Kingsgate Mall, at East Broadway and Kingsway, in Vancouver.Kerry Gold/The Globe and Mail
Kingsgate Mall is a tired old 1970s shopping centre at the heart of Vancouver’s push for density. The three-acre site looks all the more outdated as the city grows around it.
Its faded charms, bereft of big-chain retail and glitz, have made it a beloved east side institution that feels more like a community centre than a shopping mall. But it’s also an oddity; a key chunk of underdeveloped land adjacent to the Broadway subway line currently under construction.
The paralysis is due to a long-standing feud between the landlord, the Vancouver School Board, and the lessee, one of B.C.’s biggest developers, Beedie Development Group. The VSB has been through several legal rounds with the developer in an effort to raise their rent, based on arguments over the market value of the land. The board argues the rent for 2017 to 2027 is far below market value. In 2022, it won an arbitration ruling setting the rent at $9.6-million per year for that period. A B.C. Supreme Court judge didn’t agree, and in a 2024 ruling said Beedie owed just $1.65-million a year in rent. The VSB took the case to the B.C. Court of Appeal this month, and Beedie won again.
The beloved east side institution feels more like a community centre than a shopping mall.Kerry Gold/The Globe and Mail
Company president Ryan Beedie was elated and relieved by the decision, he said in an interview last week, alongside managing partner Rob Fiorvento.
“If someone doesn’t look at it [closely], they could go, ‘Well, they should just pay more rent,’” said Mr. Beedie. “No. We have a lease that outlines what the rent is. And how can we pay $9-million a year in rent? We’re generating $3.5-million.”
Mr. Beedie says they have no way of making more from the property.
“We can’t redevelop it. The lease says it has to be a shopping centre.”
Mr. Beedie said it’s been “stressful,” and the relationship with the school board “is fractured.” He estimates his company has spent more than $2-million in legal fees over the last seven or so years.
“They could have cut a deal with us and avoided this decision. And they would have been far better off than they are now.”
The win means that Beedie will likely renew the lease when it comes up for another 10 years, beginning in November, 2027. And because the rent is based on market value, which has declined, Mr. Beedie said he expects the rent to drop further.
“It is almost a certainty that we will be exercising our fourth option and we expect to have the ability to maintain our leasehold interest for the next 45 years. The rent during the next renewal period will very likely be less than what we are paying now.”
The three-acre site looks all the more outdated as the city grows around it.Kerry Gold/The Globe and Mail
Mr. Beedie said his company has a right of first refusal if the VSB decides to sell the property.
Mr. Beedie said he has long wanted to build residential towers on the site, and both the province’s transit-oriented area legislation and the City of Vancouver’s Broadway Plan support high densities near major transit hubs. He said he has presented redevelopment proposals to the school board, and offered to partner with them.
“It’s like asking someone to dance, and they don’t want to dance with you,” said Mr. Beedie.
Mr. Beedie and Mr. Fiorvento expressed frustration that they haven’t been able to move forward with proposals, especially following a period of market highs.
“We’ve been spending all this time in litigation and watching the value deteriorate substantially,” said Mr. Fiorvento.
“There were some discussions at one time about even housing the VSB offices in there,” he added. “It couldn’t get to a decision.”
The contentious issue of market value and rent goes back to before Beedie Development Group owned it. Mount Pleasant elementary school used to stand at the corner of East Broadway and Kingsway, but in the early 1970s, the school board decided to demolish the school and lease the land for 99 years, starting with a 25-year term and followed by 10-year lease renewals.
Kingsgate Mall is a key chunk of underdeveloped land adjacent to the Broadway subway line currently under construction.Kerry Gold/The Globe and Mail
In 1999, the school board went to arbitration with the original lessee to argue the rent. A panel concluded that it should be based on the low-density shopping mall that is permitted according to the zoning, not the higher density that is permitted, subject to approvals from the city, which could take a much longer time.
Rent is based on 8.25 per cent of the market value, or a percentage of the revenues from the mall, said Mr. Fiorvento, who said the deal favoured the landlord.
By 2005, BDG had taken over the lease. In 2017, the developer was paying $750,000 a year when it came up for renewal, according to court documents. They went to arbitration in 2021, and BDG argued for a lease of $1,212,750 a year, based on a market value of $14.7-million and its use as a shopping mall. The VSB argued for a basic rent of $11.475-million, based on city-approved higher density, arguing it would then be worth $135-million. That time, the panel sided with the school board and put the value of the property at $116.5-million, which would result in a rent of $9.6-million.
Beedie successfully challenged the decision and rent was set at $1.65-million, based on the current permitted use.
Mr. Beedie doesn’t know yet if the VSB will pursue further legal action.
“The school board has not been a prisoner to this lease,” he said. “They could have gone and rezoned the property. … The value goes up, the rent becomes unaffordable, and people like us aren’t exercising their options and they can take it back. They’ve done nothing to fully enhance or capitalize on the inherent value of their freehold interest.”
The VSB was asked about Beedie Development’s offer to settle, redevelopment options, and if they plan to continue to pursue legal action.
“The board pursued this matter in the interest of the public and the education system it serves,” VSB spokesperson Jiana Chow responded. “While the board respects the court’s decision, it is taking the time necessary to review the findings carefully.
“Throughout this matter, the board acted collectively (through its established decision‑making processes, including majority vote) and in good faith, guided by legal advice and its fiduciary obligation to steward VSB assets responsibly. The board engaged in good faith discussions, repeatedly sought the detailed information required to assess potential resolutions through its collective governance process and carefully considered all proposals put forward by the tenant.
“While the court did not rule in the board’s favour, pursuing legal clarity on the interpretation of a long‑term ground lease was a governance decision made by the board in the public interest. The board is working with legal counsel to fully consider the court’s ruling.”