Metro Vancouver Regional District hopes to recover some of the money it is owed by a private entity from the sale of its former headquarters office complex.
The issue lies with the real estate development and investment entity being tied up with the court receivership process, as their plans to renovate the complex into premium office space collapsed.
The property in question is the 1983-built complex at 4330 Kingsway in Burnaby’s Metrotown district. Two buildings at the complex, reaching 19 storeys and 10 storeys, contain 350,000 sq ft of office space. The property is attached to the nickname “Golden Towers” for its highly distinctive reflective golden-tinted glass exterior.
The regional district announced its decision to sell the complex to Slate Asset Management in 2018, and the transaction was finalized in 2019. The property was sold for $86 million, with the proceeds going toward the regional district’s acquisition of the nearby Metrotower III office tower for its new replacement and expanded headquarters. Currently, the regional district’s former complex at 4330 Kingsway is owned by the City of Burnaby.
After the 2019 deal, Slate devised a plan for substantial investments to fully renovate the complex into a premium Class AAA office space known as “Capital Point,” which would be sold as strata ownership office space rather than used for conventional office rentals. But then, the pandemic hit, and the demand for such office space collapsed.
Site of the former headquarters office of Metro Vancouver Regional District at 4330 Kingway, Burnaby. (Google Maps)
Cancelled project: 2021 artistic rendering of Capital Point at 4330 Kingsway and 5945 Kathleen Avenue in Burnaby. (Slate Asset Management)
Construction on the renovations was originally scheduled to begin in Spring 2021 for a completion in Spring 2023, but this work never began. Then, in Spring 2023, Slate indicated it had cancelled the project’s office uses and was exploring a pivot into introducing new residential uses to the property.
During Slate’s initial planning process for the office complex’s renovation, prior to the project’s cancellation, it was determined that the building was not up to seismic standards and that their construction project would incur additional significant costs to bring the structure up to modern building codes. A subsequent technical analysis by an engineering firm estimated the cost to seismically upgrade the building would be approximately $9 million.
Under this basis, the regional district agreed to provide Slate with an additional $9 million to perform the seismic upgrades on top of the original $86 million sale price. However, the developer would be required to pay back all or a portion of the $9 million to the regional district if an approval of a building permit by the City of Burnaby was not issued for such seismic improvements or if the work cost less than $9 million.
Furthermore, the construction work must be done within five years. That deadline was March 2024, at which point the regional district began their attempts to recover the additional guarantee of $9 million.
However, Slate’s subsidiary overseeing this Metrotown office renovation project was in default on its mortgage, and it was placed into receivership in June 2024 after a proposed sale of the property to another entity for $86.5 million collapsed. Then, in July 2024, the Supreme Court of British Columbia ordered that the property be sold.
Through the court receivership process, this complex was sold to the City of Burnaby for $65 million in November 2024.
Through the legal proceedings, as of the end of October 2024, SCREO, Slate’s legal entity overseeing the now-failed Metrotown office project, had total debts of about $59.1 million, including $49.8 million to secured creditors and $9.3 million to unsecured creditors. The unsecured creditor portion includes the claim of $9 million by the regional district.
“Based on the receiver’s report, it is anticipated that the proceeds of the sale [to the City of Burnaby] will cover the outstanding debts and that there is a good chance that GVWD will recover the $9M it is owed. However, the determination of the distribution of those excess funds will be subject to the court’s judgement,” reads a regional district staff report this month.
Regional district staff also suggest that they could pursue recourse against SCREO, which has other subsidiaries with real estate holdings.
The former headquarters office of Metro Vancouver Regional District at 4330 Kingsway, Burnaby. (Google Maps)
To date, the City of Burnaby has not identified any potential uses for the office complex. City staff are expected to return to Burnaby City Council in early 2025, outlining potential uses and renovation or redevelopment possibilities.
There has been some speculation that the building could be presented as an alternative option for Burnaby’s new City Hall, located in the more centralized and accessible location of Metrotown. Currently, City staff are planning the construction of a new replacement City Hall complex at the existing location of City Hall to the north of Deer Lake.