|
CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Date: |
April 6, 2004 | |
Author: |
Clyde Hosein | |
Phone No.: |
7616 | |
RTS No.: |
04095 | |
CC File No.: |
1805 | |
Meeting Date: |
April 20, 2004 |
TO: |
Vancouver City Council |
FROM: |
Director of Facility Design and Management in consultation: with General Manager of Parks and Recreation, General Manager of Community Services, Director of Vancouver Public Library, and Director of Real Estate Services |
SUBJECT: |
Mount Pleasant Civic Centre, 1 Kingsway: Authorization to Tender |
RECOMMENDATION
THAT the Director of Facility Design and Management be authorized to tender the construction of the Mount Pleasant Civic Centre project and report back to Council on budgets and source of funding prior to the award of a construction contract.
CITY MANAGER'S COMMENTS
The projected funding shortfall for the Mount Pleasant Civic Centre project outlined in this report is indicative of a situation faced by several projects in the Capital Plan. Coupled with the uncertainty around recent and projected construction cost increases, this shortfall presents a dilemma for staff working on this project. If budget approval is sought prior to the tender process, the project cost will almost certainly exceed the funding by the time the project proceeds. In order to provide Council with a reasonably certain funding requirement for the project on which a decision to proceed can be based, it is necessary to complete the tender process. This process will not commit Council to proceed with the project. A report back will be necessary to establish the necessary funding and appoint a contractor. As a result, the City Manager RECOMMENDS approval of the foregoing.
COUNCIL POLICY
Projects are not to be tendered without a source of funding in place.
Construction contracts over $300,000 in value are to be awarded by Council.
PURPOSE
This report seeks Council's authorization to tender the Mount Pleasant Civic Centre project and report back to Council with project costs, final funding source and preferred contractor once tenders for the construction of the project are received.
BACKGROUND
The 2000-2002 Capital Plan allocated $4.75 million to rebuild Mount Pleasant Community Centre. At the same time, a proposal to relocate the Mount Pleasant Branch Library came forward and staff began to investigate the possibility of co-locating these two facilities.
On September 18, 2001, Council approved the purchase of the property at 1 Kingsway for $3.45 million, to be funded on an interim basis by Property Endowment Fund. In recommending purchasing this property, staff indicated that Council could consider a joint-use development concept for the site.
The 2003-2005 Capital Plan provided funding for a joint-use civic facility in the Mount Pleasant district comprising:
· $4.85 million for a branch library;
· $1.5 million for a Childcare facility;
· an additional $1.15 million for the Community Centre, and
· $175,000 for a sustainable pilot project.
The remaining $2.0 million of funding for the "civic" component of the project was to be provided from Community Amenity Contributions derived from the redevelopment of the South East False Creek area. In addition, it was anticipated that up to 70,000 SF of housing could be provided on the site with funding from the PEF.
In 2002 Council approved the engagement of Henriquez Partners Architects, in association with Burgess Austin Cawley & Associates to undertake an economic feasibility study of development options for multiple uses on the site, including, a community centre, branch library, childcare facility, and housing. The feasibility study concluded that market residential development would be appropriate on this site, however, only limited viability was foreseen for commercial development. Based on this recommendation Council supported the recommendation to include a maximum amount of housing and that it be managed as market rental as part of the PEF.
DISCUSSION
Current Status of the Project:
The project has been proceeding through design in consultation with the Community and has an active Development Permit Application. Open houses and presentations were held July 23, 2003 and March 23, 2004, a Roundtable of local groups has been convened, and an active website at www.1kingsway.ca was recently updated with the March 2004 Newsletter and Development Permit documents. The City's Special Advisory Committee on Disability Issues has struck a special sub-committee that has been actively involved with the permits. The project is currently proceeding through design development and preparing for a presentation to the Urban Design Panel. It will be ready to proceed to tender in November 2004, with construction anticipated to begin in late 2004.
Preliminary cost estimates, however, indicate that due to unusual escalation in the cost of construction there will be insufficient funding to complete the project. The following section summarizes the current status of the project costing and recommends that Council authorize the Director of Facilities Design and Management to proceed to tender in order to firm up costs and put Council in a better position to make an informed decision on whether to proceed in whole or in part with construction.
For details of the project see Appendix "A" and for preliminary plans see Appendix "B".
