Langley school site cost tops $30 million

The cost of a future school in a rapidly developing Langley neighbourhood has pushed past the $30 million mark—and actual construction is still years away.

Last week, Langley's school district approved the purchase of a new five-acre elementary school site in Willoughby for $32.5 million. The figure is $7 million more than the school district had expected two years ago when it asked the province to fund the purchase of the site. Although most of the money is coming from the province's coffers, the district will kick in about $3 million.

The purchase shows how land prices are set when a government wants to buy a lot for a new school. And the price and process itself, as explained in detail in a recent report to council, underscores the massive cost of building enough schools for rapidly growing numbers of students in Langley and nearby Surrey. 

The number of students attending Langley's schools has been soaring in recent years. 

Enrolment has increased by more than 800 students in the past year, and previous year-over-year student surges have topped 1,200 new learners. All those additional students are straining the capacity of Langley’s schools. And although new facilities are being built, they aren’t coming fast enough to catch up to demand. The district is opening a new 555-student elementary school in northwest Langley this year, but it will immediately be filled to capacity. 

Just keeping up with enrolment will require building and opening new schools every year. But the purchase price of the new school site shows just how expensive that will be—even before construction takes place.

Each year, school districts around the province create lists of capital projects they would like funded over the coming five years. The capital plan goes to the provincial ministry of education, which decides which schools in which districts to fund.

Langley’s school district’s most recent capital plan laid out $726 million in suggested school spending. Another capital plan will be created this spring. The projected cost of school projects in Langley has continually grown in recent years, from $665 million in 2022 to $696 million in 2023 to more than $700 million last year.

A large chunk of those projected costs are for land acquisitions. The pending purchase of the new Willoughby site—at 74 Avenue and 198B Street— for $32.5 million suggests the actual cost of buying the school properties may be significantly higher than budgeted.

The new site acquisition was at the top of the district’s capital plan submitted to the province in 2023. At the time, the site’s cost was pegged at $25 million. (Assessment BC has continually underestimated the value of the land. Its assessed value this year is $14.5 million.)

Although the province gave the go-ahead to buy the property, the school district still has five five other prospective school sites it wants to buy around Langley. Those include three 15-acre middle school sites and two five-acre elementary sites. The school board has estimated the projected cost at an astounding $282 million. All that spending does not include the cost to actually build the school.

The land costs incentivizes school districts to plot expansions for existing schools. The cost to add a new modular classroom to an existing school is approximately $1.5 million—or $50,000 for each new student space. The new Latimer school site, before any building has started, already exceeds that per-student cost.

The land costs are driven up by the fact that the new school sites must be built in areas that are developing at a rapid pace. New schools inevitably require the same large tracts of land that are prized by developers looking to build new townhome or apartment projects. That pushes up the value of the land on the private market. And even though the school district doesn’t end up in bidding wars, that developer demand is still the price paid for the property.

The option to buy

The school district’s report on the $32 million purchase provides a detailed look at just how school sites get purchased in BC and who sets the price.

In 2020, four years before it bought the Willoughby school site, the district signed a deal with the landowner that gave it an option to purchase the property within the next eight years. That agreement also ensured that the property wouldn’t be publicly listed for sale.

However, the option contract didn’t set a future price. Instead, the district agreed that if it decided to buy the site, it would do so at “fair market value.” The agreement set out how the two parties would arrive at that value.

After agreeing to exercise its option last summer, the district and the owner of the property—a development company registered as Mitchell Latimer 73—weren’t able to agree upon a purchase price. 

So the two sides instead each hired appraisers. The board’s appraisal firm pegged the lot’s value at $27.2 million. The sellers’ appraiser suggested the lot was valued at $6 million more—$33.6 million. Because the two appraisals were so far apart, the two appraisal companies themselves appointed a third company to provide an independent assessment. The final purchase price would then be the average of the two closest values. 

The final appraiser pegged the value at $31.4 million. That figure was closer to the higher number, so the midpoint between those two figures became the final purchase price: $32.5 million. With GST and legal and consultant fees included, the final cost is $33.1 million, 31% higher than the school district’s estimated cost just two years ago.

The site hasn’t actually been bought yet, however. The ministry of education must still approve the purchase of the property, although that is typically a formality.

Other cities

Both Chilliwack and Abbotsford have their own plans to buy new school sites. 

The Abbotsford School District’s most recent capital plan outlines three desired land acquisitions. The district wants to buy a site for a new 400-student elementary school, 600-student middle school, and 1,100-student secondary school, all in the McKee Peak area. 

But the district expects the total purchase price of all three sites to only be $30 million. That could reflect the fact the area has not yet been largely developed, or access and slope challenges that reduce the value of land. It could also reflect optimism that may not be borne out when the district finally gets around to trying to buy the land.

The Chilliwack School District wants to buy one new site for a new elementary school on the south side of the city. It has estimated that doing so will cost about $25 million.

Mission’s school board wants to buy an elementary school site in Hatzic to replace the area’s current school, which is undersized. It estimates the cost of land to be about $10 million. It has also requested sites for two schools in the Silverdale area, where it has designated land for massive development over the coming years. It estimates the cost for each site to be about $12 million.

Finally, the Fraser-Cascade School District has asked the province to help it buy a new elementary school on Agassiz’s western side. It has pegged the cost at just $5 million.