Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Standing Committee on City Services and Budgets

FROM:

Directors of Real Estate, Facility Design & Management, and the Office of Cultural Affairs in consultation with the Director of Legal Services

SUBJECT:

The Vancouver Police Historical Society - Lease of City-owned Premises at 238 - 240 East Cordova Street

 

RECOMMENDATION

GENERAL MANAGERS' COMMENTS

POLICY

In May, 1993 Council directed that City-owned properties occupied by non-profit organizations be held as assets in the Capital Fund, and be charged a nominal rental rate.

Grants require eight affirmative votes of Council.

PURPOSE

This report seeks Council approval to regularize the occupancy of the Vancouver Police Historical Society ("VPHS") in the City-owned building at 238 - 240 East Cordova Street. Staff recommend a five-year lease of the currently approved space on the third floor of the building and authorization for staff to seek proposals for the use of the balance of the building. The report also reviews a request from the VPHS for expanded occupancy to the whole building and capital assistance for resultant upgrades.

BACKGROUND

The Vancouver Police Historical Society was formed in 1983 to collect, preserve and present to the public a history of policing in Vancouver. At that time, Council granted occupancy of the top floor of a City-owned Heritage building at 238-240 East Cordova, formerly the Coroner's Court and City Analysts Laboratory, to the VPHS, although there is no formal lease agreement.

The Museum is a non-profit society governed by a volunteer Board of Directors. An overview of the Society's activities is attached to this report as Appendix "A". The Museum is generally open to the public 9am-3pm Mondays through Fridays and on Saturdays May through August, and enjoys an annual attendance of approximately 5,000 visitors, primarily school children.

The Coroner's office no longer occupies the main floor and basement of the building. The VPHS has expanded their occupancy within the building to occupy the main floor as well. This occupancy has not been approved and the VPHS has been advised to cease occupation of the lower and main floors. The VPHS wishes to formalize its expanded operations. Inaddition to Council's approval, expansion will require certain building upgrades to meet the requirements of the Vancouver Building Code. The VPHS are seeking Council's support to occupy the entire building and financial support towards the necessary upgrades.

Consequently, the VPHS has commissioned a consultants' study to determine the extent of the building upgrades, which include improvements to exiting, sprinklers, fire separations, minor alterations to washrooms, and provide handicapped access to the floor areas. The building exterior requires general upgrading to maintain and preserve exterior finishes (repointing brick, repair to concrete, stone and waterproofing membranes). The recommended upgrade program has an estimated budget of $238,000. Costs associated with full heritage restoration, seismic upgrading and conversion of steam heating, are not included.

The VPHS has agreed to fundraise towards some of these upgrade costs. Their ability to attract funds to improve the City's building is however, limited. Their fund-raising focus is primarily on "in-kind" donations which serve their day-to-day programs and ongoing operating expenses. The VPHS has indicated that they are able to secure some donated materials and services for a capital project. Further, they are preparing to make an application to the Department of Canadian Heritage's Cultural Spaces Canada Program. The balance of the funds are requested from the City.

Cultural Affairs staff have reviewed the request and notwithstanding the commitment of the VPHS staff and volunteers, have concerns and questions regarding the sustainability of the Museum's operations and their ability to raise the necessary operating and capital costs of occupying the full building.

VPHS has expressed an interest in exploring the option of co-locating within a future police campus. Alternatively the VPHS may wish to explore partnership options to co-locate with the Vancouver Museum or the Gastown Business Improvement Association.

Staff note that the lower floors have remained vacant for some time. The building was being considered as a possible site for a Sobering Centre although an alternate site has now been secured. No other use options have been explored. Staff recommend that a more comprehensive review of uses be undertaken and that staff review and report back for Council's consideration within 6 months with proposed uses which support the strategic directions of the Downtown Eastside Revitalization Program. The VPHS may, having explored the options outlined above, also wish to be considered as part of this options review.

All of these options will take some time to explore. Staff therefore recommend that Council approve a five-year lease to the VPHS for the upper floor of the building only (therebyalleviating the need for building upgrades) with terms and conditions similar to other non-profit organizations occupying City-owned premises and as generally outlined in Appendix "B" of this report.

This proposed lease differs from the current operating arrangements as follows:

Cultural Mandate and Policies: As part of the lease agreement, staff have proposed that the Vancouver Police Museum Society articulate and include as part of the lease, its mandate, mission, objectives, and use policies to ensure that the public benefits continue over the term of the lease.

Maintenance and Repairs: This lease proposes to clarify areas of responsibility for maintenance and minor repairs (the VPHS) and major structural repairs including roof, foundations, infrastructure services and building systems (the City).

Utilities and Operating Expenses: The City, through Building Management's Operating Budget currently pays approximately $35,000 per year for utilities, insurance, and maintenance. Staff recommend that the current operating model be amended and that the VPHS be responsible for their utilities and operating expenses, consistent with other non-profit tenants in other City-owned buildings such as the adjacent Firehall Arts Centre.

The balance of the lease terms are detailed in Appendix "B".

