ADMINISTRATIVE REPORT

Date: November 20, 2001
Author/Local:/A. Kloppenborg/6031

RTS No. 2364

CC File No. 5104

Council: December 4, 2001

TO:	Vancouver City Council
FROM:	Director of Social Planning, in consultation with Director of Legal Services
SUBJECT:	Joint Facility: Eastside Family Place/Britannia: Report #2 Lease Terms

RECOMMENDATION

A. THAT Council approve a licence to the Societies jointly under which they can enter the land and build the building;

B. THAT Council approve a ten-year lease of the Williams Street site of the new Eastside Family Place/Britannia building to Eastside Family Place Society and the Britannia Community Services Centre Society jointly to operate the new centre constructed by them upon the terms of this report;

C. THAT no rights or obligations hereby arise or take effect under the licence or the lease until each is signed by all parties;

D. THAT Council authorize the allocation of $15,000 to the City-owned Childcare Facilities Maintenance budget for maintenance services, without offset and subject to Recommendation F, commencing 2003 upon expiry of the building warranty;

E. THAT Council advise the Director of Planning that it would favour approval of a Minor Amendment under Development Application Number DE405367, to amend the existing form of development on the CD-1 zoned site known as Britannia Community Centre-1001-1110 Cotton Drive (1655 William Street being the application address) by allowing minor landscaping changes to the south portion of the Community Centre site to facilitate new playground space for Eastside Family Place.

CITY MANAGER'S COMMENTS

The City Manager notes that the City provides maintenance to many childcare facilities. A full review of maintenance costs for City-owned social service, cultural and childcare facilities occupied by independent non-profit societies is being undertaken and will be reported to Council before next year's budget is finalized.

Therefore, the City Manager RECOMMENDS approval of A, B, C, D, E.

COUNCIL POLICY

On July 13, 2000, Council approved the following:

"THAT Council approve a grant of $250,000 to Eastside Family Place to contribute toward the construction of a new facility for Eastside Family Place; source of funds is the 2000 Capital Budget for City-owned Social Service Facilities;

THAT Council approve a grant of $260,000 to Britannia Community Services Centre to allow the Association to participate in a joint Eastside Family Place/Britannia development; source of funds to be Revenue Surplus to be repaid as a first call on the 2001 Supplementary Capital Budget."

On October 3, 2000 Council approved the following:

"THAT Council approve taking a registered easement from the Vancouver School Board by which a significant portion of the new joint facility for Eastside Family Place and Britannia Community Services Centre may be located on School Board property upon the terms outlined in this report;

THAT Council waive the requirement for the land owners (City and School Board) to indemnify the City and the Chief Building Officer for agreeing to permit this construction crossing a property line as specified in Article 2.1.7.3. 1) ii) of the Vancouver Building By-Law;

THAT all agreements contemplated by this report be drawn to the satisfaction of the Director of Legal Services and on the understanding that no legal rights shall arise or be created hereunder until the agreements have been executed by her on behalf of the City;

THAT the portion of William Street west of the lane west of Commercial Drive, shown hatched on the attached sketch marked Appendix A be closed, stopped-up and title raised thereto subject to the following conditions:
i) The sewer presently crossing the site is to be relocated to the satisfaction of the General Manger of Engineering Services, the source of funding to be the capital grant approved by Council to Britannia Community Services Centre on July 13, 2000.
ii The area of closed road to be used for the construction of a building which will be leased to Eastside Family Place Society and Britannia Community Services Centre.

SUMMARY & PURPOSE

This report recommends approval of a licence to construct, and approval of lease terms for a joint lease of the proposed new building to Eastside Family Place Society and Britannia Community Services Centre. It also updates Council on other steps currently underway in the development process.

BACKGROUND

Eastside Family Place has been in operation in Grandview Woodlands for 20 years. They have operated out of a portable building on the Britannia site for 14 years. The existing building has reached the end of its useful existence. Eastside Family Place and Britannia have developed the proposal for the new building, the top floor of which will be used by the Britannia and the lower floor by the Family Place.

The Societies initiated the project with a total project budget of $ 860,000 ($510,000 from the City, $100,000 from the Provincial Millennium fund and $250,000 from their own fundraising). The Societies retained an architect and developed the building plans. In May, 2000, after obtaining a quantity survey to confirm costs, the Societies, with assistance from Facilities Development, tendered the project. Unfortunately the bids came in substantially over the estimates. As a result, the project has undergone a redesign. Britannia has committed an additional $150,000 to the project which, after subtracting pre-development costs, gives a total project budget of $985,000. This includes $60,000 specifically designated for the sewer relocation.

The redesigned building is 4800 sq. ft ( about 1300 sq. ft smaller than the original plan). It provides 2,777 sq. ft. for Eastside Family Place on the ground floor, and a multi-purpose room of 2,029 sq. ft. for Britannia on the second floor. The building is now completely on City land, except for the exit stairway from the second floor. As such, a development permit will not be required for the new building (although a Building Permit will still be required). Staff are prepared to support a Minor Amendment under Development Permit Application DE405367 to amend the CD-1 form of development in terms of minor landscaping changes to facilitate the new playground area adjacent to Eastside Family Place (Site Map, Appendix A).

