ARTICLES

Eastside Smarts
MARKETING MAGAZINE
EVE LAZARUS

How the Woodward's condo development in Vancouver's notorious Downtown Eastside is being marketed as an intelligent investment in a hot market

Vancouver's Downtown Eastside is a warehouse for the desperate: filled with crackheads, hookers, chronic alcoholics and the mentally unhinged. Of the 9,000 injection drug users in Vancouver, about half live in this bleak landscape, and up to 40% have HIV and another 90% have hepatitis C. Drive down East Hastings Street and it looks like a Dostoevsky novel. There are drug addicts shooting up in the alleys, pawn shops, scuzzy hotels and myriad agencies trying to unravel the mess including North America's first supervised injection site for heroin addicts.

Smack in the middle of this war zone is the once proud Woodward's flagship department store that went bankrupt in 1993. Just a block from tourist-filled Gastown, it's derelict and boarded up, as are the former greasy spoons and emergency shelters across the street. The only bright spot is the red posters with the rather incongruous tag line: "Intellectual Property: coming spring 2006."

Do you want to buy a condo here?

Bob Rennie reckons he'll have no problem selling out a new development in the old Woodward's building. Rennie, the founder of Rennie Marketing Systems and Rennie Condominium Resales, is the man behind the tag line and the marketing of the development. In 2004, his many projects sold $405-million worth of condos. He's been called the condo king, the Wayne Gretzky of real estate, and in December 2004 Vancouver Magazine crowned him the most powerful person in the city-beating out B.C. Premier Gordon Campbell, then-mayor Larry Campbell and billionaire Jimmy Pattison.

When I first met Bob Rennie 10 years ago I was a reporter with the Vancouver Sun and he was marketing the Residences on Georgia, a 37-storey tower-and at the time the largest downtown condo development project in Canada. It was pretty much an empty hole in the ground with a display suite, but what got him on the front page was the lineup of potential buyers that snaked around the city block. He sold 250 units within a few hours, a full two years before completion.
In the decade since Rennie cut his marketing teeth on the Residences on Georgia, he's sold dozens of different condo developments in B.C., Edmonton, Seattle, Dallas and now Toronto. They all have distinct target markets and flashy names like "George," "Raffles on Robson," and "Living Shangri-la." Most are distinctly upscale.

Now Rennie and the City of Vancouver think it's time to head east. He sees the Woodward development as a catalyst-or at least a connector-for Chinatown, Gastown and the Downtown Eastside. "The city is moving east, it has nowhere else to go," he says. "And then if you say it's moving east, what's our vision of it?"

Turns out it's an intellectual one. Simon Fraser University will move its School for the Contemporary Arts down there-hence the "Intellectual Property" tag.

Rod MacDonald, director of client services at R Group Communications, a Vancouver advertising agency that specializes in real estate marketing, says the tag line spins a number of different ways.

"It tells you there's a university facility there, but it also implies it's an intelligent purchasing decision-you're a smart person for doing this," he says. "If you were a real cagey parent you might buy a unit down there while (your kids) go to school and when they've finished you blow this off and make some money."

Rennie sees a couple of obvious target markets for the Woodward's project. There are the investors who agree that Vancouver is heading east and they're getting in early, and there are the young buyers who either want to get into Vancouver's ridiculously expensive housing market or just rent cheaper digs downtown. As Rennie points out, the mountain and city views are the same as those from Coal Harbour to the west, but at a third of the price.

"This is my pitch," he says. "If you've lived in Vancouver all your life, you look at Woodward's as questionable and forgotten and so you raise an eyebrow. But if you've lived in any other major city you look at Vancouver as an emerging area. So our second phase and our advertising is the smart money gets in early."

It's a good pitch. Over 2,000 people registered interest at woodwardsdistrict.com-Rennie's most successful website campaign to date. The plans call for staggered towers and include a 40-storey building, 200 units of social housing and a move-in date of 2009. The price for a very small slice of intellectual property will range from $200,000 to $600,000.

"I think the Downtown Eastside is petrified that they are going to get Yaletown (trendy Downtown Westside). I think some buyers are going to be petrified that it is not going to turn into Yaletown. And then there is the middle of the market that understands that both sides are going to have to accept some change and change is really hard," he says.

When I catch up with Rennie, we meet a block away from Woodward's at his new building in Chinatown. Two years ago he paid a million dollars for the Wing Sang Building, and that's just for the battered walls, the shaky staircase and 100-plus years of history. He bought it sight unseen and didn't go inside for the first six months.

"People think I'm crazy," he tells me. "Do you want to go for a walk around inside? It's scary." And indeed it is-in a dilapidated, kind of fascinating, way. But it's still pretty hard to see beyond the total dereliction and pigeon droppings.

Thing is, Rennie is anything but crazy. He's a visionary and if he's prepared to walk the talk, others will follow.

"I think he's there partly out of a commitment to the city, he wants to give something back," says Peter Ladner, Vancouver city councillor. "If you just look at the location of that part of the city and what's around it and what's growing up around it, it has a role in the future of Vancouver more than just as a trouble spot."

I follow Rennie and his constantly ringing Blackberry into the bowels of the building and we stand outside a boarded-up door. He lifts the top bar easily, but has a bit more trouble with the bottom. Looking around he finds a shovel to lever it off, rolls up his expensive shirt-sleeves and we're climbing up six flights of stairs, past rat traps, broken windows and old stoves. Built in 1889 and abandoned 15 years ago, the oldest building in Chinatown will soon be the headquarters of Rennie Marketing Systems and Rennie's own private "art space." The gallery will house contemporary artists like Richard Prince and Brian Jungen in 27,000 sq. ft. and soaring ceilings. "It will probably bankrupt me," he shrugs. The building will also butt right up against a new development of 22 "Chinatown Flats" with the Rennie marketing slogan "A Cultural Property."

A flick through the weekend paper reveals no less than five full-page ads including a self-promotional ad for Rennie Condominium Resales. The new development ads all sport a similar theme-a catchy name, a future date and either a showroom address or a website to sign up for "early registration."

Besides the website and print ads for the Woodward's project, there is a direct mailer that has an architectural rendering of the building with lots of odd looking trees, the distinctive red W and the backdrop of mountains and ocean on one side. The flip side is a mixture of colour photos of local landmarks and black-and-white photos of the people who live there.

Blake Hudema, president of Vancouver-based Hudema Consulting Group, says he likes the gritty reality of the ad. "He's not trying to tell you this is Kerrisdale or West Vancouver, this is something different, it's something edgy. I don't think anybody anticipates that the area will all of a sudden become 'clean.' It will probably maintain a real character, an edge to it in the future, but one that is safe for people who live there and safe for people who visit the area."

Now that Rennie has stirred up interest and a mailing list for Woodward's, the next step is to close the sale. A presentation centre opens in April and much of the boarded-up old Woodward's building will likely disappear this summer.

"The debate is: Do you blow it up because you can, or do you take it down a brick at a time? Which will have the best financial result and the least community impact?" he says. "My vote is to implode it, get the publicity for it so people see that change is really happening. It's like ripping off a band-aid-just do it all at once."