Existing Funding For 1 Kingsway Project:
The civic portion of the project comprises the Community Centre, Library and Childcare facility. The approved funding for the civic portion of the project, excluding the market housing, is as follows:
Component |
Area (SF) |
Funding |
Source |
Sustainable Building Pilot Project |
- |
175,000 |
2003-2005 Capital Plan |
Mt Pleasant Community Centre |
30,750 |
5,750,000
|
2000-2002 Capital Plan
|
Mt Pleasant Library |
12,000 |
200,000
|
2000-2002 Capital Plan
|
Child Care |
6,800 |
1,050,000
|
2003-2005 Capital Plan
|
TOTAL |
$16,475,000 |
The original proposal for the development included in the 2003-2005 Capital Plan was that the minimum housing (55,000 SF) component would be funded by the PEF at a cost of approximately $9.9 million, bringing the total project to $26.4 million.
Current Cost Estimates:
Since the Capital Plan estimates were developed in 2001/2002, several factors have impacted on the cost of the project. In moving from conceptual to final design, costs associated with delivering the contemplated program have increased, there was no contemplation that the project would be required to pay City-wide DCL's; and construction costs have seen significant increases.
Increased costs are a problem faced by construction projects throughout the lower mainland, including several projects in the 2003-2005 Capital Plan. These are driven by:
· Increased volume of work currently being undertaken in the Lower Mainland and projected in the immediate future.
· Limited pool of skilled labour, specifically in the areas of concrete formwork and iron workers. British Columbia has lost much of its construction labour force to Alberta and Washington State in recent years and coupled with the current volume of work, has driven up the costs of labour.
· Increased material costs, including the cost of reinforcing steel, metals, plywood and other materials, have risen 30 percent and continue to rise. This has resulted in some bids now including qualification clauses on the materials with regard to future price escalation beyond 30 days.
Projects have experienced abnormal increases over the past year of up to 18 percent. This increase, which was not contemplated at the time the Capital Plan was developed and approved, is expected to continue over the next few years and could have a significant impact on the final cost of this project.
As a result of these uncertainties in prices, the project undertook significant cost-cutting measures and obtained separate estimates from its cost consultants and two major contractors. Estimates showed significant increases in the costs and identified risks associated with future escalation during the time period up to tender.
Based on current estimates, which are based on a construction timetable beginning in late 2004, it is anticipated the cost of the project has risen by $3.5 to $4.6 million for the "civic" portion of the project. Costs for the housing component have increased to approximately $23.0 million based on maximizing the permissible square footage at 78,550 SF from those utilized at the conceptual stage (55,000 SF) and an increase in construction costs as follows, GST and DCL charges not included:
|
Available Funding |
Current Projection |
Shortfall | |
Civic Portion |
$16.475 million |
$20.0 to $21.2 million |
$3.5 to $4.6 million |
Market Housing and Retail |
$22.5 to $23.6 million |
In a companion report, the Director of Finance, in consultation with the Capital Plan Staff Review Group recommends a strategy for dealing with funding shortfalls in a number of construction related projects in the 2003-2005 Capital Plan, including the Mount Pleasant Civic Centre project. That report identifies additional funding allocations to the civic component of the project of $4.1 million bringing the total project funding to $20.57 million. If Council agrees to proceed to tender, the Director of Finance and Director of Facility Design and Management will report back following the tender process on any additional funding required. At the same time, the Director of Real Estate Services will report back on the outlook for the market housing component of the project.IMPLEMENTATION PLAN
Subject to approval of the recommendation of this report, and assuming the decision to proceed to construction is made, the projected schedule is as follows:
Urban Design Panel |
April 28, 2004 |
Development Permit Board |
June 07, 2004 |
Tender |
November 2004 |
Construction |
December 2004 to December 2006 |
Regularly scheduled cost reviews will be performed and analysed to identify if cost savings may be realized and to prevent any increase in costs not associated with cost escalation occurring in construction.
CONCLUSION AND RECOMMENDATION
As noted above the current economic climate in British Columbia has made it extremely difficult prepare a definite estimate without including a large contingency to cover risks associated with recent and projected escalation in construction costs. Given the high risk in attempting to project the cost of the project, staff is recommending that the Director of Facility Design and Management be permitted to tender the project and report back on the actual cost so that the source of funding for the budget shortfall can be identified, prior to awarding a contract.
All efforts will continue to be made by the design team to seek economies where they do not impact long term costs or the viability of the programs.
- - - - -
Appendix A
Mount Pleasant Civic Centre Project
The Site:
The site is located on the southeast corner Kingsway and 7th Avenue at Main Street and is zoned C-3A Commercial District Schedule. It has an area of 40,708 SF and a potential buildable area of approximately 122,100 SF, subject to approval by the Development Permit Board, and a total development potential, including amenity bonus, of 132,300 SF. Cultural and recreational uses are outright, while housing is conditional. The proposed plan calls for development of approximately 130,600 SF.
The Project:
The project comprises a Community Centre, Branch Library, Child Development Facility and Market Housing.
The project mandate is to achieve LEEDTM Silver rating and will contribute to the City's Corporate Climate Change Action Plan, Greenhouse Gas Reduction program and reducing ongoing energy costs.
Community Centre Renewal:
The Mount Pleasant Community Centre at 16th Avenue and Ontario Street is poorly situated in relation to the area it is intended to serve. Mount Pleasant is very near Douglas Park and Riley Community Centres, such that all three centres have overlapping catchments. However, Mount Pleasant residents living east of Main Street and north of Broadway do not have easy access to their designated community centre.
The current Mount Pleasant Community Centre at 27,400 SF in floor area corresponds to a medium-sized community centre in the Vancouver context. The new community centre facility will be approximately 30,750 SF. This increase reflects the added demands resulting from a more central location, along with an allowance for population growth in the Mount Pleasant and East False Creek Neighbourhoods and proposed South East False Creek development. Areas in the existing Community Centre dedicated to pool changing and squash courts will be replaced by more versatile space in the new community centre.
Branch Library:
The Mount Pleasant Branch Library currently rents space (5,985 SF) at Kingsgate Mall at Broadway and Kingsway. The location is situated to serve the branch's current catchment area, however, the current branch has issues of size and crowding impacting on use, functionality, operations and service delivery.
Mount Pleasant Branch is responsible for the two storefront operations, Riley Park (located in Little Mountain Neighbourhood House at 24th Avenue and Main Street) and Kensington (located at Kingsway and Knight). The new branch in the 1 Kingsway project will continue to service Mount Pleasant community effectively, but would not be situated to adequately serve the residents of Riley Park, as it is outside the Riley Park catchment area.
In addition to the operations, service and physical improvements that would result from the proposed joint library/community centre, the relocation of the branch involves a number of supplementary benefits:
· The new location would continue to serve the current branch catchment area in addition would be strategically placed to serve the projected population growth in South East False Creek.
· A joint facility will provide convenience to public of a "one-stop-shop" and finding our community amenities in one location and benefit to the public with the potential for more innovative and diverse programming, as well as joint promotion of activities and events.
· The Library's multipurpose room and some of its internet computers will remain available to the public under the Community Centre's supervision when the Library is closed.
The new branch library at 12,000 SF will address current crowded and inadequate space to serve the library's present catchment area of approximately 32,000 people as well as allowing for the projected population growth and anticipated future use of the library facility from South East False Creek.
Child Development Facility:
The City's childcare strategic plan sets out a vision in which childcare and child development services (e.g., parent/caregiver drop in, parenting programs, family place, etc.) are viewed as a continuum that is integral to healthy child development. Child development programs build on the foundation of childcare and, integrated into a community hub model, provide a range of services to families and children in a coordinated and accessible manner. The proposed child development centre at 1 Kingsway will be the first purpose-built child development hub. The facility is based on a 49-space licensed childcare centre, however, the configuration of the space will be shaped by a community needs assessment which examines service needs. The Vancouver Public Library has expressed interest in working collaboratively with Social Planning in developing programs with the child development centre to promote early literacy. Collocation with the library provides an excellent opportunity to explore new models.
Opportunities to develop shared space with the community centre for the purposes of out-of-school childcare, preschool and/or parent/child drop-in programs would also be significant benefit to co-location, and is supported by the Community working groups from Mount Pleasant.
Housing:
The feasibility study undertaken by the consultant included a detailed financial analysis to determine the viability of developing housing with the remaining floor area available after fulfilling the space requirements of the Library, Community Centre and Childcare. The analysis did not consider the addition of retail space to the facility because it was not considered appropriate.
A number of development scenarios have been studied ranging from the use of housing to reach full optimization of the site to a less dense development. The rationale for considering the different project massing options was based on assumptions pertaining to Planning approval, anticipated community reaction to project size, and overall timing issues for obtaining final development approvals.
The conclusions from this financial analysis suggest the best scenario to pursue in order to maximize development efficiencies and return on investment is to build the largest housing component possible. The Development Permit application contains a near maximum amount of housing at 78,550 SF FSR.
The Director of the Housing Centre concluded that in view of changes within BC Housing, elimination of the BC Home Program and refocus of the province's funding towards a seniors assisting living program, that any funds available for subsidized housing may be better spent on another site where the benefits of a 60-year lease could be better exploited for a larger number of units. As a result, it is considered appropriate to develop the housing component of this project as a fully market-driven rental development.
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