SUPPORTS ITEM NO. 6
P&E COMMITTEE AGENDA
DECEMBER 14, 1995
ADMINISTRATIVE REPORT
Date: Nov. 30, 1995
Dept. File No. MCGG
TO: Standing Committee on Planning and Environment
FROM: Director of Land Use and Development, in consultation with the
Manager of Real Estate and Director of Legal Services
SUBJECT: Modifications to the Lease and Licence Agreements with the
Marpole Museum and Historical Society - 8743 S.W. Marine
Drive.
RECOMMENDATION
THAT Council approve the following modifications of the
recommendations approved by Council on March 9, 1995 (enclosed in
Appendix A), contained in an Administrative Report dated February
17, 1995:
(1) delete reference in Recommendation (1) to the City "may
terminate" and replace it with a reference to the City "shall
terminate";
(2) delete Recommendation (1)(a)(i) [which required the Society to
obtain a fund-raising partner acceptable to the City (the
"Partner") by January 1, 1996] and replace with the following:
"(1)(a)(i) by October 1, 1996 the Society has not achieved the
following:
(A) executed the lease and license;
(B) submitted, to the satisfaction of the General Manager of
Community Services, a detailed fundraising strategy and plan
and final restoration program report;
(C) have unconditional commitment of $37,700 (1994 dollars) in
cash donations or pledges of materials or services in-kind
necessary to complete phase I (i.e. stabilize and secure the
building) of the restoration program, as described in the
October 1994 draft restoration program report, prepared by The
Iredale Partnership;" and;
(3) delete the reference in Recommendation (1)(a)(ii) to "January
1, 1997" and replace it with a reference to "January 1, 1998";
(4) delete the reference in Recommendation (1)(a)(iii) to "January
1, 2000" and replace it with a reference to "January 1, 2001";
(5) delete Recommendation (4) [which required the Society to
establish a joint trust fund with the Partner into which was
to be deposited all public (including government grants) and
private contributions to the Society for the implementation of
the restoration plan; in addition, the funds were to be used
only for the purposes of putting the restoration plan into
effect and for the purposes of operating the Building and the
licence area].
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services notes that the
recommendation addresses the fundraising deficiencies previously
identified when Council approved the lease and license agreements
for this property in March 1995 and hence recommends approval of
the foregoing.
COUNCIL POLICY
Council approval is needed to amend terms of a long-term lease and
licence agreements.
SUMMARY
The Marpole Museum and Historical Society (the Society) has not been
able to demonstrate to the City that it has the resources and expertise
to raise the necessary capital to restore the historic Colbourne House
(8743 S.W. Marine Drive). The partnership requirement in the Council-
approved lease and license agreements, intended to ensure more resources
on the project, has proved technically unworkable for the Society. In
this report, staff recommend that Council delete this partnership
requirement and instead require the Society to meet specific fundraising
objectives by October 1996. If the Society is successful, it can
continue with the project.
As yet, the Society has not executed the lease and license agreements,
approved by Council in March 1995. If the lease and license agreements
are not amended as recommended, the Society would lose its investment in
the project and the City would likely lose a valuable heritage resource,
as there are no other known parties interested in undertaking its
restoration.PURPOSE
The purpose of this report is to seek Council's approval of the
amendments to the lease and license agreements (see Appendix A), between
the City and the Society, for the historic Colbourne House. The
amendments would delete provisions that the Society obtain a fundraising
partner and establish a joint trust fund with the partner. These would
be replaced with a provision that the Society achieve specific
fundraising objectives by October 1, 1996.
BACKGROUND
In October 1993, Council approved, in principle, the restoration and
conversion of the historic Colbourne House into a social service centre.
It also approved a one-year license to enable the Society to demonstrate
its financial resources and expertise. Council requested staff to
report back within a year on the Society's detailed restoration program
and fund-raising capabilities.
When staff were preparing to report back, the Society submitted a draft
restoration program report, but had not submitted a complete fund-
raising plan nor demonstrated that it had the fund-raising capability to
undertake this project. To compensate for this shortcoming, staff and
the Society included the following two requirements in lease and licence
agreements they negotiated and recommended to Council:
- that the Society obtain a fund-raising partner acceptable to
the City by January 1, 1996; and
- that it establish a joint trust fund with the partner into
which all public and private contributions for the
implementation of the restoration plan shall be deposited.
