ADMINISTRATIVE REPORT

Date: May 27, 2002
Author/Local: Yin Lee/7409

RTS No. 2743

CC File No. 5104

Council: June 11, 2002

TO:	Vancouver City Council
FROM:	Director of Real Estate Services
SUBJECT:	Lease of 1696 West 5th Avenue

RECOMMENDATION

THAT Council authorize staff to enter into a lease on 1696 West 5th Avenue with Unlimited Leasing & Rental Ltd. subject to:

1. The following general terms and conditions:

Term: Five (5) years from the Commencement Date

Commencement Date: August 1, 2002 or upon issuance of the development permit whichever is earlier

Rent: Commencement Date to July 31, 2003 - $5,480 per month;

August 1, 2003 - July 31, 2004 - $5,977 per month;

August 1, 2004 - July 31, 2005 - $6,475 per month;
August 1, 2005 - July 31, 2006 - $6,973 per month;

August 1, 2006 - July 31, 2007 - $7,470 per month;
plus GST if applicable. Rent includes property taxes as if levied.

Two months rent free: August and September 2002

Outgoings: The tenant to be responsible for all outgoings.

Option to Renew: An option to renew the lease for a five-year term, such renewal is subject to one year written notice of termination by the City.

Rent Review: August 1, 2007 to market rate if the lease is renewed. In no event shall the new rent be less than the preceding year.

Use: Car rental and vehicle detailing works.

Permits: The tenant to be responsible for all required permits.

2. Other terms and conditions as deemed appropriate by the Director of Real Estate Services and the Director of Legal Services;

3. The lease document is to be drawn to the satisfaction of the Director of Real Estate Services and the Director of Legal Services;

4. No legal rights and obligations are hereby created and none shall arise until the lease is fully executed;

5. A commission fee in the amount of $10,960 plus GST be payable to Sutton Group Seafair Realty from PEF; and

6. The rental revenue to be credited to the PEF.

BACKGROUND

The City acquired the premises located at 1696 West 5th Avenue (see Appendix A), legally described as Lots 1 & 2, Block 269, District Lot 526, Plan 590 ( PID 013-698-206 & 013-698-222), in March 1998 as part of the parksite assembly for the Burrard Slopes neighbourhood. The property comprises 11,953 sq. ft. of leasable space and is zoned IC-l (light industrial uses).

DISCUSSION

Although the location is desirable, the rental market is soft and the property is too big for most prospective tenants. Staff received a considerable number of enquiries but did not receive any written offers.

Unlimited Leasing and Rental Ltd. submitted an offer through an agent. The company intends to spend approximately $235,000 for tenant improvements. After negotiations, Unlimited Leasing & Rental Ltd. signed an Offer to Lease, and Staff is now submitting the offer to Council for approval.

CONCLUSION

The premises is a holding property. It has been vacant for ten months because of market conditions, the size of the space and lack of parking. Staff recommend that Council approve the lease of the subject property to Unlimited Leasing and Rental Ltd. on the terms and conditions negotiated by Staff.

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(c) 1998 City of Vancouver