FINANCIAL IMPLICATIONS

The City has budgeted $35,100 for utilities and maintenance of the building through Building Management's Operating Budget. Staff estimate that a budget of $8,000 is necessary to provide a minimal level of preventative maintenance. The balance of the costs are operating costs and more appropriately the responsibility of the tenant. Staff recommend that the VPHS assume responsibility for _ of the utility and operating costs ($9,000 per year). The balance of the operating costs would continue to be paid by the City until such time as alternate uses are agreed-to for the lower floors at which time those costs would be passed on to the future tenant/user. Should Council wish to extend a lease of the full building to the VPHS, they would be responsible for $27,100 per year in operating costs.

Should Council wish to support the VPHS's capital request, staff recommend that as with other cultural capital projects, the City's contribution be limited to _ of the total costs (a maximum of $80,000) and further, that the VPHS be advised that any further capital and operating costs be the responsibility of the Vancouver Police Historical Society.

CONCLUSION

Staff recommend that Council approve a five-year renewable lease to the VPHS for the third floor of the City-owned building noting that the opportunity to explore the VPHS's expansion options may be considered in the context of a fuller review of a range of use options for the balance of this important community and heritage resource.

* * * * *

LINK TO APPENDIX A

Appendix "B"

Agreement between the City of Vancouver (City)
and
the Vancouver Police Historical Society (VPHS)

DRAFT TERMS

Term: Five years commencing June1, 2002, renewable for two further five-year terms

Rent: $10.00 payable in advance

Premises: The third floor of 238 - 240 East Cordova Street

Lease:
The City to grant:
· a lease of the third floor of the Building, such areas shall be shown on plans to be appended to the agreement, for the purposes set out in the Use section below; and
· license to use portions of the building in order to access the third floor of the Building.

Use:
The permitted use of the Premises include:
· operation of a police museum within the Mandate and Cultural Objectives established by the VPHS appended to the agreement as a schedule and approved by the City (see below);
· purposes necessarily incidental to the operation of a police museum, and permitted within the zoning including venue rentals and fund raising activities in accordance with an Occasional Third Party Use Policy (see Occasional Third Party Use section).

Cultural Objectives:
As part of the lease agreement, the VPHS's Mandate and Cultural Objectives, established by the VPHS, appended to the agreement, and approved by the City, will be used as annual and periodic performance measures. The VPHS may amend the Mandate and Cultural Objectives from time to time, subject to City approval.

Public Access:
The agreement will set a standard for equitable access for the general public to exhibits, programs and rental opportunities including minimum hours of operation etc..

Occasional Third Party Use:
The VPHS may contract with third parties for occasional use of the Premises periodically as set out in an Occasional Third Party Use Policy which will form part of the Lease Agreement and be subject to City approval. All rentals will be required to be appropriate to, and support the Mandate of the VPHS. The VPHS agrees to abide by any rules or regulations imposed by the City provided that such rules and regulations are consistent with the Third Party Use Policy. The VPHS may not assign or sublet any portion of the Premises without the City's permission.

Insurance:
The City will insure the Premises against fire, vandalism etc. as determined by the City's Director of Risk and Emergency Management.

The VPHS will be responsible for insuring all equipment, fixtures and furniture and will be required to maintain comprehensive general liability insurance as well as all risk broad form tenant's legal liability insurance in the amounts and types to the satisfaction of the City's Director of Risk and Emergency Management.

Utilities, Janitorial Services, Maintenance, Repairs and Security:
VPHS to be responsible for a proportional (approximately 1/3) share of the total cost of providing heating, lighting, fuel, water, garbage removal to the Premises including related maintenance costs based on a cost per square foot formula. The VPHS will also be responsible for all janitorial and internal security services; all telephone and cable services, all maintenance and repairs to the premises all as outlined in a Service Agreement which shall be appended to the lease agreement.

Subject to the will of Council and the resources available, the City will make such major capital repairs (including but not limited to repairs to the roof, bearing walls and floors) as the City deems necessary. The definition of major capital repairs shall be detailed in the Service Agreement.

Improvements:
Consent is required to alter, erect, or modify (hereinafter referred to as "improvements") the Premises. In the event consent is given, the City may attach conditions or deadlines as it sees fit and the VPHS will be responsible all cost of improvements, and claims or liabilities of any kind arising from the improvements.

Reporting to the City:
On or before April 30th of each year and at any time requested by the City, the VPHS will provide to the City the following:
· financial statements for the previous year, prepared at the VPHS's expense by a firm of chartered accountants and to include all operating, capital and special purpose funds;
· an annual budget, approved by the Board of Directors, and including an estimate of all revenues and expenditures;
· such other financial reports requested by the City from time to time;
· a summary of activities for the past year demonstrating how they have fulfilled their Mandate and Cultural Objectives;
· a summary of activities for the coming year detailing how such activities will work towards accomplishing the VPHS's Mandate and Cultural Objectives; and

Further, on request the VPHS will submit minutes of all Board meetings to the City.

Early Termination:
The City may terminate the agreement prior to the end of the Term on the happening of any one or more of the following events:
· VPHS is in default on any payments owed to the City following 30 days notice;
· VPHS defaults in performing any other provision of this agreement;
· the Premises are closed to the public for 30 days without the City's consent;
· the Premises are not used in the operation of a police museum to the satisfaction of the City;
· VPHS becomes bankrupt, is wound up or dissolved;
· by mutual consent.

And such other terms and conditions as may be satisfactory to the Directors of Legal Services, Real Estate, and the Office of Cultural Affairs, it being noted that no rights or obligations hereby arise or take effect until the agreement has been executed by both the City and the VPHS.

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