Date: June 22, 2000
CC File No. 5104
RTS No. 01320
P&E: July 27, 2000
Standing Committee on Planning & Environment
General Manager of Engineering Services in Consultation with the Director of City Plans, Director of Real Estate Services and Director of Legal Services
Proposed Lease of a Portion of Cornett Road, East of Skeena Street
A. THAT Council close, stop-up and lease to Vancouver Film Studios ("VFS") that portion of Cornett Road east of Skeena Street, (64,910 square feet) shown hatched on the plan attached as Appendix "A", subject to the following conditions:
1. The term of the lease to be five (5) years, with three (3) years certain, with the lease to contain a one (1) year notice of cancellation (exercisable by Council after year two) should the lease area be required for any municipal purpose;
2. The rental for the first three (3) years of the lease to be $78,962.00 per annum inclusive of all real property taxes, plus GST and PST if applicable. Rent in the fourth year and each subsequent year shall be adjusted by the annual percentage change in the Consumer Price Index (all items ). In no event shall the rent for any year of the Term be less than the preceding year;
3. The lease to contain two (2) options for additional five (5) year terms, subject to a one (1) year cancellation provision (exercisable by Council at any time during each renewal term);
4. The lease area to be used to provide security to the "film campus", and for access, parking and loading only, plus incidental uses related to the film studio;
5. There are to be no buildings or structures on the lease area, except a gate (staffed at all times) and a non-permanent gate house across Cornett Road at Skeena Street, such gate to be designed, built and operated to the satisfaction of the City Engineer;
6. The lessee is to maintain the lease area, including responsibility for drainage and snow removal, in a manner satisfactory to the City Engineer;
7. Upon expiry or termination of the lease, the lessee is to be responsible for restoration of the lease area to the satisfaction of the City Engineer;
8. The City, public utility companies, the GVRD, and all emergency response agencies are to have the right of entry, at any time, to the lease area for the purpose of installing, maintaining, and repairing public utilities, and providing emergency response services;
9. The lessee to assume full responsibility for liabilities, loss and damages from their occupancy or use of the lease area, and to insure the proposed lease area with a comprehensive general liability and property damage insurance policy to the satisfaction of the Director of Real Estate Services and the Director of Risk Management;
10. The lease to contain covenants from VFS that they are the occupants of all land that abuts the portion of Cornett Road to be leased, and any other covenants required by the Director of Legal Services so as to satisfy Sections 289A and 291A of the Vancouver Charter;
11. The lessee to be responsible for construction of a public viewing area, of Still Creek, at the intersection of Cornett Road and Skeena Street, and for enhancement of Still Creek along the length of Cornett Road to be leased to the satisfaction of the Director of City Plans and the City Engineer within twenty-four (24) months of the lease being executed;
12. The lease agreement to be to the satisfaction of the Director of Legal Services, the Director of Real Estate Services, and the City Engineer and may contain other terms and conditions to the satisfaction of the Director of Legal Services, Director of Real Estate Services, and the City Engineer.
B. THAT no legal rights shall arise and no consents, permissions, leases or licenses are granted hereby and none shall arise or be granted hereafter unless and until all contemplated legal documentation has been executed and delivered by all parties.
C. THAT Council authorize the Director of Finance to hold the annual income from the lease in a Still Creek/Greenway Enhancement Reserve to be used for future initiatives toward achieving Council objectives to protect, enhance and daylight Still Creek, including acquisition of properties in fee simple or rights-of-way, and other protection and enhancement initiatives in the Grandview Boundary area in order to create a continuous pedestrian/bicycle pathway linking Burnaby Lake to False Creek and the BC Parkway at 29th Avenue.
D. THAT once the form of all legal documentation has been approved by the City Engineer, Director of Legal Services and the Director of Real Estate Services that the Director of Legal Services be authorized to execute and deliver such documentation on behalf of the City.
The authority for closing and disposing of streets and lanes is set out in the Vancouver Charter.
On July 12, 1988 Council confirmed its objective for Still Creek to maintain the open state of the water course, and to seek future improvements, including reclamation of culverted portions, to enhance the appearance of the Creek as an amenity which contributes to the image of the area, and ultimately to provide public access to a continuous pedestrian/bicycle pathway linking Burnaby Lake to the B.C. Parkway at 29th Avenue Station.
