Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Standing Committee of Council on Planning and Environment

FROM:

Director of Housing Centre, in conjunction with the Directors of Current Planning and Real Estate

SUBJECT:

Lease Terms and Floor Space Relaxation for the MCC Housing/Wings Social Housing Project at 1321 Richards Street (DE406078)

 

RECOMMENDATIONS

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

On December 2, 1997 Council approved the purchase of 1321 Richards Street for future non-market housing purposes.

On February 20, 2001, Council (In Camera) endorsed a partnership between the Province (BC Housing), the Vancouver/Richmond Health Board (V/RHB) and the City which will address homelessness and housing needs identified through the Vancouver Agreement process. Council (In Camera) approved as a part of that agreement a nominal 60 year lease to the MCC Housing for 1321 Richards Street (with Wings Housing Society to have access to 25% of the units for their clients), with $1,106,259 from the Downtown South Development Cost Levies to be paid to the PEF within 90 days of substantial completion of the project (75% of the 1997 purchase price); the necessary majority of Council votes was received for this Capital Grant expenditure.

Section 3(11) of the Downtown Official Development Plan, adopted November 4, 1975, provides for a relaxation of floor space ratio (FSR) for sites involving low cost housing.

PURPOSE AND SUMMARY

This report seeks Council's approval of:

1. the terms of the ground lease to MCC Housing for a non-market housing project;
2. a relaxation of density related to parking spaces; and
3. a soils remediation budget for the site.

BACKGROUND

Site: The City purchased 1321 Richards Street in 1997 for $1.475 million for future use for non-market housing. The site has a frontage of 22.9 m (75 ft.) along Richards, and a depth of 36.6 m (120 ft.), for an area of 836.3 m² (9,002 ft.²).

Figure 1: Site Location

Development Proposal: DE 406078 has been submitted to develop 87 units of housing for low income urban singles. MCC Housing has a client list of individuals with mental health issues, while WINGS serves individuals with HIV or AIDS. Parking for 10 cars is to be provided with access from the lane. The building height is 12 storeys and 34.4 m (112.7 ft.).

The majority of the units are between 29.73 and 31.59 m² (320 and 340 ft.²) in size. Of the remaining units, eight are handicapped accessible and situated on the 2nd and 3rd floors. A lounge, TV room and meeting spaces are located at grade, as well as on the 3rd floor, in conjunction with a roof-top patio at the rear of the 3rd floor.

Funding is through BC Housing Management Commission's (BC Housing) Low Income Urban Singles (LIUS) program.

Lease Approval: On February 20, 2001, Council (In Camera) endorsed a partnership between the Province (BC Housing), the Vancouver/Richmond Health Board (V/RHB) and the City to address homelessness and housing needs identified through the Vancouver Agreement process. The site at 1321 Richards Street is included as a component of that partnership. The Property Endowment Fund (PEF) was to be reimbursed for the foregone prepaid ground rent of $1,106,259 through a transfer from the Downtown South Development Levy Reserve. Forty-five percent (45%) of development levies from Downtown South are designated for replacing low-income housing that may be lost through redevelopment in the area.

The City will lease the site for a 60-year term and a nominal prepaid lease rent, to MCC Housing, with WINGS Housing Society as a partner. City funding for the site will be provided through the Downtown South Development Cost Levies allocated to replacement housing when the project is complete. BC Housing will fund the capital costs of the project.

DISCUSSION

Proposed Lease Terms: For BC Housing-approved social housing projects, the City is committed to a standard form of lease. The only variations are the rent and any special terms which the City may require.

The proposed lease terms include:

1. a nominal rent;
2. term of 60 years from the commencement of the lease;
3. date of commencement will be the earlier of the date of signing the lease by all parties, or 180 days from the date of Council approval of the lease terms; and
4. such other terms and conditions as the City and BCHMC agree.

Lease Prior-to Condition: Prior to execution of the ground lease to MCC Housing, MCC Housing and Wings Housing Societies must provide a signed Memorandum of Understanding on the management of the project, including allocation of 22 units to Wings. These arrangements will include, but not be limited to, tenant selection procedures and criteria, as well as the kind of support services which will be available to maintain their clients who are resident in the project. These arrangements will be to the satisfaction of the Director of the Housing Centre and the Director of Legal Services, BC Housing and Vancouver/Richmond Health Board.

