Vancouver Audit Reveals Unverified Value in Select Land Sales

An audit conducted by the City of Vancouver has raised concerns regarding the effectiveness and transparency of land sales and exchanges orchestrated by the municipal government. This report, released by City Auditor General Mike Macdonell, covers a timeframe exceeding eight years, specifically from January 2016 to June 2024, and involves significant transactions valued at hundreds of millions of dollars.

Key Findings of the Audit

The audit indicates that the City cannot consistently prove it maximized taxpayer value in its land transactions. It evaluated 40 transactions and focused deeply on 16 of these, which represented about 90% of the total value and 40% of all transactions during the audit period.

Concerns Over Transparency and Oversight

• The audit suggests weaknesses in strategic direction and procedural guidelines.
• Documentation provided to City Council was often insufficient.
• No evidence of fraud was found, but systemic issues were prevalent.

One of the most pressing concerns highlighted was the lack of a coherent citywide strategy for land sales. The majority of the major transactions reviewed were initiated by external requests instead of from a City-led strategy. This reactive approach undermines the City’s ability to meet long-term public goals.

Policy Discrepancies and Governance Issues

The audit also criticized the City for maintaining dual versions of its Land Sale Policy, leading to confusion and inconsistent governance. Important terms, including what constitutes “market value,” lack clear definitions, complicating proper assessment of land transactions.

Impact of Community Amenity Contributions

A notable aspect discussed was the City’s Community Amenity Contributions (CACs). These contributions, negotiated with developers, have been criticized for their lengthy and complex negotiation processes. The audit notes that the provincial government is moving towards a more predictable system for calculating these public benefits.

Examples and Recommendations

A prominent transaction involved the sale of 601 Beach Crescent, sold to Pinnacle International in 2016. The developers were responsible for a deferred payment based on future rezoning, but a calculation error resulted in an understatement of nearly $13 million owed to the City.

The Auditor General provided ten recommendations aimed at overhauling the City’s land management process. Key suggestions include:

• Establishing a citywide strategy for land transactions.
• Creating a consolidated, transparent policy framework.
• Strengthening rules for re-engaging City Council on major deal changes.
• Improving documentation and post-transaction reviews.

Conclusion

The City of Vancouver’s audit sheds light on significant concerns regarding its land sales and exchanges. While no corruption was found, the potential to optimize financial outcomes for the public remains markedly unaddressed. Moving forward, recommendations from the Auditor General will be crucial for enhancing transparency, governance, and the overall management of land assets in Vancouver.