ADMINISTRATIVE REPORT

Date: June 26, 2000
Author/Local: M.Pham/6422

RTS No. 1591

CC File No. 5807

Council: July 25, 2000

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services in consultation with the Director of Legal Services
SUBJECT:	Coal Harbour - Encroachment Agreements for the Cordova Street Extension between Thurlow and Bute Streets

RECOMMENDATION

THAT the Director of Legal Services be authorized to enter into encroachment agreements for the Cordova Gap extension, on the terms and conditions outlined in this report and acceptable to the Director of Legal Services and the General Manager of Engineering Services. No legal rights will arise until the encroachment agreements are registered in the Vancouver / New Westminster Land Title Office to the satisfaction of the Director of Legal Services.

COUNCIL POLICY

There is no applicable Council policy.

PURPOSE

This report seeks Council authority to enter into the encroachment agreements outlined in this report, as part of the extension of Cordova Street between Thurlow and Bute Streets.

BACKGROUND

At a Public Hearing on June 29, 1995, Council approved the application by Marathon Developments Inc. ("Marathon"), acting on behalf of Canadian Pacific Properties Inc., for the rezoning of 501 Bute Street (Harbour Green Neighbourhood) subject to a number of conditions, including the obligation to build the extension of Cordova Street between Thurlow and Bute, as well as the obligation to close the gap between Cordova Street and the abutting properties.

The future Cordova Street will be built approximately 11 metres above the existing grade. In order to fill Cordova Street up to its final grade, Marathon proposes to build a retaining wall that would, for the most part, abut against the existing buildings on the south side of Cordova Street. Negotiations between the City, Marathon and the adjacent property owners have been on-going since January 1998. A number of engineering and legal issues had to be resolved - briefly:

1. The Renaissance Hotel currently uses the Cordova Street right-of-way for loading purposes. The retaining wall must be located such that the hotel can maintain its service access. Otherwise, the hotel will be forced into costly renovations to accommodate an alternate loading scheme.

2. Three buildings have open air parkades which will be enclosed by the retaining wall structure. Upgrades to these parkades are required to maintain air circulation and to meet fire code regulations.

3. The structure bridging the gap between the retaining wall and the adjacent buildings (the "Gap") has been designed to provide full closure of the Gap, with a treatment that is consistent with the Coal Harbour streetscape, visually pleasing and pedestrian friendly, but also encourages opportunities for new retail at the Cordova Street elevation and pedestrian connections to the elevated plazas and building.

4. Ultimate ownership of the parcels of land remaining between Cordova Street and the escarpment property line (the "Gap Parcels"), be it by the City or the adjacent property owners, had to be determined.

DISCUSSION

Staff, Marathon and the adjacent property owners (New World Estates and Golden Properties) have now agreed in principle on a proposal which addresses the issues previously listed and meets the objectives of all parties. The proposal is as follows:

1. As shown in Appendix A, the Cordova Street retaining wall will abut the buildings along the eastern end of the block. However, between the Renaissance Hotel's loading dock and Thurlow Street, the retaining wall will be offset by 5-8 metres from the adjacent building to provide the hotel with service level access at the current grade (i.e., approximately 11 metres below the final Cordova Street surface level).

2. A concrete deck structure is proposed to close the Gap, with a sidewalk treatment consistent with the Coal Harbour development, as well as planters and benches to enhance the pedestrian experience. A staircase to the Renaissance Hotel's upper plaza is also proposed to encourage pedestrian connections to the new Cordova Street.

3. Air intake and exhaust ducts at the surface of the Gap closure structure are proposed to maintain the required air circulation in the enclosed parkades.

4. The Gap Parcels will be transferred to the City for dedication as road. The City will be responsible for the maintenance and repair of the retaining wall and Gap closure structure.

As a result of the Gap Parcels being dedicated as City road, the service access lane and staircase to the hotel's upper plaza, the driveway crossing to the 1111 W. Hastings buildings, as well as several air intake and exhaust ducts for all buildings would be located on City road and will require encroachment agreements. Staff propose the following terms for the encroachment agreements, which have been agreed to in principle by the adjacent property owners:

1. Each of the owners of the three adjacent properties will enter into separate encroachment agreements with the City respecting the encroachments attributable to their properties.

2. The adjacent property owners will be responsible for the maintenance and repair of all encroachments.

3. The term of the encroachment agreements will be for the period the encroachments are used by the property owners, or the life of the buildings to which the encroachments are appurtenant, whichever period is shorter, subject to compliance with the terms of the encroachment agreements.

4.Standard release and indemnification clauses apply. As well, as per standard City practice, the maintenance and repair obligations of the property owners are secured by way of a statutory right of way and an equitable charge.

5. The annual encroachment fees will be waived.

Staff support the proposed terms of the encroachment agreements because City interests are protected by (i) ensuring that the property owners are responsible for the maintenance/repair of the encroachments, (ii) providing the City with adequate security for the maintenance/repair obligations, and (iii) obtaining a release and indemnity in respect of potential liabilities associated with the encroachments.

It is also logical for the term of the encroachment agreement to be tied to the life of the buildings. Indeed, if the buildings were to be re-developed, presumably they would be re-designed such that the encroachments would no longer be required. For example, a re-developed hotel could have its loading bays located at the Cordova Street upper level, thereby eliminating the need for a service level access lane.

The foregone encroachment fees total approximately $28,000 annually, with about $26,000 attributable to the hotel service access lane. Staff consider the compromise to the property owners to be an acceptable one given the length and complexity of negotiations on this issue so far, and the importance to the City of extending Cordova Street and tying it in with the existing road network. Moreover, the encroachments occur over portions of City road that are unused from a transportation or servicing standpoint - the encroachments have therefore very little impact on City operations. Finally, both Marathon and the property owners are already incurring significant costs for the construction of Cordova Street (approximately $1.8 million) and the upgrading of existing buildings.

CONCLUSION

This report seeks Council's approval for execution of the encroachment agreements outlined in this report, all part of the extension of Cordova Street between Thurlow and Bute Streets. Staff recommend that Council approve these terms to facilitate a solution to a complex problem, and to allow construction of an important portion of new road to proceed.

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(c) 1998 City of Vancouver