For the second time in 50 years, RCG Group will consider itself a pioneer in real estate development. In its home city of Richmond, British Columbia, the zoning ordinance in the light industrial area will change to include residential development. Properties owned by the company in that area will be retrofitted to fit the city’s new increase in demand for housing. 

President Harold Goodwyn’s father, Harvey, founded the underlying holdings companies of what now forms the RCG Group in 1964 by leveraging his experience in civil engineering works, drafting and multifamily development, as well as standard steel fabrication. His vision was to specialize in industrial developments in Richmond, which set the stage for change and improvements to the industrial landscape of the lower mainland. “In the late ‘60s, he built warehouse buildings to spec in succession that were 25,000 square feet and 100,000 square feet, which at the time was a very large building,” Goodwyn says. 

RCG Group considers its competition to be its clients’ attention, which includes its tenant clients and the brokerage community. The primary focus is to get and keep brokers’ attention to ensure access to new acquisition opportunities and prospective tenants for their space that is available for lease, Goodwyn explains. “We are on the small side in this market, as we would be in any [major] market,” he adds. “We are nine people in the property management, acquisition, development and administration of real estate.” 

Although it may be a smaller company, Goodwyn says that is also a benefit because decision-makers are readily available and more responsive. “The person who answers the phone is either the decision maker or one step from the decision-maker,” he adds. “Brokers, tenant clients and other stakeholders appreciate our responsiveness and ability to act quickly. That’s our biggest advantage.” 

Limited Land

The regional market is changing because of increasing demand upon a limited inventory of available land due to population growth, and national and natural boundaries. The United States border is to the south, mountains are located in the north and east and the ocean is to the west. “The city has grown into that space and is arguably growing through it,” Goodwyn says. “There is a strong recognition for retaining green space. There is a split between people who say we should take some of the green space to dedicate to commercial and residential uses to provide for the increasing population and there is another set of stakeholders that say the green space should be left alone.” 

The Agricultural Land Reserve is a collection of agricultural land in British Columbia in which agriculture is recognized as the priority. The lower mainland is protective of green space, which has increased competition and political demands for space. “People love it here because it’s close to the water and mountains,” Goodwyn says. “It’s more psychological than anything else. People are sensitive to changes of use that will overrun the green space.” 

Because land is a limited commodity in Richmond Centre, an acre of land is selling for $6 million to $7 million, which Goodwyn says has created challenging financial market conditions.  “The supply of good-quality available land or developed property is tight,” he adds. “However, the area continues to attract more people, so somehow the market will find a way to provide for that growth.” 

Residential Overhaul

RCG Group’s offices and legacy holdings are located in the Oval Village and Lansdowne Village, or the light industrial area of Richmond that is being rezoned to include mixed-use highrise residential. This sets the company up for success since it has been located there for 50 years and has intimate knowledge of the area. “Because the immediate area is being converted to residential and mixed-use property, it’s a transition for properties in the immediate area,” Goodwyn says. “We are trying to work through how we see either the reemployment of existing assets in a few cases where the building is not economically obsolete, or redevelopment from one- or two-story light industrial or mixed-use buildings to high-density residential.” 

The company owns 13 properties on 20 acres of land in the newly zoned area. A master plan development strategy is being put together by RCG Group in reference to those parcels, Director of Development Gordon Walker says. “What we endeavor to do with the plan is to look at the potential development of the property and see what we can do,” he adds. “Our objective is to develop the properties and maximize density while supporting a broad range of high-quality amenities.”

The RCG Group is currently in discussions with Richmond officials regarding its plan for future developments to ensure they continue their commitment to contributing to the revitalization of the City Centre. Their master plan and related rezoning is expected to be finalized by the end of 2014 with redevelopment of the group’s properties beginning after that. “After we get through the zoning and approval process I think we will be in a position to consider which one of the properties, or which group of properties would be our first choice,” Walker explains.

The company anticipates a lot of thinking outside the box for redevelopment. Ultimately, the city of Richmond will have the final approval of the master plan, but Walker is confident the company and the city will work through any or all issues and come to a mutual acceptance for the space. “The process of working with the city will be a valuable learning experience,” Walker adds. “We do have other land in part of the city that will not be included in the study, so we will be working with the city for approval in the future.” 

RCG Group is eager to begin redeveloping properties in the City Centre into residential space. “We will be helping to create a vibrant City Centre and with our property holdings, we have quite a bit of ability to help with that,” Walker says. “We are not looking at our role as just being the condo developers, but as us making a contribution to the city. What ultimately would be the best-case scenario would be to create amenities that will serve the city for decades to come. That will certainly always be the focus of our plan.”  

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