ADMINISTRATIVE REPORT
SOCIAL DEVELOPMENT

TO:

Standing Committee on City Services and Budgets

FROM:

Director of Current Planning, in consultation with the Director of Legal Services and the Manager of Real Estate Services.

SUBJECT:

Downtown Eastside Economic Revitalization: Lease Subsidy for Call `N Post

 

RECOMMENDATION

GENERAL MANAGER OF COMMUNITY SERVICES' COMMENTS

COUNCIL POLICY

On March 16, 2000, Council approved the Downtown Eastside Lease Subsidy Program and the Tenant-Improvements Assistance Program (the "Pilot Programs"). Pursuant to the terms of a services contract between the City and the Vancouver Economic Development Commission (VEDC) dated January 1, 2000, the Pilot Programs were and have been managed by the VEDC in consultation with Real Estate Services, the Planning Department and representatives from the community. The term of the most recent services contract expired on December 31, 2000, and Council on April 12, 2001 approved City staff negotiating and entering into a new services contract for the 2001 fiscal year.

On March 16, 2000, Council allocated $150,000 from the 2000-2002 Capital Plan for the Tenant-Improvements Assistance Program.

On March 16, 2000, Council allocated $150,000 from the 2000-2002 Capital Plan for the Lease Subsidy Program.

On May 16, 2000, Council approved a Lease Subsidy of up to $72,000 to Common Concerns for operation of the Clothes Encounters Laundry.

PURPOSE AND SUMMARY

This report seeks Council's approval to direct the Director of Legal Services to enter into a new services contract between the City and the VEDC. The contract will authorize the VEDC to manage for the remainder of the 2001 fiscal year the two previously approved Pilot Programs designed to encourage the economic revitalization of the Downtown Eastside. The services contract would include, amongst other things, the management and administration of the Lease Subsidy Program.

Subject to the City and the VEDC entering into a new services contract, this report also seeks Council's conditional approval of a grant payable by way of a lease-subsidy to the Downtown Eastside Residents Association (DERA), a registered charity, for the operation of Call `N Post. The Call `N Post is a social enterprise offering voicemail, mailboxes, printing and fax services for people living and working in the Downtown Eastside. The voicemail service has been operating for three years out of DERA's office and has more than 2000 subscribers.

In keeping with the conditions Council adopted for the Lease Subsidy Program, the Call `N Post proposal has been reviewed by staff and a community-based Business Assistance Review Committee. They are recommending Council approve a lease subsidy of up to a total of $72,000 over three years to assist this new storefront business at 16 West Hastings Street. The business plan indicates that this subsidy, together with a $20,000 start-up grant from Telus, will enable Call `N Post to become self-sufficient within three years when the lease subsidy ends.

BACKGROUND

In November 1998 Council approved "A Program of Strategic Actions for the Downtown Eastside." One objective of the program is to bring legitimate businesses back to thestorefronts of Hastings Street between Gore and Cambie. As part of this work, on March 16, 2000, Council approved the Lease Subsidy and Tenants Assistance Pilot Programs to encourage locally-based businesses to commence operations in the area. $150,000 was allocated from the 2000 - 2002 Capital Plan for each of these programs. Council also approved that the VEDC, in consultation with staff and a community-based Business Assistance Review Committee, would administer these programs. This was included as part of the VEDC's 2000 services contract with the City. This contract may be renewed or a new contract entered into on an annual basis.

In the spring of 2000, the VEDC and the Four Corners Support Fund Society formed PEACH (Partners for Economic and Community Help). The purpose of PEACH is to offer in a single storefront location a comprehensive set of programs to help revitalize business in the Downtown Eastside. The VEDC is administering the Lease Subsidy Program through PEACH. Two Commissioners from the VEDC and two Directors from the Four Corners Support Fund Society form the Management Committee of PEACH.

On September 29, 2000, the three governments announced under the Vancouver Agreement that they would coordinate a number of economic revitalization initiatives through PEACH. In addition to the City's Lease-Subsidy Program, thus far these include the Provincial Community Development Fund and the Federal business development financing program.

PEACH has a 15 member Community Steering Committee made up of 10 community representatives, and one representative from each of the three levels of government, the VEDC and the Four Corners Support Fund Society. In keeping with the spirit of the Vancouver Agreement, this Steering Committee also serves as the VEDC's Business Assistance Review Committee. Appendix A provides a list of the PEACH's Steering Committee members and a short statement of the objectives of PEACH and its budget.