City staff have assisted with this project in several ways:

· The negotiation and drafting of a right-of-way agreement between the City and the Vancouver School Board. The right-of-way agreement has now received approval

by the Ministry of Education and is registered in the Land Titles office.

· The drafting of a Licence to Construct, to permit the Societies to enter the site and construct the building. The licence is needed because it allows construction

to start while the lease is being negotiated.

· Review of the plans and proposed schedule by Facility Development staff, and set-up of a disbursement process to release City funds. The redesign process over the summer and early fall has required considerable staff time.

· Discussion of maintenance and repair costs including clarification of Landlord and Tenant responsibilities.

DISCUSSION

The Licence to Construct has been drafted by Legal Services, reviewed by all parties, and is ready to sign.

The terms of the proposed lease between the City (the Landlord) and Eastside Family Place Society and Britannia Community Services Centre (the Tenants) are as follows:

1. The lease will be a joint lease to both Tenants.
2. Nominal rent of $1/year.
3. Lease term to be 10 years, with an option to renew for a further 10 years, counting from the start of the 20-year statutory right of way from the School Board.
4. Use of building:

Eastside Family Place Society will provide services on the lower floor of the premises
a) services and supports for parents/caregivers and their preschool aged children including such programs as drop-in programs, respite childminding, parenting programs, support groups and similar services; and
b) a broad range of other supports, programs, projects and services to the community, compatible with Eastside Family Place's mandate.

Britannia will provide programs and services on the upper floor of the premises
a) a variety of recreational and social programs for children and families; and
b) recreational and social programs for people of all ages; meetings; workshops, and other uses compatible with Britannia's mandate.

5. Utilities shall be the responsibility of the Tenants.
6. The Tenants shall maintain the Premises in a sanitary, neat, tidy and safe condition to the satisfaction of the Landlord.
7. Repairs:

a) the Landlord shall be responsible for major maintenance and repairs, consistent with other buildings covered by the City's childcare maintenance program.

b) the Tenants shall be responsible for daily operating costs, minor maintenance and repairs

c) Any disagreement as to whether any want of maintenance or reparations is major or minor shall be finally determined by the Landlord's property advisors.
8. Liability and Insurance:

a) The Tenants are jointly and severally liable as occupiers of the building and are jointly and severally liable to the Landlord for damage to the building.
b) The Tenants shall jointly carry comprehensive general liability insurance with minimum limits of $5,000,000 per occurrence; and legal liability insurance for the full replacement cost of the Premises.
c) Subject only to subclauses a) and b) the Tenants are each liable to the Landlord for only one-half of the cost of performing, observing and satisfying the obligations herein on the Tenants to perform, observe and satisfy.
d) The Landlord shall insure the Premises for fire and related perils and the Tenants shall reimburse the Landlord if so requested.
e) The Tenants shall individually carry property insurance and operational liability insurance.

9. Assignment

The Tenants shall not assign their leasehold interest in the Premises.

10. Subleasing

The Tenants shall not sublease the Premises or any part thereof. Notwithstanding the foregoing, the Tenants may permit third parties to use portions of the Premises from time to time and to levy charges for such use, but only on the conditions that:
i) such practise is described to and approved by all insurers;
ii) each period of use does not exceed seven (7) consecutive days; and
iii) such use is not commercial in nature.

11. Should one Tenant cease to occupy the Premises, the Landlord reserves the right to select the replacement Tenant.
12. The Tenants may exercise the City's rights to place and operate part of the new building on School Board property.

13. Such other terms and conditions as the Director of Social Planning and the Director of Legal Services feel appropriate and the lease shall be prepared to the satisfaction of such Directors.

SOCIAL IMPLICATIONS

This project will strengthen services to children and families in Grandview-Woodlands.

FINANCIAL IMPLICATIONS

City Staff are proposing that maintenance of this facility be included in the City-owned Childcare Facilities Maintenance program whereby the City will be responsible for major structural repairs, and maintenance of the building envelope and key plant systems, such as heating and ventilation. Building Management has estimated that the cost for such maintenance services will be approximately $15,000; said services and costs will be the subject of a report back as set out in Recommendation F of this report.

The tenants will be responsible for janitorial, minor maintenance, and utility costs. It is possible that Britannia may, at some time in the future, request additional funding in their Operating Budget to cover these costs.

Given that the building is expected to be completed in April 2002 and the contractor will be responsible for deficiencies under a warranty program covering a 12-month period, it is anticipated that maintenance costs in 2002 will be minimal, hence it is recommended that funding for maintenance commence in 2003.

Staff note that this project is currently approaching re-tendering, with construction scheduled to start in early January. Facilities Development staff are working with the Societies on the tendering and project costs should be clarified by mid-late December.

Because of the delay in the project, the construction process will not be finished by the fiscal year end March 31^st, 2002, which is the deadline for final disbursements from the Provincial Millenium grant. The Millenium grants are normally disbursed in thirds, at the beginning of construction, the middle, and upon issuance of the occupancy permit. As soon as construction has commenced, staff will discuss with the Province what measures can be taken to ensure the project's receipt of the final third ($33,000) of the $100,000 grant.

CONCLUSION

Eastside Family Place and Britannia Community Services have worked together on the planning and development of this project. Subject to the selection of a contractor andapproval of final project costs, construction will occur over the winter and spring and the new facility will be open in late Spring of 2002.

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(c) 1998 City of Vancouver