On May 29, I submitted a freedom of information request to the Liquor Distribution Branch (LDB) asking for the business case for moving the campus BC Liquor (BCL) store from the Village to Wesbrook Place. After numerous delays – it took less time to open the new store than to provide a 15-page document – the document was released last week. You can read it here: Revised Proposal for relocation of British Columbia liquor store #192 UBC to new store location at Wesbrook Village – UBC south campus.

For clarity, the Liquor Distribution Branch is the formal name of the governmental organization that owns and operates BC Liquor Stores. LDB will be used to refer to the corporate entity throughout this post, while BCL will be used to refer to the actual store locations.

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Why did the UBC liquor store move? It can be paraphrased like this:

The primary motivation for moving the liquor store was not to better serve those living, working, or studying on campus; the primary motivation for moving the liquor store was to better serve those NOT living, working, or studying on campus.

The LDB knows that because they are the only liquor store on campus they can move wherever they want, within reason, and they will still have a liquor monopoly on campus. They are under no threat of competition. The LDB saw an opportunity to move the BCL next to an anchor tenant in Save on Foods that will draw people from all over, with lots of free parking, in an area of campus that will see the most population growth in the next decade. So, they moved. That’s it, in a nutshell. The reasoning in the business plan makes sense on the surface, and echoes the publicly stated reasons reported in the Ubyssey and The Campus Resident (page 10). But the business case is lazily done and seems like an extended exercise in confirmation bias. For the nitty gritty, read on.

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Talk of moving the liquor store started in January 2009, when UBC Properties Trust (UBCPT) approached the LDB about space available in Wesbrook Place. Construction of Save on Foods was well underway at the time, and the grocery store opened in September 2009. While it seems like the LDB was quite receptive to UBCPT’s offer of space in Wesbrook there was a slight snag: at the time, they were in the middle of a 15-year lease – signed in 2002 – for their space in the Village.

While it is possible for the LDB to get out of its lease in the Village early, the soonest date they can do it is on November 1, 2013. So, even though the BCL store has already moved, the LDB is still committed to its lease in the village for another 14 months. During this time, the LDB will be paying rent on both properties, and if the BCL space in the Village remains vacant for an extended period, it’s because the landlords are getting paid anyways.

Although all the details of rental rates are redacted, presumably UBCPT offered them a sweet deal on rent. Not only so that the LDB would be willing to eat a year’s worth of rent on a property they aren’t using, but because rental rates are priced per square foot. The new BCL is about 4,800 sq. ft., while the old BCL was just under 3,000 sq. ft. so the new store probably costs more overall. Yet, having a bigger store, or being able to offer a better selection as a result, are not listed as an advantage or goal of the new location. They made a pro/con list of the new location, and it reads as follows:

Pros for Proposed Location

Rapidly growing UEL community and UBC market housing on the south campus

Save-On Foods is the Anchor Tenant of the new Wesbrook Village

Excellent complementary retail that includes RBC Royal Bank, Blenz Coffee, Boston Pizza, and TD Bank

Close proximity to UBC residences

Ample parking, 100 on-grade and 200 underground parking stalls

Better location to serve both the student and residential customers of the UBC market place

Cons for Proposed Location

None identified at this time

Only the Wesbrook location was evaluated using a pro/con list. There was no similar list made for the merits of staying at the existing location in the Village. Saying Wesbrook Place is a “better location” for a liquor store implies that some sort of fomal comparison was made between two or more locations, based on a measurable set of criteria. This did not happen (or it wasn’t included here if it was).

The list of pros seems like it was probably generated by UBCPT staff trying to sell the LDB on the move and plugged right into the business case without even seeing if the reasons were valid, or seeing how it stacked up to the Village location. Let’s take a look. Yes, a lot of population growth will happen in Wesbrook. But there will also be a lot happening in Acadia and Block F eventually, and the access to those neighbourhoods will be via University Boulevard not 16th. Point for Wesbrook, there’s no real anchor tenant in the Village. But on complementary retail, the Village currently does much better. Two of the four places on the Wesbrook list of complementary retail (TD bank and Boston Pizza) don’t yet exist, and haven’t been announced as tenants if they are indeed opening in the neighbourhood, which is why it seems like this list was written by UBCPT. The Village is also in close proximity to UBC residences, and in most cases, closer than Wesbrook. While the Village might not have 300 parking spaces, there seems to be enough to handle the people going there. Instead, a pro for the Village might be that it has lots of foot traffic and a bus stop serving 4 busy routes, including the busiest route the lower mainland. The Wesbrook location is just “better”. The Village location is not. Somehow. Don’t get me wrong, Wesbrook is a completely reasonable place to put a liquor store, but the case for the move, as presented here, seems lazy, exaggerated and generated for the purpose of rationalizing a pre-determined conclusion.

The LDB is well aware that the campus BCL is the only liquor store around these parts. The closest private store is over 2 km away in Point Grey and it is extremely unlikely that any private competition will appear at UBC in the next decade. They characterize their market share as “100.0%”, having the campus liquor market cornered without even trying. And given that they close at 7 pm most days, they’re not really trying. The best opportunity for growth they saw was to capture more of the off-campus market. Fair enough.

The way to get these off-campus people into the store, they reasoned, is with “ample free parking” and proximity to a “strong anchor tenant” in Save on Foods. Says the report: “The current UBC GLS [Government Liquor Store] does not benefit from the existing residential density bordering UBC land however, the LDB believes that relocating the existing UBC GLS next to the Save on Foods will result in the relocated store capturing new market share from the drawing power of the major food store.”

In the period from 2005/06 to 2009/10, the report notes that sales at the Village location had increased by 45%, although growth has been stagnant in recent years. With the move, the LDB is predicting a 10% growth in sales in each of the first two years, then 1% annual growth in the next three years. Of the major initial growth, the LDB expects 3% to come from increasing population on campus, in Wesbrook in particular, while 7% will be from the off-campus driving to the store. Those guesstimates are based on projections of growing population numbers on campus and a customer survey.

The customer survey was conducted over two days in January 2011 and consisted of copying down the licence plates of all cars in the Save-On-Foods parking lot and mapping where those cars came from. They concluded that “Save on Foods has a very strong draw into a secondary trade area that extends just east of Dunbar street.” The details of the study were not included in the business plan, but was it surprising to find that most cars weren’t coming from just a block over? It seems like this type of survey is merely an exercise in confirmation bias. No such survey was done to see what traffic in the Village is like or where it came from, so there’s no comparison between the sites. Pedestrian and transit traffic was not measured at either site. Just the cars. So again, how do we know Wesbrook is “better”, in the absence of any actual comparison?

UBC developed Wesbrook with a mixed-use model, where the ethos is that people can live, work, and shop all in the same community, emphasizing walking, biking and transit. It’s a bit ironic that the LDB is moving their store in the hopes of enabling more people with cars from outside the community to drive to the store, encouraged all the while by UBCPT.

Only time will tell whether the move actually helps the LDB’s bottom line as predicted. I want to make clear that the Wesbrook location is a completely reasonable place to put a liquor store and that the reasons for moving are understandable. The population of Wesbrook will grow immensely in the next decade. “Ample Free Parking.” However, the location in the Village wasn’t really given a fair shake. It was simply assumed to be inferior without any real evaluation or comparison. But with no new private liquor stores at UBC likely for at least a decade, people will be forced to adjust to the new Wesbrook location. Under monopoly conditions like this, a business case doesn’t need to be particularly sound to still succeed.