DISCUSSION

Renewal of Contract for Services with the VEDC
The VEDC is currently undergoing a transition where it will withdraw from the management of specific economic revitalization programs for the Downtown Eastside. This is reflected in the VEDC's 2001 budget and business plan approved by Council on April 12, 2001. Consistent with this direction, the intention, subject to Council Approval, is to fully devolve the management of the Lease Subsidy and Tenant Improvement Assistance Programs to PEACH on similar terms and conditions as required by the City with the VEDC. However, the VEDC must remain legally responsible for these programs until PEACH becomes a registered nonprofit society capable of entering directly into a contract for services with theCity and other governments. It is expected that this will take place over the next few months. Therefore, the proposed contract for service with the VEDC in Recommendation A of this report is a temporary measure in respect to only the management and administration of the Pilot Programs.

Description of the Call `N Post
Call 'N Post is a storefront social enterprise that will offer voicemail, mailbox, printing and fax services for people living and working in the Downtown Eastside. This business will meet a community need as many of the residents live in SRO's or on very low income and do not have telephones or secure places to get mail.

DERA has operated voicemail for three years and presently has 2000 voicemail clients. The voicemail service provides people with a point of contact for employment as well as a way to keep in touch with friends, family and social services. Expanding to a storefront to include secure post mailboxes as well as access to inexpensive fax and related services will enhance the quality of life and employability of many residents. It will also allow DERA to operate the service as a self-sustaining enterprise. The Call 'N Post will also initially employ two local residents.

The proposed location is the recently vacated storefront at 16 West Hastings Street. Because of the proximity to Main and Hastings, and the fact people may be receiving checks through the mail service, the PEACH Community Steering Committee feels it is important to have a security plan for the facility as well as on the street. This must include arrangements with police and administrative rules to help protect this business and its clients from the impacts of the illegal drug trade. These will be described and enforced as a condition of the Lease Subsidy through a Good Neighbour Agreement.

Telus has already contributed $20,000 to help get this business started. It is critical that DERA be able to show financial institutions and other potential sources of financing that Call `N Post will receive a grant from the City payable as a lease subsidy when all required conditions are met.

Lease Subsidy for Call `N Post
As indicated above, the VEDC has authorized PEACH's Community Steering Committee to serve as the Business Assistance Review Committee to advise on applications for lease subsidies. At its regular meeting on 31 January, 2001, the Committee reviewed DERA's Call 'N Post proposal and unanimously agreed it be brought forward for Council's consideration in accordance with the conditions of the Lease Subsidy Program.

If approved by Council, DERA will be provided with a letter of intent stating that subject to the VEDC and the City entering into a new services contract, DERA entering into a Good Neighbour Agreement with the City, and the Lease Subsidy Program start-up conditions being met, DERA will be eligible to receive reimbursement for a portion of its lease costs. The maximum grant DERA will qualify for is 75% of the monthly lease costs up to a maximum of $3,000/month in year one of operation, 50% of the monthly lease costs up to a maximum of $2,000/month in year two and 25% of the monthly lease costs up to a maximum of $1,000 in year three. This constitutes a maximum City commitment of $72,000 over a three-year period.

The actual reimbursement of a portion of Call `N Post monthly lease costs, up to the maximum percentage and amounts stipulated in the Lease Subsidy Program conditions, will occur only after it is ascertained by the VEDC that all conditions required for business startup have been met and subject to Call `N Post continuing to satisfy the conditions for receipt of a lease subsidy throughout the three year time period.

Therefore, prior to the release of any grant monies to DERA, it will be verified by the VEDC through the PEACH Secretariat that the proposed Call 'N Post meets the Lease Subsidy Program criteria in that it will:
· be a street-level, storefront operation on Hastings Street between Cambie and Gore;
· be operated by a local non-profit organization which is a registered charity;
· employ local people;
· serve a market not fully served by its nearest private sector competitors; and
· serve a need not presently being fully served by other market or non-profit enterprises, including that of local residential establishments.

The VEDC is satisfied that if the required funding can be secured, this enterprise should be self-sustaining within a three-year period from the commencement of operations. In addition to the conditions listed above, the following conditions must also be met prior to the City having any obligation to grant any money to DERA and prior to the release of grant monies:

1. that Real Estate Services has reviewed the lease agreement and finds it satisfactory;
2. that all required City inspections have been performed;
3. that all required permits have been issued;
4. that a business license has been issued;
5. that the required financing is in place;
6. that a contract satisfactory to the Director of Legal Services be in place with the VEDC for the delivery of the Lease Subsidy Program; and
7. that DERA has entered into a Good Neighbour Agreement with the City to the satisfaction of the Director of Legal Services, the Chief Constable and the General Manager of Community Services.