Council approved the recommendations in March 1995, but the Society has
not yet executed the agreements.
In June 1995, the Society informed staff the "joint trust fund with the
Partner" requirement conflicts with the regulations governing their
potential fundraising partners. It asked that this term be deleted.
Again, staff worked with the Society and its potential partners to
resolve the aforementioned technical issue in order to avoid amending
the Council-approved lease and license agreements. Inasmuch as no
feasible solution has been found, staff feel amending the lease and
license agreements is necessary.
DISCUSSION
Technical Issues with Lease and License Terms
In order to meet the requirement for a fundraising partner and establish
a joint trust fund, the Society approached the Vancouver Marpole Lions
Club and the South Vancouver Rotary Club. It was originally believed
that these potential partners are registered charities. It was later
learned both organizations are service clubs and as such, do not have
charitable tax status. For this reason, these clubs cannot enter into a
charitable joint trust fund with the Society. However, removing the
obligation to establish a joint trust fund with the partner changes the
nature of the controls and the intent of the partnership.
The Society's Past Performance with this Project
Staff are reluctant to recommend a long-term lease and license with the
Society without a fund-raising partner or demonstrated performance, in
view of the following:
- the Society has not produced a detailed fund-raising plan;
- the Society has not met Council's requirement that it demonstrate
that it has the ability and volunteer resources to raise the
necessary funds for this restoration project;
- a reported organizational conflict - some board members resigned in
protest during the last two years;
- conflict with the Society's initial restoration consultant,
resulting in a lawsuit;
Proposed October 1996 Fund-raising Performance Criteria
Rather than require the Society to find a fundraising partner, staff
recommend establishing specific performance criteria linked to the
Society's restoration program. The Society will be allowed autonomy
over its financial program, but it will be expected to perform at a
certain standard and within an established timeframe. It is recommended
that the Society be required to complete the following by October 1,
1996:
- execute the lease and license agreements;
- submit a detailed fund-raising plan and strategy and a final
restoration program report;
- obtain commitment of the necessary resources, in cash or in-kind,
to complete phase I of the Society's restoration program report.
These conditions have been discussed and agreed to with the Society.
The October 1, 1996 deadline and monetary amount have been extrapolated
from the draft restoration program report and schedule and the Society
feels it can easily achieve this goal.
Extension of the Lease and License Schedule
After the issue of the joint trust fund was raised in June 1995, staff
worked closely with the Society and its two potential partners to
explore numerous avenues to find a resolution. During this period, the
Society's fundraising activities were stalled. In view of this setback,
staff recommend that the existing cancellation terms of the lease and
license agreements, which in effect are performance standards for the
Society, be extended for another year. This amendment is reflected in
staff's recommendation.
ALTERNATIVES/OPTIONS
Council has two options to consider:
A. To Amend Lease and License Agreements, i.e. replace the partnership
requirement with a performance requirement. (recommended by staff)
Advantages:
- simplifies the operating structure of the Society, enabling it to
readily sign the lease and license agreements and proceed with its
mandate;
- enables the Society to qualify for grants;
- advances the fund-raising goal of the Society (the public is more
inclined to contribute if the Society has a signed lease);
- establishes clear criteria for the Society to demonstrate its
fundraising ability;
Disadvantages:
- the City takes a risk in leasing to an organization that has not
yet demonstrated that it has sufficient ability and volunteer
resources to undertake a project of this scale;
- involvement and participation in decision-making is limited to the
members of the Society.
B. Status Quo
Advantages:
- none
Disadvantages:
- the Society is unlikely to proceed and, therefore, risks losing its
investment, representing monies spent in the preparing the draft
restoration program report and securing the building and the site;
- the City would, most likely, lose a valuable heritage resource, as
there are no other known parties interested in the project.
CONCLUSION
Given that the partnership requirement in the lease and license
agreements for the historic Colbourne House has proved unworkable for
the Society, staff are recommending that it be replaced with a
requirement that the Society complete certain fundraising objectives by
October 1, 1996. Staff consider this a reasonable extension and if
these conditions are not met the City shall cancel the lease and licence
agreements and forego retention of this building by the Society. If the
Society is successful, it would have overcome its past shortcomings and
can proceed with the project to restore for community use an important
part of Marpole's heritage. Staff, therefore, recommends that Council
approve the recommended modifications to the lease and license
agreements.
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