ADMINISTRATIVE REPORT

TO:

Standing Committee on Community Services & Budgets

FROM:

Director of the Housing Centre

SUBJECT:

Transfer of Lease - From VanCity Place Society to Covenant House Vancouver

 

RECOMMENDATION

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

Council policy is to lease sites to sponsors of non-market housing for 60 years with a prepaid rent equal to 75% of freehold market value.

PURPOSE

This report seeks Council approval to assign the lease for VanCity Place to Covenant House Vancouver, and/or to enter into a new lease with Covenant House Vancouver for the remainder of the 60 year term at nominal rent.

BACKGROUND

On February 8, 1996, Council approved in principle a partnership with VanCity to develop housing for younger low-income singles plus a ground floor social service facility in the Victory Sq. area. The partnership between the City and VanCity was part of a larger partnership with the Province whereby the Province would fund 200 units of non-market housing in the Woodwards redevelopment, and the City and VanCity would fund 50 or so units of housing for low-income singles not currently eligible for non-market housing in the area because of age restrictions.

On September 6, 1996, Council approved the purchase of 326 W. Pender and its subsequent lease to the VanCity Place Society for the development of 50 units of housing for low-income singles under that age of 45 plus the ground floor facility for youth services. Council agreed to provide grants totalling $2,024,500 towards the total project cost of $4,600,000. VanCity and others were to contribute $1,885,000 with the remaining costs to be provided through a mortgage. The capital grants and contributions were intended to reduce the cost of the project so that it could operate without on-going subsidies and on a breakeven basis. The ground floor was to be leased to youth services at nominal rents. The project opened in 1998. VanCity retained St. James Community Service Society to operate the project. The location of VanCity Place is noted on Figure 1.

Figure 1

VanCity's funding was raised from members and staff whose priority was to serve youth between the ages of 18 and 24 who were either living on the street or close to living on the street. VanCity and St. James have focussed on serving this group, but have encountered serious funding shortfalls. The needs of homeless youth or youth near homelessness are great. Projects that serve this need require substantial funding to provide 24 hour 7 days a week staffing as well as support services. Since the project opened, VanCity has incurred a deficit of $400,000 per year, which neither it nor St. James are able to sustain. The financial difficulties encountered by VanCity meant that the ground floor youth service space remains undeveloped.

Through 2000 VanCity Place Society undertook a thorough review of the project and its role. It concluded that the vision of serving youth 18-24 at risk of or actually homeless continued to be their priority. They also concluded that it would only be possible to do this if the project were assigned to a sponsor or operator who could provide the necessary funding for and expertise in youth housing. VanCity had seen the project built, and St. James had got it established, but neither were able to sustain the operation and ensure that youth at risk could be accommodated and provided with the support necessary to participate fully in society.

COVENANT HOUSE PROPOSAL

In November 2000, VanCity Place Society initiated a request for proposals from sponsors or operators with the necessary experience and funding capability. Two societies submitted proposals: Covenant House Vancouver and the Portland Hotel Society.

The Portland Hotel Society proposed to operate VanCity Place for longer term housing for youth. They have extensive experience providing housing to those who need extensive support but not experience with youth housing directly. The Portland proposal required funding from government programs. A review with possible funders indicated that the necessary funding was not available now, and could not be considered for the project until after the next provincial budget is approved.

Covenant House Vancouver proposes to use VanCity Place to provide a Rights of Passage program based on similar programs used at Covenant House operations elsewhere in North America, in particular the program used in Los Angeles (a copy of which is on file with the City Clerk). Covenant House Vancouver currently operates a shelter with out reach services at Drake and Seymour. They are unable currently to provide transition housing to the youth who use their shelter. VanCity Place would provide this transition housing for youth aged 16 - 24.

The Rights of Passage program requires that youth contract with Covenant House to participate in employment, training or other programs. It prohibits the use of alcohol or drugs on the premises. The expected stay would be 6 months to 2 years. Covenant House may use the ground floor of VanCity Place for services that have outgrown its Drake and Seymour location. Space freed up at Drake and Seymour may be used to provide additional shelter beds, in particular for young women. A summary of Covenant House Vancouver's proposal for VanCity Place is attached as Appendix A.

Covenant House Vancouver does not rely on government funding. Their funding comes from donors (32,000 currently in BC), and from its Toronto and New York headquarters. New York approved a grant of $1,000,000 (Canadian) to Covenant House Vancouver to develop a Rights of Passage program.

VanCity Place Society are asking that the City allow them to assign the lease of VanCity Place at 326 W. Pender to Covenant House Vancouver. VanCity believes that Covenant House has the necessary commitment and capacity to provide a valuable service to homeless youth and youth at risk of homelessness. Covenant House's programs cannot serve all theyouth in need, and longer term housing for youth needs to be available. The linking of an existing shelter operation to transition housing is an important step to the creation of the continuum of housing needed for youth in Vancouver.

The primary concern that VanCity had with the Covenant House proposal was the security of the current tenants. Covenant House has confirmed that it is not going to evict tenants, except for cause, and expects the transition from the current operation to the Rights of Passage will take a year or two. Covenant House will assist current tenants who do not want to participate in Rights of Passage in finding other accommodation.

Under the terms of the lease the City's approval of an assignment is required, and the City can arbitrarily withhold its approval. Based on the program review and proposal call process undertaken by VanCity, in which the Housing Centre participated, it is recommended that the assignment of the lease from VanCity to Covenant House be approved. If approved by Council, Covenant House Vancouver will take over operation of VanCity Place on March 31, 2001. Covenant House does expect that their Rights of Passage program will require renovations, as will the currently unfinished ground floor for their out reach youth services. Approval of the renovations and ground floor uses will require Development Permits.

Covenant House Vancouver may wish a fresh lease, as it would avoid the problem of Covenant House Vancouver being classed as a successor employer to VanCity Place Society.
It is recommended that Council approve both an assignment of the lease and/or a fresh lease for the balance of the 60year term at nominal rent. Both the assignment and/or fresh lease would be written to accommodate the Rights of Passage program and to ensure that the building serves younger low-income singles for the balance of the 60 year term.

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APPENDIX A ON FILE IN CITY CLERK'S OFFICE