ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

Director of Current Planning

SUBJECT:

52 Water Street - Heritage Building Rehabilitation Program

 

RECOMMENDATION

A. THAT Council authorize the City to enter into a Heritage Revitalization Agreement to secure the conservation and rehabilitation of the Beulah Mission at 52 Water Street and to supplement Development Application No. DE407839 and the HA-2 zoning to:

B. THAT, subject to approval of RECOMMENDATION A, Council authorize a facade grant of $50,000, source of funding to be the 2003 - 05 Capital Plan.

C. THAT the agreements shall be prepared, registered and given priority to the satisfaction of the Directors of Planning and Legal Services.

D. THAT, subject to approval of RECOMMENDATION A, Council instruct the Director of Legal Services to prepare a Tax Exemption By-law for 52 Water Street for a property tax exemption which is not to exceed a value of $768,700 or a period of ten (10) years, which ever comes first;

E. THAT if the Tax Exemption By-law receives the assent of electors or is deemed approved by electors under the Vancouver Charter, the Director of Legal Services bring forth a Tax Exemption By-law providing that:

GENERAL MANAGER'S COMMENTS

The General Manager of Community Services RECOMMENDS approval of A, B, C, D, E, and F.

COUNCIL POLICY

Heritage Building Rehabilitation Program Policies and Procedures for Gastown, Chinatown and Hastings Street Corridor

Approval of grants requires eight affirmative votes

PURPOSE

The purpose of this report is to seek Council support for a Heritage Revitalization Agreement (HRA), facade grant and property tax relief to secure the rehabilitation and long-term conservation of the "C"-listed building at 52 Water Street.

46 and 52 Water Street are the first two properties to participate in the City's Historic Building Rehabilitation Program. These two reports before Council today, 46 Water Street and 52 Water Street, are companion reports and are side-by-side developments. Council is being asked to approve a similar package of building incentives. The differences for the 52 Water Street project include retaining and restoring the rusticated stone facing, windows and cornice, and to re-arrange cast iron columns to create a single entry storefront, and adding a two-storey addition. Retail use will be continued.

BACKGROUND

Gastown Heritage Management Plan: In July 2003, City Council approved a program of incentives to facilitate the conservation and rehabilitation of buildings in Gastown, Chinatown and the Hastings Corridor. The program will be available for a five (5) year period (2003 - 2008) to initiate economic activity in these historic areas through work on individual heritage buildings. The objective is to encourage owners to rehabilitate their heritage buildings by compensating them for "shortfall costs". These costs are defined as the amount required to make a project viable when a major building upgrade is completed. The City determines the amount of each incentive through site-specific analysis and compensation is given to the owner through various tools in the following order:

· Federal Historic Places Initiative Program
· Facade Grant
· Property Tax Exemption
· Transferable Bonus Density

As an added incentive for preserving low-scale historic buildings that contribute to the distinctive "sawtooth"-character of historic Gastown, the Building Rehabilitation Program (BRP) allows the City to authorize transfer of notional residual density off-site, as part of thebonus density allocation. It is referred to as notional density as there are no FSR regulations in Gastown. Therefore, the main factor in regulating development potential is the height limit. Based on this, Council established as part of the Building Rehabilitation Program that "residual" density is the difference between 5.5 FSR and the on-site FSR.

Historic Places Initiative (HPI) is a Federal Government building incentive program that awards building owners up to 20% of the total rehabilitation costs, up to a $1,000,000 maximum, in the form of a cash grant after the work is completed. This project was put forward for consideration, however, the program is in the process of being implemented and therefore it is unknown at this time whether this site will receive a federal grant. The recommended HRA has been structured to grant the owner an equivalent value of transferable bonus density if the owner is not successful in receiving a federal grant.

DISCUSSION

Proposal: 52 Water Street is located near the centre of the Gastown Historic area (please see Map in Appendix A). On behalf of the owner, Busby + Associates Architects have submitted a development application proposing to rehabilitate and code up-grade the heritage building in exchange for compensation through the BRP. The requested compensation package includes: transferable bonus density, a property tax exemption and a facade grant.

Heritage Value: This two-storey building was constructed in 1912 and is identified on the Vancouver Heritage Register as the Beulah Mission. An archival photo from the 1920s shows a tent and awning company using the premises. The archival photo indicates that there have been minor changes to the original front facade. The original stone facade, single hung wooden windows and basic storefront design, including cast iron columns, is largely intact. This building also contributes positively to the collection of low-scale historic buildings which comprise this block of Water Street.

