ADMINISTRATIVE REPORT

Date: May 15, 2001
Author/Local: MG Thomson/7328

RTS No. 02066

CC File No. 5104

Council: June 5, 2001

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services, in consultation with the Director of Real Estate Services and the Director of Legal Services
SUBJECT:	Proposed Lease of Portions of Kent Avenue South, Dudley Street, Cromwell Street, Kinross Street and Hartley Street

RECOMMENDATION

A. THAT Council close, stop-up and lease to the abutting owners all those portions of:

(a) Dudley Street south of Kent Avenue South and Kent Avenue South from the westerly limit of Hartley Street to the westerly limit of Boundary Road;

(b) Hartley Street and Kinross Street lying between the northerly shore of the north arm of Fraser River and a line drawn parallel to and 66 feet perpendicularly distant southerly from the centre line of the right of way of the Vancouver and Lulu Island Railway; and

(c) Easterly 66 feet of that portion of Cromwell Street lying to the south of the Vancouver and Lulu Island Railway right-of-way;

the same as each shown in heavy outline on the plan attached hereto as Appendix "A" (the "Road Portions") (on file in City Clerk's Office) subject to the following conditions:

(1) The term of the lease to be five (5) years commencing February 1, 2001 subject to a one (1) year notice of cancellation;

(2) The rental to be $200,000.00 per annum inclusive of property taxes as if levied plus GST and PST if applicable from February 1, 2001 toJuly 31, 2003 and $225,000.00 per annum inclusive of property taxes as if levied plus GST and PST if applicable from August 1, 2003 to January 31, 2006;

(3) The uses to be limited to:

a. for Kent Avenue South railroad and vehicular access;
b. for Dudley Street parking, sawmilling and manufacturing;
c. for Hartley Street and Kinross Street sawmilling; and
d. for Cromwell Street, access, lumber storage, existing buildings, fixtures and improvements thereon as required by the tenant for conducting its business;

(4) There are to be no buildings or structures constructed on the lease area, although those presently in place can remain, subject to the terms of the lease;

(5) The lessee is to maintain the lease area, including responsibility for drainage, in a manner satisfactory to the City Engineer;

(6) 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;

(7) The City, public utility companies, and the G.V.R.D. are to have the right of entry, at any time, to the lease area for the purpose of installing, maintaining, and repairing public utilities;

(8) The lease to contain a provision restricting the stacking of heavy loads over the lease area;

(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; and

(10) 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 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.

COUNCIL POLICY

The authority for closing and disposing of streets and lanes is set out in the Vancouver Charter.

PURPOSE

The purpose of this report is to seek Council authority to close, stop-up and lease to the abutting owner (Weyerhaeuser Company Limited) the Road Portions.

BACKGROUND

Portions of the subject lands have been leased to the abutting sawmilling operations since at least 1931. There have been changes in ownership of the abutting lands, most recently in June of 2000 when Weyerhaeuser Company Limited purchased the fee simple lands from MacMillan Bloedel Limited.

The last lease to MacMillan Bloedel Limited has expired and Real Estate Services has been negotiating a new lease. Weyerhaeuser Company Limited continues to occupy the lease lands on a month to month basis.

As the Director of Real Estate Services does not have standing authority to approve a lease with a total revenue greater than $250,000 it is necessary to seek Council authority. Further the Director of Legal Services has been unable to determine that all formal Council authorities to close, stop-up and lease all the roads were in place.

DISCUSSION

The Road Portions are not presently required for municipal purposes. They have been occupied by the abutting sawmilling operations for at least 70 years.

The Director of Real Estate Services has negotiated a new lease, for 5 years subject to a 1year notice of cancellation with the rental of $200,000.00 per annum inclusive of property taxes as if levied plus GST and PST if applicable from February 1, 2001 to July 31, 2003 and $225,000.00 per annum including of property taxes as if levied plus GST and PST if applicable from August 1, 2003 to January 31, 2006.

The use of the lease areas will be restricted as follows:

a. for Kent Avenue South railroad and vehicular access;
b. for Dudley Street parking, sawmilling and manufacturing;
c. for Hartley Street and Kinross Street sawmilling; and
d. for Cromwell Street, access, lumber storage, existing buildings, fixtures and improvements thereon as required by the tenant for conducting its business.

The lease areas will be restricted as to new structures and it will be the responsibility of the abutting owner to maintain the lease areas to the satisfaction of the City Engineer. The lease areas will remain available for the installation, maintenance and replacement of required public utilities.

The final lease agreement will be drawn to the satisfaction of the Director of Legal Services, Director of Real Estate Services and the City Engineer.

CONCLUSION

As the subject portions of City street proposed to be closed, stopped-up and leased are not presently required for municipal purposes the General Manager of Engineering Services recommends the approval of Recommendations "A", "B" and "C".

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(c) 1998 City of Vancouver