On April 24, 1990 the Still Creek CD-1 Guidelines were adopted by Council which in part state: "Still Creek shall be retained and enhanced as an open watercourse, except for pedestrian and vehicular crossings, the location and design of which shall be subject to the approval of the Director of Planning."
In July 1995, Council approved the City's Greenways Plan which proposes a Central Valley Trail linking Burnaby Lake with False Creek.
On July 22, 1999 the I-3 High Technology Interim Rezoning Policies and Guidelines were adopted by Council which state in part "(d) Where the Still Creek alignment passes a site, public access to the Still Creek pathway for public enjoyment and use should be provided." and "(e) Still Creek should be incorporated and emphasized in the streetscape design where possible."
Vancouver Film Studios ("VFS") is developing a major film studio campus north of Grandview Highway, east of Skeena Street on the east side of the City. They have significant security concerns and are desirous of gating Cornett Road at Skeena Street. Beyond the usual concerns of loss of public access and protection of public utilities this proposal is impacted by two significant public initiatives.
Still Creek passes through the site adjacent to Cornett Road (see Appendix B). Council policy seeks retention and enhancement of Still Creek as an open water course. At this time funding for the enhancement work does not exist.
The Burlington Northern and Santa Fe ("BNSF") railway line forms the northerly limit of the film studio campus. The new Skytrain line is being constructed along the northerly edge of the BNSF line. The City is pursuing a greenway/bikeway under or adjacent to the Skytrain guideway; staff are optimistic that a right-of-way can be secured. However, it may be that Cornett Road will be needed to connect the future greenway along the Vancouver/Burnaby boundary.
As the greenway construction is at least three (3) years away, the needs of the film studio for security are seen as paramount. Further, the revenue from the lease of Cornett Road is recommended to be used to create a source of funds to pay for Still Creek/Greenway enhancements.
The purpose of this report is to seek Council authority to close, stop-up and lease to VFS a portion of Cornett Road, east of Skeena Street, so as to allow for the "film campus" to be secured, and to establish a source of funds to support Still Creek/Greenway enhancement work.
We have received a request from VFS to lease the portion of Cornett Road east of Skeena Street as shown hatched on the plan attached as Appendix "A".
VFS advises that they control all the properties that abut the subject portion of Cornett Road. They are held in various different company names. As a condition of the lease arrangements, VFS will have to provide covenants to the satisfaction of the Director of Legal Services so as to meet the provisions of Sections 289A and 291A of the Vancouver Charter.
The subject portion of Cornett Road was dedicated by the deposit of Plan 9082 in December of 1954. In 1964, the Ministry of Transportation and Highways had a survey plan prepared and registered as Highway Plan 62 that defined the limits of the Trans Canada Highway abutting this site.
While there are complications that arise because of the different responsibilities for roads as between the Vancouver Charter and the Highway Act, it has been determined that the maximum area the City could lease is all that portion of Cornett Road that lies westerly of the limits defined on Highway Plan 62.
The proposal discussed herein includes a 64,910 square foot portion of Cornett Road being all that portion east of Cornett Road not impacted by Highway Plan 62.
Cornett Road contains underground sewer, water and gas lines, and overhead utilities including hydro and telephone service.
VFS has made application to the City to gate and control access to Cornett Road at Skeena Street. They desire exclusive use of Cornett Road for the film studios, noting that, for security purposes, they need to control all traffic to their site. VFS wishes to contain their operation in a "campus" like setting. VFS will soon encompass ten (10) studio buildings and supporting facilities in the area between Grandview Highway and the BNSF line and between Skeena Street and Boundary Road. Given planning initiatives around potential Greenway routes, the linkages to Skytrain stations, Still Creek enhancements and other work in the Grandview Boundary area, staff have considered the request very carefully.
Recently several break-ins and loss of computer equipment have made security a more urgent issue for VFS. These break-ins occurred despite a security system and security personnel on site. VFS has several major filming contracts scheduled to begin in August and are anxious to resolve the security issue. However, area-wide planning issues that could be affected by the decision about Cornett Road need to be considered.
Staff have examined the proposed closure and explored options for securing the VFS site that also meet the City's objectives of ensuring access to and protection of City services, and ensuring a route for the Central Valley Greenway and future public access to an enhanced Still Creek. Staff believe that the negotiated agreement as described below meets all the objectives and provides a funding source to contribute to Council's long-term goal of daylighting and enhancing Still Creek.
