Sunday, 2 December 2012


Last week a New York City policeman bought a pair of boots for a homeless man.  This act of kindness went viral on YouTube.  

This week Vancouver Council agreed to lease with an option to purchase a 33,000 square foot building to a Vancouver Company called HootSuite. Whether it also was a subsidy  depends on the terms.  They have not yet been disclosed.  The  Vancouver Web site reported:

HootSuite has signed an innovative agreement with the City to lease new office space at 5 East 8th Avenue, with an option for ownership. The two-storey, City-owned building contains over 33,000 square feet of office space and has a 2012 assessed value of $9.6 million.

HootSuite seems to be a very good company and a success story. The City Website notes:

HootSuite Enterprise clients include 79 of the Fortune 100 companies, as well as large organizations like Virgin, McDonald’s, Sony Music, Lamborghini, WWF, and more. While the company has grown its workforce internationally, including the opening of a new office in London UK’s Soho district, its roots remain firmly planted in Vancouver.

So what was innovative? If one searches the name, HootSuite, on Vancouver's web site, the only reference is a report of January 23, 2012 from Vancouver’s Economic Commission. It simply says that HootSuite, along with Disney’s Pixar and others, is “part of the City’s growing media cluster.”

The old Police Department Building at 5 E 8th Avenue became surplus in 2011. I could not find it listed for sale or rent in 2012 on the City Site. The report gave no indication that HootSuite was going to get first dibs without it being advertised.

Blogger, Frances Bula had an item on the “lease to own” deal. She says that she talked to a broker who told her that at market rental rates HootSuite should be paying somewhere in the neighbourhood of one million dollars a year (33,000 square feet times about $30 per square foot per year) for this. “What they are actually paying, we don’t know yet except for the city’s assurances that the company will pay “market rent.”

From the press release, one would think that market rent might be the problem for HootSuite in the first place. If they had to pay market rent, the company might not stay here. Is the City being modest about its largesse? The deal may in fact be great for the City but without any details who knows? 

There are many businesses that would like to get an innovative deal on a multi-million dollar building in an industrial zone. Were others given the opportunity?

There are strict controls and procedures regulating grants to for profit corporations under the Vancouver Charter. (See for example ss. 153, 206.) Did the “innovative” deal for HootSuite amount to a subsidy or a grant? One would not put it past City Hall in light of what is going on with respect to zoning. 

The STIR program provides a series of incentives to real estate developers to build rental housing. It encourages projects where new multi-residential rental housing units are secured for the life of the building . It waives development cost levies so that the burden of the project is placed on the community.

There is nothing wrong with HootSuite. Its program allows among other things Twitter users to time their tweets for prime hours. The timely expression of ideas in 140 characters is important. It could theoretically allow City Hall to provide adequate information on deals like the one with HootSuite.

The New York Times is currently running an article on the Economic Development Commission in Texas. It points out that the lines quickly blur between economic benefits and corporate welfare. Who benefits more: the public or the corporations?  see    [see also Clr Affleck questioning one of the VEC's members last year:]

Transparency is a virtue but it is not the virtue our Council is best at. There is no room for secrecy when dealing with publicly  owned real estate. The City has a power to buy and sell property. It does not have to go to the highest bidder. It can take into consideration various policy issues. But the idea that what is good for HootSuite is necessarily good for the country has a bad odor to it.