When all these conditions have been met, staff will inform Council of that fact and the exact amount of the grant that will be required from the City, not to exceed $72,000. The City will at that time make the grant to DERA for the operation of Call `N Post and deliver the funds, or a portion thereof, to the VEDC for distribution in accordance with the Lease Subsidy Program conditions and criteria.

FINANCIAL IMPLICATIONS

The exact cost to the City will depend on the lease costs of the facility secured by DERA for the operation of Call 'N Post. As noted earlier, the maximum City commitment is $72,000 over a three-year period.

The commitment of these funds will be subject to the new services contract for 2001being entered into between the City and the VEDC, and the verification by the VEDC that all permits are secured, start-up financing is in place, and DERA is in compliance with all the program conditions. Once these conditions are met, the lease subsidy for the months remaining until the end of the current calendar year will be transferred to the VEDC by the City for distribution to Call 'N Post, in accordance with the terms of the Lease Subsidy Program and the services contract. The VEDC will reimburse Call 'N Post on a monthly basis, subject to Call 'N Post providing evidence that its monthly lease payment has been made and that it continues to comply with the Program's operating conditions. Should Call 'N Post cease to operate during the period of the lease subsidy, any unused funds already transferred to the VEDC will be returned by the VEDC to the City.

CONCLUSION

Call 'N Post will provide legitimate economic activity in a formerly vacant storefront on Hastings Street and will provide employment for residents and improve livability in the community by providing needed services. If the VEDC's contract is amended and the grant is approved, it will help enable DERA to secure needed financing for the project. This is the second project of this pilot program. The progress of the Call 'N Post will be carefully monitored and reported to Council.

* * * * *

APPENDIX A
Page 1 of 2

APPENDIX A

Partners for Economic and Community Help
Community Steering Committee Contact List as at 31 January 2001

Jerry Adams
Urban Native Youth Association

Alan Buckshon
Buckshon's Pharmacy

Nathan Edelson
City of Vancouver

Barry Fergusson
Four Corners Support Fund Society

Sister Catherine Fujisawa
Sisters of Atonement

Sylvia Isaac

Ken Lyotier
United We Can

Celine Mauboules
Ministry of Community Development, Cooperatives and Volunteers

Marcia Nozick
Community Directions

Karen O'Shannacery
Lookout Emergency Aid Society

Richard Page
Ray-Cam Co-operative Centre

Mark Townsend
Portland Hotel Society

Laurie Vincent
Western Economic Diversification Canada

Grace Wong
VanCity Savings

APPENDIX A

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APPENDIX A

Partners for Economic and Community Help

The purpose of Partners for Economic and Community Help (PEACH) is to offer a comprehensive mix of government programs in a single storefront location in the Downtown Eastside. PEACH is an initiative in which the three levels of government are providing complementary resources under the auspices of the Vancouver Agreement. All initiatives will be used to better the socio-economic situation of the Downtown Eastside by furthering community capacity building, by enhancing entrepreneurship and business development, and by creating employment and employment training opportunities. The primary focus of all of these activities is the residents of the Downtown Eastside.

PEACH provides community development funds and services specifically tailored to the needs of the Downtown Eastside community and offers capital funds and services that may not otherwise be available to enterprises in that community.

PEACH is delivering four programs on behalf of the Vancouver Economic Development Commission and the Four Corners Support Fund Society:

· Community Development Fund
· Business Development Fund
· Lease-Subsidy, and
· Tenant Improvement Programs

PEACH will also provide
· business development services
· business counselling
· assistance with business planning
· help with development permits
· various other supports to enterprise development

Funding:

· The Province, through the Ministry of Community Development, Cooperatives & Volunteers, is providing $1M in Community Development program funds over a two-year period and $176,400 in operating funds over the two years.
· The federal government, through Western Economic Diversification Canada, is providing access of up to $1M in investment funds over a five year period and $134,400 in operating funds in each of those five years
· Included in the VEDC's 2001 Business Plan will be a request that the City provide an aggregate of $30,000 in operating funds for the delivery of the Lease Subsidy Program and the Tenants-Improvements Assistance Program and as a contribution to PEACH core operating costs.