After review, it has been determined the most appropriate method to place Cornett Road in the control of VFS is through a lease.
The Director of Real Estate Services has negotiated a lease with terms and conditions generally as described in Recommendation A. Although Cornett Road will be gated at Skeena Street, the gate will be staffed 24 hours a day, 7 days a week. The City, public utility companies, the GVRD, and emergency response personnel will have access to the site at any time required.
No structures will be allowed other than the gate at Skeena Street. The use of the lease area will be for access, parking and loading purposes only, and incidental uses ancillary to the film studio operation.
The annual rental to be $78,962.00 inclusive of all real property taxes (for each of the first 3 years), plus GST and PST as applicable as per the recommendation of the Director of Real Estate Services. The rent will then be adjusted in accordance with the annual percentage change in the Consumer Price Index (all items).
We will retain a one (1) year cancellation clause should the area be required for municipal purposes. The cancellation clause will only be exercisable at Council's direction after the first two years. This will provide a three (3) year certain term. Any renewals after the initial five (5) year-term will include a one year cancellation clause.
Grandview Boundary Planning Initiative
There are a number of planning issues that were reviewed when considering this lease.
Central Valley Greenway The City has received funding for the section of the Central Valley Greenway from Commercial Drive to Boundary Road as part of the Grandview Cut (Skytrain) Access Agreement. However, the use of a portion of the preferred route under the guideway and along the BNSF right-of-way is still to be secured. An alternative route is along this portion of Cornett Road and needs to be protected. To maintain this option pending resolution of the preferred Skytrain/BNSF alignments, a one (1) year cancellation clause is part of the proposed Cornett Road lease agreement. If the route under the Skytrain guideway is not secured, then the City could serve notice of cancellation of the lease to be effective within three (3) years of the signing of the original lease agreement. This portionof Cornett could then be incorporated as part of the Greenway. Alternatively, the City and VFS could explore options to provide public access along Still Creek and continue to provide security through a fencing system.
Still Creek Enhancement and Pedestrian Route Still Creek parallels this portion of Cornett Road. Council has a long standing policy to daylight, enhance and create a continuous public pathway along Still Creek linking to Burnaby which was confirmed in 1988 and reconfirmed in the I-3 Policies and Guidelines for the area. Closure of Cornett Road would also close public access to Still Creek and would appear counter to this policy objective.
However, the daylighted and public portions of the creek are currently discontinuous and many culverted portions of the creek are under private parking and road access throughout the Grandview Boundary area. Achieving a continuous link will require access agreements and land purchase and will only be possible in the long-term.
Normally rentals from leases of City-owned streets and lanes are placed in general revenue. In this case however, given the high-tech future of the Grandview Boundary area and the amount of public amenities required, staff are recommending that the lease monies go into a Still Creek/Greenway Enhancement Reserve to be used for the achievement of Council's objectives for Still Creek and the Central Valley Greenway as per Recommendation C. If this were to occur, the temporary closure of Cornett Road could ultimately be a catalyst and provide a part of the funding for enhancement, daylighting and completion of a pedestrian link between False Creek and Burnaby Lake and the existing 29th Avenue Skytrain Station and the new Skytrain line. In addition, VFS has agreed to enhance Still Creek within their lands and provide a public viewing area at Skeena Street and Cornett Road.
Public Notification Staff have notified the 89 owners in the Grandview Boundary area and other private citizens who have expressed an interest in Still Creek during past planning initiatives or have otherwise been connected to creek stewardship initiatives in the City. These people have been advised that this report is before Council today.
The proposed lease will provide for the indemnification of the City and will require that the Lessee be responsible for the maintenance of the lease area. The future use of the lease area will be assured through the cancellation provisions in the lease, including preserving Cornett Road as a portion of the Central Valley Greenway if required. In addition the lease payments can be used to acquire key sections of Still Creek, daylighting or other greenway enhancement initiatives. It is therefore recommended that Council approve the lease subject to the conditions set out in this report.
NOTE FROM CLERK: Appendix A and B not available in electronic form - on file in the Office of the City Clerk.
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(c) 1998 City of Vancouver