Vancouver Commercial Real Estate Podcast

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March 30, 2022
VCREP #44: Is Nanaimo the New Victoria for Commercial Real Estate? Part 2 with Mayor Leonard Krog

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In a recent episode, we featured Steiner Properties, highlighting their exciting and upcoming new Nanaimo downtown project, 1 Commercial. Well, we got a lot of great feedback from the episode and it’s clear that our listeners want to hear more about the hype that’s being generated in the city, so who better to hear it from than the mayor himself?

This week, Cory and Adam welcome to the show Mayor Leonard Krog, here to share some great insight on all the new and upcoming projects and what the future holds for the port city. Plus, we dive into the highly anticipated and forthcoming OCP for the downtown and surrounding areas.

VCREP has been very bullish on the Vancouver Island market, and this is probably an episode you want to give a few listens to. There’s a lot of information to unpack about one of BC’s fastest growing communities!

Who is Nanaimo Mayor Leonard Krog?

I was elected mayor of Nanaimo in 2018 and was previously a sitting member of the legislature, a position I had held for 18 years. I’m a lawyer by profession. I’m a longtime Nanaimo resident; I was born in the old Nanaimo hospital, raised in Coombs and then moved back to Nanaimo after law school. I’m married with two kids and five grandchildren.

I ran for mayor because a lot of my friends encouraged me to run during a tough time for Nanaimo. I didn’t think I was contributing as much as I could be in Victoria so I came back home. I won with 74% of the vote so it seems the people who were asking me to run were sincere. It’s a wonderful town and being mayor is a wonderful gig.

How has Nanaimo changed through the pandemic?

The pandemic has thrown everyone for a loop, including us here in Nanaimo. The ferry, which was often seen as a pain, became a barrier for people bringing covid to Nanaimo. But covid had an impact on our city services, like our pools, and we had to institute the usual mandates. We saw a big uptick in our park systems and waterfront walkway, which are some of the best in the province.

Our downtown was very impacted by the pandemic. The only people left downtown were our homeless population, which I believe is one of the biggest issues facing towns in British Columbia.

Nanaimo has come out of the pandemic very well and we have seen dramatic expansion through this time. We’ve done relatively well throughout and we’re grateful for that.

How has Nanaimo’s population grown through the pandemic?

Nanaimo saw a 10.7% increase in population in the last five years, which is no surprise to those of us living here. The phenomenon of people escaping urban British Columbia, particularly the Lower Mainland, and coming to Nanaimo certainly has increased in the last few years. Nanaimo has a lot to offer and people have started to discover us.

We have 102,000 people in Nanaimo but the space to hold a couple of Vancouvers. We have a historic downtown, a regional hospital, Vancouver Island University, a lovely waterfront, and we’re a quick trip to Mount Washington. Everything is here!

Why has Nanaimo seen so much development in commercial real estate in recent years?

Nanaimo’s uptake in commercial real estate development is driven by a few factors. We’ve seen a lot of investment in BC from China and Hong Kong. When you compare real estate prices in Vancouver or Victoria to Nanaimo, the figures just make sense. As well, the Port Authority in Vancouver is getting pretty clogged so we’re seeing vessels unload in Nanaimo and then barge goods across.

Another aspect contributing to Nanaimo’s commercial development is that employees need places to live and developers know that. There is still a possibility for people to have that white picket fence in Nanaimo. If employees can afford their dream home, it’s easier to attract them to work at your business.

Nanaimo is working on a new Official Community Plan (OCP). How is that plan coming along and what is the vision for Nanaimo going forward?

We call it Reimagine Nanaimo. It’s our opportunity to shape the community for the next 25 years. That will lead to an updated Official Community Plan, as well as plans for parks, recreation, climate change, economic development, etc. We did a lot of consultations with the public, we looked at the options and now we’re developing the plans. We’re in the final phase of those plans.

The current draft is an encouraging and complicated document. We recognize that we’re not a little town anymore – we’re one of the five fastest growing regions in Canada. We need to expand our commercial and industrial lands, without becoming a car-reliant community. We need to future-proof our institutions, like our hospital and university, so they can serve the next generation.