FSR Relaxation: Under the regulations of the Downtown District Official Development Plan (DDODP), floors or portions of floors used for parking which are located at or below the base surface are excluded in the calculation of FSR. The base surface is defined by a plane formed by joining the four corners of a site. For the majority of major residential projects parking is provided underground and above-grade parking is not an issue.

Parking located above grade is counted as floor space ratio (FSR) at a rate of 70% (one actual square foot of parking area is counted as 0.70 FSR). Due to a slope of the site at 1321 Richards Street from the lane to the street, the "at-grade parking" for 10 spaces is counted as floor space. This would mean a loss of seven units.

Section 3(11) of the Official Development Plan allows the Development Permit Board in the case of "low cost housing" to increase the FSR, subject to prior approval of Council, and the following considerations:

"The Development Permit Board may, for any development which includes low cost housing, except within the areas denoted by the letters `K1', `K2' and `K3' on Map 1, permit an increase in floor space ratio, subject to prior approval by City Council and the securing of a Housing Agreement to ensure the inclusion of the low cost housing.

(d) the impact upon livability and environmental quality of the neighbourhood; and

In the opinion of Planning and Housing Centre staff, the site condition is unusual and the structure of the current regulations provides no ability to respond, other than as a relaxation of FSR with support of Council. Real Estate Services notes that the value of the benefit, in the form of housing which benefits those on low income, is more than double the increased land value. Therefore the increased FSR relaxation is justifiable.

As the lost FSR means a direct loss of housing units for low income singles, staff support a relaxation to the extent that the floor area used for parking can be off-set with floor space for housing. This amounts to 200 m² (2,150 ft.²). On October 29, 2001, the Development Permit Board recommended that the Director of Planning approve Development Permit No. 406078 (for 1321 Richards Street), subject to Council's prior approval of the additional 0.22 FSR, as outlined herein. Recommendation B seeks Council's approval of this relaxation.

Downtown South SRO Replacement: Between 80 and 150 single room occupancy (SROs) units are lost through redevelopment each year in the Downtown South. A replacement strategy has been in place for a number of years, utilizing Development Cost Levy funds and Provincial funding. Generally, replacement has kept pace with losses. Presently, there is a net loss of 43 units. The following table outlines the gains and losses expected in the next two years.

Activity

Net Gain or Loss (plus or minus)
of SROs

Present Status

- 43

Granville St. project (+ 63 units)

20

1321 Richards (+ 87 units)

107

Expected Losses in next two years

- 160 to - 300

Net Loss Total in next two years

- 53 to - 193

The Director of the Housing Centre notes that the City's ability to replace SROs at the same rate as their loss will likely be influenced by the Provincial Government's core review of all funding, including affordable housing.

Soils Remediation Budget: Before purchase, a Stage 1 Preliminary Site Investigation (PSI) indicated a low likelihood of contamination, however, the investigation did recommend an assessment of fill, soil and groundwater at the development stage. A Stage 2 PSI investigation commissioned by BC Housing shows elevated levels of lead and zinc in soil samples taken from the parking lot portion of the property. The level of metal contamination exceeds residential level standards. The soils consultant recommends treating the whole surficial fill layer at the site as contaminated and removing the suspect material to a licensed remediation/disposal facility. Based on the area impacted and using an average depth of about 1.0 m (3.3 ft.), the estimated quantity of suspected soil is approximately 600 m3 (21,189 ft.3 ).

The estimated cost of this remediation is $70,000 above original costs for excavation and related work. The partnership agreement between the City and the Province sets out the business arrangement concerning soils remediation costs for the project, to share any additional amount on a 50/50 basis. If the projected cost exceeds $100,000, either party may abandon the project. Staff recommend that the City commit to a contribution of $35,000 with a $15,000 contingency from the PEF if other sub-surface problems are identified. The amount of $50,000 would be consistent with the commitment outlined in the City/Province agreement.

CONCLUSION

The site at 1321 Richards was acquired by the City in 1997 for non-market housing.

The forgone prepaid ground rent of $1,106,259 is being paid to the Property Endowment Fund out of Downtown South Development Levies, 45% of which are allocated to replacing low-income housing lost in the area. Funds will be transferred 30 days from issuance of the occupancy permit for the project by the City.

The Director of the Housing Centre recommends that Council support:

1. the lease to MCC under the terms outlined in the report;
2. the requested relaxation of FSR equivalent to the parking area at the rear of the building; and
3. a budget up to a maximum of $50,000 for soil remediation.

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pe020207.htm

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