliases who was taken to court a number of times for non-payment of trades people. When The Coast Clarion asked the Town’s Director of Planning Lesley-Anne Staats if the Town knew who the contractor was, she did not reply. 

As The Coast Clarion reported, the Gospel Rock developer recently failed to pay Atlas Steel Detailing for the structural drawings of the Gospel Rock Village. The builders lien is still on title. Owner Fariba Saedi said James Wang had provided her with an “engineer of record” to sign off on the drawings. The Coast Clarion discovered that this individual’s engineering license was revoked in 1992 over gross incompetence and signing off on a project which had not been completed. We asked Staats twice by email if the town had received drawings of the village: it would be interesting to see who had signed off on them. Staats did not reply. 

The developer has applied for a Development Variance Permit to allow two proposed additional stories in height to the hotel building and increase the number rooms from 50 to 84. He has also applied for a new form and character development permit (DPA10) including the additional storeys.

565 Gibsons Way

Let’s look further, at 565 Gibsons Way. Town council voted against this proposed six-unit development on October 3 this year; it did not get past first reading. The issue was with the design and the project, not the developer.

The developer has no record of any construction activity, ever. On LinkedIn, he lists Outlook Express (email program), Microsoft Excel, Powerpoint, Microsoft Office and customer service among his skills. He has a background in retail.

The architectural drawings were done by a firm with no website and a post office box for a physical address. The person listed as responsible for the drawings had a hotmail email address, unusual in business. His LinkedIn profile says he left the firm in February 2022. He claims to be an experienced project manager with a demonstrated history of working in the design industry. He is skilled in autoCAD (an architectural design computer program), negotiation, budgeting, Microsoft Excel and Microsoft Word.

456-458 Marine Drive

The developer of 456-458 Marine Drive is a man about whom we have not been able to find any information. His activities or background are unknown. The address for the company is a 2-bedroom 1-bath apartment on Robson Street in Vancouver. 

He wants to build nine apartments at 456-458 Marine Drive.  

In 2013 a different man who was convicted of fraud in the United States applied to the Town of Gibsons to build Seaglass, a 12-unit luxury condo development at 458 and 462 Marine Drive. It went as far as first reading, with the town demanding changes to the design. 

An 89-year-old retired teacher in Vancouver took the would-be developer to court claiming he convinced her to take out unsustainable mortgages on her home in connection with the development. She was on the verge of losing her house. At least one other couple claimed to be defrauded by this developer. In all, four lenders went to BC Supreme Court with claims topping $5 million. The developer disappeared. 

Stonehurst

Not long ago, The Coast Clarion reported about the owner of Stonehurst who claimed to be an experienced developer. The only project he supposedly built in Canada — in West Vancouver — turned out to be a hole in the ground. 

Bad behaviour

Andy Yan is the director of the city program at Simon Fraser University and an adjunct professor in urban studies at Simon Fraser University. He is also a member of the board of directors for the Planning Institute of British Columbia.

“It’s a bad thing if they [developers] don’t care about the community, just make money and leave,” Yan told The Coast Clarion. The community is paying the price, with ongoing costs.”

This is not just a Gibsons matter, Yan says. “The entire Sunshine Coast should determine how far it wants to go in encouraging bad behaviour. The hope of money by speculation is not about building homes for people, and this is exactly what underlies the current housing problems. Not just in B.C. by the way, but in the whole of Canada.”

Investigation

There is currently no way of determining whether developers applying for rezoning or permits have any track record in construction or developing.

As we have seen, first-time developers may cause harm to the community by not paying for work done, or cutting trees without a permit in an environmentally sensitive area. Or they defraud investors in the project, as happened with Seaglass. 

A man who lets scores of traffic violations go to court clearly has no respect for the law or rules and is willing to waste the time of the judicial system, even if it costs him money. Do we want someone who possibly belongs to a Lower Mainland gang developing in Gibsons?

It might be a good idea to do some investigation into the background of developers when they first come forward. It could be a difficult process.

“The Town is not in the business of investigating developers,” the town’s Director of Planning Lesley-Anne Staats told The Coast Clarion several years ago. Small towns in B.C. don’t usually check developers’ backgrounds.

“It’s been like this in B.C. for the last 130 years,” researcher Yan sighed. “There have always been people who see an opportunity to move into a small community, extract what they can, and move on. It’s like mining, really. It’s a bad system that encourages bad behaviour.”

“People with a criminal record can own property in B.C., it’s not illegal,” Peter German, former RCMP deputy commissioner for western and northern Canada, Canadian legal academic and anti-money laundering expert, told The Coast Clarion. 

Yes, investigating developers is difficult, Yan admitted. “ Are you going to do that with everybody you do business with? Where do you draw the line?”

But local governments can vet development proponents, the Ministry of Municipalities told The Coast Clarion. “Local governments are prohibited from assisting businesses and must ensure that each developer is investigated equally.”

BC Housing has requirements for developers: “If an individual purchases a lot to build a multi-unit building for sale, that individual must be licensed as a developer and must enroll the project in third-party home warranty insurance,” a spokesperson for BC Housing said.

The City of Vancouver does do some checking of developers. “As part of the application process for rezoning the City requires a title search to see if there are any charges or issues with title, a charge summary and a BC company summary which allows us to determine who owns the property,” spokesperson Kirsten Langan told The Coast Clarion. The City also requires that the owner of the property signs a declaration that he consents to the development.

So some investigation is possible and might save the Town’s planning department considerable time in the long run. To treat all proponents equally, a checklist would be essential. 

Different sources have provided suggestions for such a checklist for anybody proposing a development of more than four housing units on the Sunshine Coast.

Not all developers are bad, of course. Good developers would have no problems with such a checklist.

Here are some of the suggestions:

• Are they licensed by BC Housing as a developer or general contractor?
• Who will manage the project? If an individual: Are they a member of a professional organization?  Are they bondable? If an organization: Do they have WCB? Do they have insurance? Who will be the engineer of record?
• How long has the company been in business?
• What is the track record in development? (Required number of built units to be set by municipality)
• Verify the address(es) and phone number(s) of the companies owning the lot, and the companies proposed to manage the project
• Check the title for builders liens. If there are any, contact the businesses to see if the liens were used in agreement with the developer, which is what sometimes happens

First-time developers should be asked to post a bond.

We asked Gibsons mayor Silas White for comment on this story. He did not address the idea of investigating developers but said: “As for my own theory on why there is development interest in Gibsons, how about that it is an extremely desirable and popular place to live? I don’t think it’s surprising at all. Off-Coast developers have also increasingly been showing an interest in Sechelt, as well, and actually have been for much longer than in Gibsons.”

Yan sees it differently. “Change is hard, it requires continuous local effort. You need bylaws and policies to protect yourself against these kinds of [bad] behaviours [by developers],” he said. “It all depends on the community and its elected leaders.”

This article cost $444.33 for title searches, court documents and Service BC fees, plus $530 for legal advice.

My apologies for the typo in the cost of title searches. The actual figure was $444.33