Vancouver city planners have reversed their earlier position and are backing the proposed redevelopment of the former Army & Navy department store on the Downtown Eastside.

City staff say that a newly submitted proposal than an earlier version that failed to win their support. Planners say the revised proposal is better, even though the project would be larger and taller and does not fully conform with existing city development policies.

In a report heading to council Tuesday, planners recommend that councillors send two rezoning applications to a public hearing, a move that would clear the way for a 39-storey rental tower on West Hastings Street and a 20-storey mixed-use hotel tower on West Cordova Street. The two proposals are being considered as one development application.

The revised project would add 738 rental homes to the neighbourhood, including hundreds of below-market units just west of the Downtown Eastside, and marks a notable shift in planners’ stance on redevelopment of the long-vacant site.

The proposal is being advanced by Army & Navy Properties in partnership with local developer Bosa Properties, representing the defunct retailer’s first major foray into real estate development.

While planners acknowledge the scale of the towers could set a precedent for future highrise rezonings in an area long protected from such development, they say the revised design, housing mix and public benefits warrant further consideration.

Brian Davie, president of the Gastown Residents Association, told Postmedia that the proposal has generated mixed reactions among nearby residents.

“A lot of people would prefer the Hastings tower to be lower because of the view that will be lost with a building that tall,” Davie said. “But we’d rather have the building taller than not at all.”

Bosa Properties and Army & Navy Properties previously sought to redevelop the historic former department store without planners’ support. The company filed its original rezoning application in January 2025 on behalf of Army & Navy Properties owner Jacqui Cohen, know that the project would not have city planners’ support.

Cohen’s grandfather Sam Cohen founded the Army & Navy department store chain in 1919, and she ran the business before it folded due to the COVID-19 pandemic.

Known as the Cohen Block, the redevelopment is located at the nexus of the DES and Gastown, which is Vancouver’s oldest district. Like the originally proposed development, the larger project would contain a social-housing component owned and operated by the non-profit B.C. Indigenous Housing Society, and market-rental units.

Like the previously proposed two buildings, the revised ones would contain retail and other commercial spaces. A 179-room boutique hotel would also be part of the development mix.

The planning department’s support for the revised development application is more in line with historical practices. City planners endorse most of development and rezoning applications before city council considers them for approval. But in 2023, the planning department, then led by then-chief Theresa O’Donnell, declined to endorse the Army & Navy redevelopment, because the proposed buildings exceeded the area’s height restrictions.

Obviously, the newly proposed taller towers do, too. But planners say that the impacts of the larger proposed project are “balanced by the redevelopment opportunity and public benefits.”

Planners are also willing to make an exception for a facade-only restoration of a heritage building on the West Cordova Street portion of the redevelopment. The city’s heritage-building policy calls for heritage properties in that area to be fully restored.

The city staff report going to council says that the increased density and height in Gastown, coupled with the limited facade-only retention approach, “persist as risks and trade-offs of this proposal.

But the Army & Navy store’s shuttering in 2020 has left vacant storefronts along both streets and buildings that are slowly deteriorating.

“The new project’s commercial ground floor, as well as the proposed uses and public benefits will provide an opportunity to reactivate the public realm and generate new activity in the area,” states the report.

Pictured: Army & Navy redevelopment proposed in 2023.

Rendering: City of Vancouver