Proposed Rehabilitation Work: It is proposed to retain and restore the rusticated stone facing, windows and cornice, and to re-arrange cast iron columns to create a single entry storefront. As the existing building only occupies half the depth of the property, it is proposed to add a two-storey addition. The existing rear brick wall will be re-constructed in place to provide a clear demarcation between new and old. Interior brick side walls and the floor joists of the second floor will also be exposed. The building will be used for a single retail tenancy, including associated storage, office and parking areas. Project elevations and floor plans are attached as Appendix B. In addition, the building will be upgraded to meet current building codes including seismic upgrading.

Heritage Revitalization Agreement: The HRA, as recommended in this report, would ensure the rehabilitation and conservation of the heritage building, along with a positive obligation on the part of the owner to maintain the building, in exchange for bonus density to be transferred off-site. The development on-site will be restricted to "as built". Development Cost Levies (DCLs) are included in the applicant's rehabilitation costs. No DCL relief is contemplated.

Rehabilitation Short Fall Cost: In accordance with Council's Heritage Building Rehabilitation Program Polices and Procedures for Gastown, Chinatown and Hastings Street Corridor, staff have reviewed the applicants shortfall costs calculation and undertaken an independent analysis. Staff have concluded that a total shortfall cost of $1,838,000 is justified for compensation in the following manner:

   

Bonus Density Implication

Federal Historic Places Initiative*

$383,000

1 421 m2 (15,300 sq.ft.)

Facade Grant

$50,000

  

Property Tax Exemption

$768,700

  

Density (to meet shortfall costs)

$636,300

2 368 m2 (25,500 sq.ft.)

     

Shortfall Cost

$1, 838,000

  
     

Notional Residual Density

$694,400

2 582 m2 (27,800 sq.ft.)

     

Total Bonus Density (assuming no HPI grant)

 

6 372 m2 (68,600 sq.ft.)

Total Compensation

$2,532,400

 

 

 

 

 

 

 

 

 

 

 

 

*Should the applicant not receive the federal grant, the HRA awards the owner this additional amount of transferable bonus density.

Tax Exemption By-law Process: The Vancouver Charter lays out the requirements for enabling a tax exemption by-law and notification process for the public . If Council approves the recommendation to provide a property tax exemption, staff will advertise notice of the proposed by-law as required by the Vancouver Charter, and state that Council may adopt the by-law after 30 days unless more than 1/20 of electors petition Council. If1/20 or fewer electors petition Council within the thirty (30) day period, the Vancouver Charter deems that the electors have approved the tax exemption, and Council can proceed to enact the by-law. If more than 1/20 of electors petition Council then a further report will recommend to Council whether or not to seek the assent of electors and the process required to do so.

The by-law will stipulate the terms under which the recommended property tax exemption will be provided. The by-law will provide a complete property tax exemption to the property for the period necessary to achieve the stipulated tax exemption of $768,700 after which the property will be fully taxable. Should the entire amount not be achieved in a ten year period, the exemption will expire and the property will become fully taxable. The exemption will be effective in the tax year immediately following issuance of an occupancy permit for the building. Staff will provide an annual report to Council on the status of this and other exemptions approved under the program.

Inventory of Unsold Density: In November 2002, the balance of unsold heritage density reached a historical high and has since been reduced to 39 683 m2 (427,164 sq. ft.). Of this amount, 18 189 m2 (195 800 sq. ft.) is being held by the heritage building owners for use on their future projects and 16 804 m2 (180,889 sq. ft.) is identified for take-up by developments and rezoning applications in process. The net balance of 4 692 m2 (50,510 sq. ft.) is available for sale. This recent take-up of density is very positive.

If Council were to approve the recommended HRAs for 46 and 52 Water Street and if, in the worst case scenario, neither project receives Federal Government heritage grants, together they will add 10 600 m2 (114,100 sq. ft.) to the inventory. The new balance of density available for sale will be 15 292 m2 (164,610 sq. ft.). Staff support this balance.

Comments of the Gastown Historic Area Planning Committee: On September 17, 2003, the Gastown Historic Area Planning Committee reviewed the application and supported the project.

Notification: In accordance with the Vancouver Charter Public Hearing provisions, a newspaper advertisement has been placed in two consecutive issues of a local newspaper. The building is currently unoccupied, therefore there are no tenants to notify. The surrounding property owners were notified. Staff have received two letters in support.

CONCLUSION

The recommended density bonus, tax exemption and facade grant would compensate the owner for the shortfall costs involved in rehabilitating this "C"-listed Heritage Register building. The recommended Heritage Revitalization Agreement (HRA) and associatedcovenant will secure the City's interest of ensuring the building is promptly rehabilitated, seismically up-graded, and maintained on an ongoing basis.

LINK TO APPENDICES A AND B

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ph20040129.htm

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