Who are the major employers in Nanaimo? What employment sectors exist in Nanaimo?

Nanaimo’s largest industrial employer is HarMac. They’ve survived some very tough times and are a big employer in our community. We have insurance, legal, banking and tech sectors doing well in Nanaimo. We also have a lot of home-based businesses here. A lot of remote workers are making their home in Nanaimo.

In Nanaimo we have manufacturing plants, malls and corporate offices related to the forest industry. Nanaimo used to be known as “The Hub City” and then was graciously changed to “The Harbour City.” We’re the gateway to Vancouver Island. We’re a port city and we attract that international traffic.

How does Nanaimo tackle housing affordability?

There are a lot of arguments about what is driving up real estate prices and what will affect affordability, but I don’t think you can get past one of the basics: supply. For the current Nanaimo city council, if a plan meets our criteria, we’re going to support it. We appreciate the desperate need for housing.

We have 600 homeless people, some of whom require institutional care, but we still require more senior subsidised housing and more rental housing. And you will see that construction happening by the private sector, in addition to the contributions from the province. We just opened up a prefab building with BC Housing that will house 62 people.

We’re doing what we can and we offer fairly good taxation for multi-family house builds. We don’t pretend to be Langford. I don’t want to insult the people down there, but I think our city is a lot prettier. The projects we’re approving look wonderful and will provide the housing we need. The housing need in Nanaimo hasn’t been met yet but we’re working hard to meet it.

How does Nanaimo plan to address climate change?

In Nanaimo they say we went from a heat dome to a snow globe this past year. The environment is one of the strategic goals in our community plan and we take our climate change targets very seriously.

For our regional district as a whole, we’re headed towards 90% reduction in our garbage. We have excellent recycling programs, we’ve banned the use of plastic bags and we have targets to lower our greenhouse gas emissions. We have a tree planting program that incentivizes people to plant trees.

How is commercial real estate investment changing the future of Nanaimo?

The reputation of the Nanaimo city council is fairly green and left. But we’re not seen as a place that discourages investment. And when investors come, they build things and provide employment.

My campaign pitch, which hasn’t changed, has been building a community where people can afford to live, raise a family, get their kids a first rate education and allow those kids to find a job and a home so that cycle can begin again. We don’t want to be a community where everyone has left, which is often the case in small Canadian cities and towns. Nanaimo is becoming a place you come to and stay, not a place that people grow up and leave.

How is Nanaimo tackling density? How is Nanaimo increasing housing supply?

The Nanaimo city council is very happy to receive rezoning applications in areas where we want density. We’re moving forward with planned communities in different regions of Nanaimo that will have lots of amenities and park space, making them very walkable.

Our local First Nations will also be receiving a chunk of land so they can provide Indigenous people in Nanaimo with housing, as historically they have received the smallest allotment of land per capita. So we’re moving forward with reconciliation and with housing.

There are some people who oppose this development and prefer a quieter Nanaimo. But if Nanaimo doesn’t grow, we can’t attract specialists here to perform medical surgeries, we can’t have the goods and services we need, and we won’t be able to keep our families here.

What are you most excited about in Nanaimo?

That’s a difficult question! For those of us who have been here for a while, we really want to see downtown Nanaimo prosper. We’re developing plans that may include a bus exchange. We’re also seeing a new hotel and convention centre come up. So there is some excitement downtown! We have great museums, theatres and lots of arts and culture.

But we do have a homeless issue here and we need help from the provincial government to provide the support that the community needs.

Nanaimo is coming into a wonderful stage. It’s a great time to be here. I think there’s an exciting present and an exciting future for Nanaimo. It’s an honour and a privilege to be the mayor of this city and to work with staff who love this city and want the best for it.

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Vancouver Commercial Real Estate Podcast

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This communication is not intended to cause or induce breach of an existing agency agreement. E&OE: All information contained herein is from sources deemed reliable, and have no reason to doubt its accuracy; however, no guarantee or responsibility is assumed thereof, and it shall not form any part of future contracts. Properties are submitted subject to errors and omissions and all information should be carefully verified. All measurements quoted herein are approximate.