The primary non-profit fundraising partner for Vancouver Coastal Health has entered the real estate investment market, acquiring a 1.4 acre Vancouver property for $100 million.
The VGH & UBC Hospital Foundation said the deal – which closed on March 29 on a property on West 12th Avenue (across the street from Vancouver General Hospital) – is the largest of its kind in B.C. The deal, officials say, will also signify a new way for non-profits like the Foundation to raise funds to support their causes beyond traditional fundraising means.
Currently, the acquired site comprises the 14-storey long-term care facility Windermere Care Centre (with 207 beds) and a three-storey, 26-unit rental apartment building. The previous owners of the property were Dan McDonald and Margaret Marchiol.
Although no formal plans have been announced for the future development plans for the property, Foundation president/CEO Angela Chapman said one of the keys to the deal was that Windermere will be leased to VCH for operation, turning the partially private facility into a wholly public one.
“They may have wanted to take those beds out of the public system – or maybe even remove the property completely from long-term care,” she added. “So we’ve now made sure those beds – in a very good facility... in a prime position next to Vancouver General Hospital – are now secured as long-term beds in the [public] system.”
Chapman noted that VCH, the Foundation and Windermere are working “to ensure a seamless transition for residents, their families, staff and vendors.
Plans are less clear on the rental apartment front. Chapman noted that city bylaws mandate that any new development must at least replace the existing 26 units, but whatever the Foundation decides to build will likely involve increased density due to the site’s proximity to both VGH and a major artery like Oak Street.
“From the perspective of density, it is an under-utilized area of the city...,” she said. “Our objective will be over the coming years to redevelop that [land] in support of Vancouver Coastal Health and their space needs for providing health care for all British Columbians.”
The Foundation, however, said there is no firm redevelopment plan yet.
The process of planning what will become of the on-site residential units will be a multi-year process, officials noted. In the meantime, the Foundation has hired a property management firm (through a proper request-for-proposal process) to manage the building and address tenants’ needs.
“Our goal is to ensure that we protect the asset that we have,” Chapman noted. “Now that this is an asset, we will make sure it continues to be a functional place for people to live, as long as we are operating that current building. It is an investment at the moment.”
The announcement comes as the non-profit fundraising sector faces increasing challenges, which have been further exacerbated by the COVID-19 pandemic and the associated economic uncertainty.
Even before the pandemic, there have been signs of trouble for the industry. In 2019, a federal Special Senate Committee on the Charitable Sector report found that a combination of shifting Canadian patterns for donating and a lack of long-term federal program funding was concerning for the industry’s future.
Given that a charity mainly relies on three sources of funding (government support, donations and earned income), having two of those sources put under stress means that the third – earned income – should be explored in developing “innovative approaches... to ensure the future viability” of funding sources, the report said.
Among the report’s recommendations is an item that implores Ottawa to “provide greater clarity on permissible revenue generation activities for registered charities,” and - in that sense - Chapman said the VGH Foundation’s real-estate decision is a reflection of a new potential way for non-profits to generate funds for its causes.
She added that while the Foundation will be busy with developing this property in the next few years (thus ruling out any other forays into real estate in the near future), there is no reason that the real-estate investment avenue won’t be revisited years down the line if the Windermere Care Centre venture proves successful.
“One of the things that every foundation and not-for-profit [group] grapples with is an aging donor base and how to maintain its sort of revenue,” she said. “And I think this is just one example of getting creative with assets that you have in order to realize the revenue to support your cause.”