Memorandum of Understanding Appendix B
between
the British Columbia Housing Management Commission (BC Housing), and
the City of Vancouver (the City) regarding
the renovation and rehabilitation of the Central Residence and
dated for reference Feb. 16, 2000.

The Central Residence

The Central Residence occupies 50 ft. by 120 ft. (6,000 sq. ft.) site consisting of Lots 9 and 10, Block 8, DL 196, Plan 184. It is located at 42 E. Cordova St. It is a 6 storey plus basement building that was built in 1893. It consists of 131 housekeeping rooms, 9 shower rooms, 6 communal bathrooms, 12 shared toilets (including those in the bathrooms and large shower rooms), and 1 1-bedroom unit for a total of 132 units on floors 2-6, and 2480 sq. ft. common area (lobby, laundry, common kitchen, office) and 2,300 sq. ft. of ground floor retail space leased to the Downtown Eastside Women's Centre. It is listed on Vancouver's Heritage Inventory as a `B' building.

Current Non-Market Status

The Central Residence was purchased by CMHC in 1974 for non-market housing. It was funded under section 15(1) of the NHA. The first operator of the Central Residence was United Housing Foundation, a private, non-profit organization. In 1976 Council approved that ownership and operation be transferred to the City of Vancouver in the name of the City of Vancouver Public Housing Corporation (VPHC). The VPHC assumed the remaining 33years of a 35 year mortgage in the amount of $957,523.00. The mortgage has an outstanding balance of $637,492 as at December 31, 1999 and will be paid off in 2010. Mortgage payments are $89,477.40 annually.

The City's Non-Market Operations manages the building on behalf of the City. The project is operated on a breakeven basis by the City with the Province of BC through BC Housing paying 50% of any operating deficit and the Federal Government through CMHC paying 50% of any operating deficit. The total operating budget for the Central Residence in 1999/200 was $580,000 (excluding M&I) with rental revenues of $317,700 and BC Housing and CMHC each contributing $131,550 in operating subsidies.

The rooms are rented at between $173.00 to 325.00 per month. The rent from the ground floor retail is $11,300 annually, and subsidizes the housing operations. The City provides 24 hour staffing (4.2 FTE) plus janitorial and maintenance services.

Segal Place

BC Housing and the City are developing Segal Place, 98 units of non-market units at 55 E. Hastings, across the lane from the Central Residence. These will be 300-340 sq. ft. self-contained units. This project should be completed in the Fall of 2001. Segal Place will be operated by the City's Non-Market Operations.

Segal Place and the Central Residence will be operated jointly, e.g. the midnight shift will serve both buildings.

Segal Place will provide the City's Non-Market Operations Division with its second building of self-contained units for seniors and/or singles. It is the intent of the Non-Market Operations Division to allow its current residents living in the 800 units in its portfolio and who would benefit from a self-contained unit to move into Segal Place.

Renovation of Central Residence

The Central Residence is in need of substantial renovation. The housekeeping rooms are very small, and all upgrading to rooms and common areas have been done on an incremental basis. The mechanical systems are old and presenting problems increasingly. The long term viability of the existing mechanical, plumbing, heating and ventilation systems of the building should be assessed. The ancient steam boiler requires specially certified staff to operate and the advantages of replacement should be considered. Plumbing leaks are becoming more frequent and should be investigated. The ground floor and basement are in good condition but could be improved and more effectively used.

The development of Segal Place provides an opportunity for more extensive renovations to be undertaken to the Central Residence with minimal disruption to the residents. Residents will be relocated to vacancies within the Non-Market Operations portfolio that are created by tenants moving to other buildings or into Segal Place.

Renovation Proposal

It is proposed to explore 3 renovation alternatives:

1. One would combine 3 existing housekeeping rooms into 1 self-contained unit, and where this is impractical, 2 existing units into 1 larger housekeeping room. This alternative would result in approximately 40 units (30 self contained units and 10 sleeping units).

2. The second renovation alternative would combine 2 existing housekeeping rooms into 1 larger housekeeping room. This would result in approximately 65 new housekeeping rooms. An additional communal 4 piece bathroom would be added to each floor and ventilation and air circulation would be improved by opening the corridor through to a window at the south end.

3. The third renovation alternative would be a mix of the first and second alternatives, yielding 4 self-contained units per floor (20) by taking advantage of existing plumbing locations with the balance being made into larger housekeeping units. This would result in approximately 55 units.

In all the alternatives, all the new housekeeping rooms would be enlarged and would include a sink, stove and fridge.

The intent is to undertake the renovations one or two floors at a time to reduce the number of residents that would have to be relocated while keeping the renovations cost effective. Consideration should be paid to the level at which seismic upgrading may be required.

Funding

Funding for the renovations will be provided by BC Housing, through its annual Maintenance and Improvement budget.

Housing Agreement

In return for BC Housing providing the funding for the renovations, the City agrees to permit a Housing Agreement to be placed on title in the name of the Province that will ensure that the City retains ownership of the Central Residence and operates it with rents equal to the shelter component of welfare for singles, or, if that is not feasible, operates it on a non-profit basis, for 20 years from the termination of the existing mortgage. The City agrees that any surplus income from the operation will be invested in the same building.

Process

The first step in the process will be to evaluate the feasibility of the renovation alternatives and the existing mechanical systems. The City will seek consultants to evaluate the building, to prepare plans showing how the alternatives could be implemented, and to estimate the costs of each alternative. The City and BC Housing will jointly seek, retain and pay (on a 50/50 basis) for a consultant to undertake this work.

Following completion of the consultants' work, the City and BC Housing will review the alternatives on the basis of the cost of the renovations, the impact on the operating budgets, the livability of the units, the relative need for housekeeping units compared to small self contained units and the long term viability of the building systems.

Once a preferred renovation option has been selected, BC Housing will retain consultants to prepare working drawings, and will tender the project. BC Housing will manage the renovations in consultation with the City's Non-Market Operations who will continue to manage the Central Residence during the renovation.

Schedule

Approval of MoU by Council/BC Housing May 2000
Select consultants June 2000
Completion of consultant's feasibility study July 2000
Selection of renovation alternative Sept. 2000
Tender renovation contract Nov. 2000
Start renovations (first phase) Jan. 2001
Complete renovations (all phases) Spring 2005

Once this Memorandum of Understanding has been signed, it will be presented to Vancouver
City Council and to BC Housing's Board of Directors for approval. No legal rights or obligations shall be created or arise until all legal documentation pertaining to the renovations or Housing Agreement, and any related matters, has been fully executed on terms and conditions satisfactory to the City's and to BC Housing's solicitors.

Signed copy of MoU is on file with the City Clerk

____________________________ _________________________
Shayne Ramsay Shirley Chan
A/Chief Executive Officer Director, Non-Market Operations
for BC Housing . for the City of Vancouver

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Date Date

(c) 1998 City of Vancouver