1450 South West Marine Drive

ADMINISTRATIVE REPORT

Date: July 14, 1999

Author/Local: Yin Lee/7409

RTS No.: 00834
CC File No. 5807

Council: July 27, 1999

TO:

Vancouver City Council

FROM:

Manager of Real Estate Services

SUBJECT:

Annual Charge for Encroachment - That Portion of
Southwest Marine Drive Abutting 1450 South West Marine Drive

RECOMMENDATION

THAT Council authorize the Manager of Real Estate Services to enter into an encroachment agreement for the 434.6 square metre (4678 square feet) encroachment area as shown in heavy outline on the attached Appendix A, subject to the following conditions:

1. Annual charge is to be set at $19,200 per annum inclusive of property taxes as if levied, for each year of the three year term of the encroachment agreement commencing July 1, 1999. The charge is to be paid in twelve equal installments;

2. Annual charges for renewal terms are to be established by the Manager of Real Estate Services;

3. The encroachment is subject to six months notice of cancellation by the City; and

4. The encroachment agreement is to be drawn to the satisfaction of the Director of Legal Services, the Manager of Real Estate Services and the City Engineer. No right or legal obligation is hereby created and none shall arise until the agreement is signed by both parties.

GENERAL MANAGER'S COMMENTS

The General Manager of Corporate Services RECOMMENDS approval of the foregoing.

COUNCIL POLICY

The Encroachment By-law No. 4243 (the "By-Law") establishes general terms and conditions for encroachment agreements prepared pursuant to the by-law including a formula for determining annual charges.

PURPOSE

This report seeks authority from Council to set an annual charge for the use of the encroachment areas, shown in heavy outline on the attached Appendix A ("Encroachment Areas") for each of the three years term of the encroachment agreement and to authorize the Manager of Real Estate Services to establish the annual charges for renewal terms.

BACKGROUND

The City previously entered into two agreements with the abutting owner of the hotel and beer and wine store at 1450 South West Marine Drive to use the Encroachment Areas: a lease for parking only for the area west of the commercial crossing and an encroachment agreement for the area east of the commercial crossing to allow the encroachment of a portion of the beer and wine store and miscellaneous items such as newspaper dispenser, planters, pop machine, bicycle racks, etc. The rent for the lease was $356 per month ($4,272 per annum) and the charge for the encroachment agreement was $376 per month ($4,512 per annum). The lease is on a holdover basis and the encroachment agreement is ongoing; both documents are subject to six months' notice of cancellation.

It is much more efficient to administer one agreement and review increases in the charges at the same time. After discussing with Legal Services and Engineering Department, staff decided to use an encroachment agreement for the total encraochment.

Under Part C of the Schedule to the By-Law, the annual charge for the land occupied by the planter and the portion of beer and wine store would be $2,375 per annum. The schedule, however, does not set out an annual charge for the area to the west of the commercial crossing used for parking and signage. Under Section 10(1) of the By-Law, no annual charge shall be paid for an encroachment not included in Part C of the schedule unless Council determines that the circumstances warrant the imposition of an annual charge.

The Manager of Real Estate Services recommends that a fee should be charged for the 258.8 sq. m. (2,785.7 sq. ft.) used for parking and signage. The added parking benefits the daily operation of the hotel and the beer and wine store and the tenant is generating income from the signage. The City should receive revenue for allowing the tenant to use City land to benefit the hotel and beer and wine store business and generate income. In the opinion of the Manager of Real Estate Services, an annual charge of $19,200 per annum for the Encroachment Areas is reasonable. Therefore, the Manager of Real Estate Services seeks authority from Council to set an annual charge of $19,200 per annum for the Encroachment Areas for three year term of the encroachment agreement effective July 1, 1999 and to seek authority from Council to establish the annual charges for further renewal terms.

The annual charges for an encroachment are usually paid on an annual basis. However, the tenant has been paying on a monthly basis for the previous lease and encroachment agreement, approved by Council in 1988. The charge was negotiated with the assumption that the tenant would continue to pay on a monthly basis. Therefore, the Manager of Real Estate Services recommends that the annual charge is to be paid in twelve monthly installments.

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TO:	Vancouver City Council
FROM:	Manager of Real Estate Services
SUBJECT:	Annual Charge for Encroachment - That Portion of Southwest Marine Drive Abutting 1450 South West Marine Drive