The Vancouver School Board (VSB) has failed in a bid to have the B.C. Court of Appeal overturn lowered rent for the Kingsgate Mall site it leases out.

A B.C. Supreme Court judge had ruled that Beedie Development Group should pay VSB $1.65 million per year for the East Vancouver site, and not the $9.6 million per year that a 2022 arbitration panel had arrived at.

With Beedie set to decide whether to renew the 10-year lease for the mall site on Nov. 19, 2026, the court noted that a decision on the school board’s appeal needed to be heard in a timely fashion.

Ultimately, a majority of justices that heard the case found that there was no legal error committed when the lower court said the developer could pay the lower rent amount.

“VSB has not established that the [Supreme Court] judge erred in her exercise of discretion to reach this disposition,” Justice Janet Winteringham wrote.

In a statement shared to social media, Beedie Developments president Ryan Beedie said that it was unfortunate that it took “years of costly litigation” to reach the outcome in the case, and it was the fourth consecutive time courts had ruled in the developer’s favour.

He said the developer had offered to mediate the case on numerous occasions, but the school board wasn’t willing to.

“In our view, the decision to prolong this dispute reflects a troubling mismanagement of a significant public real estate asset and an unnecessary expenditure of public funds,” Beedie wrote.

CBC News has reached out to the school board for this story.

Long history of lease

Kingsgate Mall, on Kingsway and Broadway in East Vancouver, was first leased out by the city’s school board in 1972. It is a 99-year lease, with an initial 25-year renewal period and a renewal every 10 years after that.

The first renewal term for the property came up in 1997. Neither the VSB nor then-tenant Royal Oak could agree on a lease amount, so the matter went to an arbitration panel in 1999.

That panel set a lease for the site, and ruled that the annual rent should be based on the land’s immediate redevelopment value and current use as a retail space.

Beedie took over Royal Oak’s lease in 2005, paying $750,000 and then $760,000 a year. In 2015, they applied to renew the Kingsgate lease again, but once again the board and developer couldn’t agree on terms.

The dispute led to a 2022 tenancy arbitration panel hearing, in which the 1999 hearing’s interpretation was rejected.

At the time, the panel said the property’s worth should be assessed off the value it could have if it took advantage of available upzoning.

The ruling increased the worth of the land to $116.5 million, and set the rent to $9.6 million per year.

But Beedie was successful in arguing in B.C. Supreme Court that the 2022 decision misinterpreted the 1999 ruling over what constituted “immediate” redevelopment value.

Supreme Court Justice Anita Chan reverted to the 1999 interpretation of current property value, setting the site’s worth at $20 million and the annual rent to $1.65 million.

Latest appeal rejected

In its latest appeal to B.C.’s highest court, the VSB argued that Chan hadn’t applied the correct standard of review when looking at the decision of the 2022 arbitration panel.

It also said that Chan should have remitted the case back to a tenancy arbitration panel instead of deciding on the facts herself.

One out of three Appeal Court justices that heard the case agreed with the VSB — but ultimately, a majority agreed with Beedie and declined to use the higher rent suggested by the 2022 panel.

The exact future of the Kingsgate Mall site is unclear.

It will be located close to the Mount Pleasant SkyTrain station once the Broadway subway extension is completed — but any future redevelopment would have to be approved by the VSB.

Kingsgate is beloved by many in East Vancouver, even featuring in an Arkells and Tegan and Sara music video.

WATCH | The Arkells and Tegan and Sara shot a music video: