ADMINISTRATIVE REPORT

Date: June 14, 2000
Author/Local: S. Harvey/6001
RTS No. 01604
CC File No. 5104

CS&B: July 27, 2000

TO:	Standing Committee on City Services & Budgets
FROM:	Director, Office of Cultural Affairs in consultation with the Directors of Real Estate and Facilities Development
SUBJECT:	837 Davie Street - Lease of Amenity Bonus Facility & Capital Allocation

RECOMMENDATION

A. THAT the City accept the surrender of the sublease of the amenity bonus facility at 837 Davie Street granted by the City to the Community Arts Council of Vancouver dated August 13, 1992, effective June 30, 2000, and that each party release the other from any liability under the sublease.

B. THAT Council approve a 20-year sublease of the amenity bonus facility at 837 Davie Street to the Canadian Music Centre and the Vancouver New Music Society at a nominal rate ($1), subject to terms and conditions as outlined in this report and to the satisfaction of the Director of Legal Services in consultation with the Directors, Office of Cultural Affairs and Community Services; and

FURTHER THAT Council approve capital funds of $75,000 for capital repairs and improvements to the amenity bonus facility at 837 Davie Street as outlined in this report; source of funds to be the 2000 Capital budget.

GENERAL MANAGERS’ COMMENTS

The General Manger of Community Services RECOMMENDS approval of A and B, noting that B represents a grant and as such requires eight affirmative votes.

COUNCIL POLICY

The Amenity Bonusing Program, as approved by Council in 1986, provides for the sublease of an amenity bonus space to a Vancouver-based non-profit social service and/or cultural organization at a nominal rate for a term of up to 20 years and includes a series of requirements and obligations of the subtenant with respect to public service and financial management.

Council approved a funding allocation of $1.5 million for City-owned social service and cultural facilities within the 2000-2002 Capital Plan.

PURPOSE

This report seeks Council’s approval to improve and repair a vacant amenity bonus facility at 837 Davie Street previously occupied by the Community Arts Council, and to enter into a new sublease with the Canadian Music Centre and Vancouver New Music Society.

BACKGROUND

In 1984 Council approved an amenity bonus at 1190 Hornby Street and a sublease of the space to the Community Arts Council of Vancouver (CAC). Among the terms of the sublease, the CAC committed to “exhibit to the general public the works of aspiring artists .... for viewing by the public at least 30 hours each week”. As well, the sublease required the CAC to “initiate and maintain a fund raising drive to meet the increased costs of occupying the Leased Premises in the event the Subtenant is granted a second sublease”. The CAC, now in its 15^th year of occupancy has neither sufficient funds to meet those costs, nor the organizational capacity to meet the public service objectives of the amenity bonus facility. The CAC is currently working with a consultant to redefine its role. While this review is not yet complete and may well find a future role for the CAC, the Board has determined that they will not be able to meet the City’s requirements for consideration of a subsequent term and have communicated their decision to vacate the facility on or before June 30, 2000. A letter from the President of the Community Arts Council is attached to the report as Appendix A.

The lease between the City and the developer (Swan Wooster Holdings Ltd.) provided for relief from operating costs for a term of 15 years, the costs having been capitalized and credited to the owner as part of the density bonus calculation. That term expires on October 31, 2000. A subsequent modification of the lease between the City and the current building owner (Standard Life Assurance) in 1996 provided for a further five years of relief (to October 31, 2005) if the Community Arts Council and Standard Life Assurance continued

as subtenant and owner respectively. Staff have met with Standard Life and continue to explore their interest in extending the modification of the lease to new subtenants.

The City’s lease of the amenity space continues to 2084 and the City has the right to grant subleases with the Landlord’s consent. Staff have reviewed a series of potential social service and cultural tenants and propose a sub-lease of the amenity to the Canadian Music Centre (CMC) and the Vancouver New Music Society (VNMS).

DISCUSSION

In considering potential recipients of a sublease of the amenity bonus space at 837 Davie Street, staff have reviewed Council’s Cultural Facilities Priorities as well previously approved, but not built, bonus proposals.

In February 1998 Council approved an amenity bonus at 488 Robson for use as a music library and resource centre, operated by the Canadian Music Centre (CMC) and the Vancouver New Music Society (VNMS). The applicant was given until April 27, 2000 to comply with Zoning and Development Bylaw, but has not. No development permit was issued.

The Canadian Music Centre, now in its 41^st year of operation, makes the music of Canadian composers available to the public as well as professional musicians. It has become a one-stop library and information centre -- through its library collection, information resources and production and distribution activities.

The Vancouver branch has a circulating library, free and open to the public, of 15,000 music scores, and recordings of the works of 475 professional Canadian composers. The Centre serves a range of music interests - from the general public, to student choirs, bands, and orchestras through to professional music organizations, artists, composers, conductors, broadcasters and scholars. The Centre also serves as a focal point for the music community providing space for meetings, workshops and lectures.

The Vancouver New Music Society has provided Vancouver audiences with the contemporary music for more than 25 years. They are active in commissioning, creating and presenting works of contemporary classical composers through a concert series, the New Music Ensemble, new opera and musical theatre work and the Vancouver International New Music Festival.

Sublease

It is Council policy to charge a nominal rent ($1) to non-profit subtenants in amenity bonus spaces. The amenity bonus space, as assessed by the B.C. Assessment Authority, does not attract property tax. The occupancy costs, common area costs, associated with the amenity bonus space will become due as of November 1, 2000 and are estimated to be @ $7/sq.ft.

Unlike the previous bonus sublease with the CAC, the CMC/VNMS will have to assume all occupancy costs associated with the space, the “bonus” for operating costs having been fully utilized by the Community Arts Council. While this does not provide the same benefit enjoyed by the CAC or that of the previously approved CMC/VNMS bonus, the sublease of this space reduces the CMC/VNMS’ current rental costs, provides security of tenure and an accessible downtown location for the music library.

Subject to Council approval, staff will execute a sublease with the CMC/VNMS on those terms and conditions as are generally outlined in Appendix “B” of this report, as well as other terms as are required by, and satisfactory to the Director of Legal Services in consultation with the Director Office of Cultural Affairs and the Director of Real Estate.

Capital Improvements
The amenity space has sustained significant wear and tear over the past fifteen years and is in need of repair and refurbishment.

Facilities Development staff have estimated the costs of repair and refurbishment, including the provision for a wheelchair-accessible washroom to be $75,000. A preliminary budget estimate is attached to this report as Appendix “C”.

Subject to Council approval, this work can be completed over the summer and the amenity space ready for occupancy October 1, 2000.

FINANCIAL IMPLICATIONS

The proposed sublease transfers all of the City’s obligation contained in the headlease to the subtenants.

The source of funds for the capital repairs are the 2000 Cultural Facilities budget of the 2000-2002 Capital Plan.

CONCLUSION

Staff support the sublease of the refurbished amenity bonus facility at 837 Davie Street to the Canadian Music Centre and Vancouver New Music Society for the purposes of a publicly accessible music library and resource centre.

* * * * *

Appendix A on file in the City Clerk's Office

Appendix “B”
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Proposed Music Library and Resource Centre
Canadian Music Centre/Vancouver New Music Society

Draft Sub-Lease Terms

Term

… Twenty years;

Rent

… Nominal rent of $1 per annum;

Taxes, if any

… payable by the subtenant;

Operating Costs

… all costs assumed by City are passed on to the subtenant;

Third party use

… No rights to assign, sublet, grant, mortgage or licenses third party use. Periodic use by other non-profit cultural groups will be permitted;

Covenants of the subtenants

… To operate a non-profit music library and resource centre.

All other terms and conditions required by the Director of Legal Services.

Appendix “C”
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