ADMINISTRATIVE REPORT
Date: February 7, 1996
Dept. File No. F485
TO: Vancouver City Council
FROM: Manager of Real Estate
SUBJECT: Proposed Long Term Lease: City-owned Property at 2294
West 10th Avenue (Fraser Academy)
RECOMMENDATION
The following recommendation contains a grant and EIGHT AFFIRMATIVE
VOTES are required for approval.
THAT Council approve a long-term lease for the premises situated at
2294 West 10th Avenue, legally described as Lot 2, Block 363,
District Lot 526, Plan LMP24360, to The Fraser Academy Association,
upon the following terms and conditions to replace the current
short-term lease; it being noted that no legal obligation shall
arise until execution of the new lease:
Term: 15 years renewable for another 15 years at the same rent.
Rent and Property Taxes: Rent will be $1.00 per year. No
payment in lieu of taxes as long as the property is exempt due
to the City's ownership. However, the tenant will pay such taxes
if the property becomes taxable due to ownership or legislative
change.
Use: A non-profit school for children with learning
disabilities including as ancillary use, non-profit continuing
education for adults with learning disabilities.
Use by the Public: The premises will be made available at no
cost to non-profit social service, community and cultural
organizations under terms and conditions approved by the City
from time to time.
Notification of Intention to Sell: In the event that the City's
Manager of Real Estate recommends disposing of the property, he
will notify the tenant.
Operating, Repair, Maintenance & Renovation: All at tenant's
expense; the intent is that this will be an absolute net lease
to the City.
Cancellation: The tenant will have the right to terminate the
lease upon 12 months' notice.
Assignment, Subletting & Mortgaging of Lease: Prohibited.
Business Records: Tenant to maintain and City may inspect.
Reporting Society: Tenant to become a Reporting Society.
Termination by City: The City may terminate the lease upon the
tenant defaulting after having had a reasonable period to cure
any breach of lease terms and conditions.
Other Terms and Conditions: Other terms and conditions to be
drawn to the satisfaction of the Director of Legal Services and
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the Manager of Real Estate.
GENERAL MANAGER'S COMMENTS
The General Manager of Corporate Services RECOMMENDS approval of
the foregoing.
COUNCIL POLICY
On March 8, 1994, Council approved the rezoning of the Molson site, and
the approval includes a requirement of conveying to the City, the
property occupied by the Fraser Academy, to enable continuation of this
use or others as may be approved by Council.
PURPOSE
This report seeks Council's approval of a long-term lease to replace the
existing short-term lease in respect of the City-owned Fraser Academy
premises.
BACKGROUND
The Fraser Academy is an independent, non-denominational, non-profit
school for dyslexic students from grades 1 to 12. The school was
established in 1981, with Group-2 provincial classification and operated
by The Fraser Academy Association, a registered charitable organization
in B.C. under #S-17755 and federally #071-5961-20-27. About seventy
percent of the school's funding comes from tuition and the balance from
Provincial Government grants and donations.
As one of the conditions of the rezoning of the Molson's Arbutus
Industrial Lands, Council required that the Fraser Academy property to
be conveyed to the City, to enable continuation of the use by the
Academy.
As part of the conveyance, the City took over a then existing lease,
which is still current, that stipulates a nominal rent with year-to-year
renewal and an expiry date of June 30, 1998.
DISCUSSION
The Academy requested a long-term lease intending to occupy the premises
for a reasonably long time. Furthermore, the Academy intends to
extensively improve and upgrade the building at their expense. In this
regard, a long-term tenure will be required to justify the substantial
renovation cost. The school intends to fund-raise the cost upon
assurance of a long-term lease from the City. The existing building is
over 40 years old and extensive improvement will be required to meet the
long-term need of the school.
The proposed lease terms and conditions are consistent with leases of
other City-owned cultural premises. The use of the premises by other
non-profit social service, community and cultural organizations is in
line with agreements for shared use of amenity- bonused and FSR-excluded
space.
The Academy requested a 12-month right of cancellation in order to have
the flexibility of relinquishing the lease, in the event of their space
requirement far exceeds the premises. This request is considered
reasonable, and if this should transpire, the premises will be opened to
other opportunities as may be approved by Council.
Following negotiations, the Fraser Academy has agreed to take the
premises on the terms and conditions summarized in the recommendations
of this report. The proposed terms and conditions should enable the
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Academy to continue their use as a school over the long run, and at the
same time, provide the City reasonable assurance that the usage will be
consistent with the intention of Council's policies in this case.
FINANCIAL IMPLICATION
As the rent is nominal, the proposed lease represents a grant.
The Manager of Real Estate is of the opinion that the market rental
value of the premises is $165,000 per year which is net of the annual
property taxes amounting to approximately $60,000. The present value of
the market rents over the lease term of 30 years is approximately $2
Million.
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