CITY OF VANCOUVER
CITY MANAGER'S OFFICE
Judy Rogers, City Manager
Brent MacGregor, Deputy City Manager

M E M O R A N D U M

DATE: October 15, 2002

TO: Mayor and Members of Council

FROM: Brent MacGregor

CC: Burke Taylor, Director, Social Planning

SUBJECT: Vancouver Police Historical Society (VPHS)

Further to the staff report considered by Council at Planning & Environment Committee September 19th, staff have reviewed the amendments requested at that time by the VPHS in their submission including:

· a temporary occupancy permit for the use of the lower floors for storage;
· a grant to cover all building operating costs (@ $36,000 per year); and
· a lease of the whole building for ten years.

In their presentation, the VPHS made an additional request for a civic capital contribution of 1/3 of the required capital costs ($80,000) to upgrade the building.

Temporary Use:
It is necessary for the VPHS to cease occupation of both lower floors for museum purposes until such time as life/safety improvements have been made and the necessary occupancy approvals secured. By earlier Council resolutions, the City indemnifies the VPHS Board and any claims or losses arising from the VPHS's unauthorized occupation of the lower floors would fall to the City. Staff therefore continue to support the recommendation directing the VPHS to cease occupation of the lower floors. Staff fully support the VPHS's request to use the basement area for storage as this is already a permitted use. Access can be formalized through the proposed lease/license agreement.

Grant of Operating Costs:
The VPHS are asking Council to provide an annual grant for building operating and utilities costs - $36,000 per year. The `grandfathered grant" that the VPHS reference is an allocation within Building Management's operating budget. Staff are recommending that $8,000 per year continue to be provided through Building Management for preventative maintenance. However, staff recommend that the VPHS assume responsibility for the balance of the operating costs - @ $9,000 per year for the upper floor only, or should Council choose to grant a lease of the whole building, $27,000 per year. This level of building support would be consistent with the City's 80 other non-profit tenants, including the Firehall Arts Centre next door.
Lease of the Whole Building:
The VPHS have requested a lease of the whole building in advance of securing the funds necessary to complete the required upgrades. Generally, the City does not provide a lease in advance of a non-profit tenant securing all necessary capital and operating funding for the intended use. If the Society were unable to secure the necessary resources, the building could remained closed for up to ten years and the City would have limited its ability to put the lower two floors to alternate use - a possible lost community resource if occupied for public purposes or a possible forgone rental revenue of at minimum $50,000 per year if leased (based on current lease rate paid by a non-profit organization in the neighbourhood).

Staff had therefore recommended in the June 10^th report that the lower two floors be withheld from alternate disposal for a period of six months. During that time, the VPHS could raise the necessary funds and return to Council for a lease of the full building or staff could identify other public uses or commercial tenants.

If however, Council wishes to support the spirit of the lease request from the VPHS, then staff recommend that the VPHS's occupancy on the upper floor be formalized immediately, and that Council approve, in principle, a lease of the whole building to the VPHS subject to a series of conditions including securing the necessary capital and operating funds within a reasonable time frame as outlined in the revised report.

Capital Contribution:
Generally, it has not been Council's practice to provide capital funding to the many worthy special-interest museums. The City has however provided capital support to the Vancouver Museum, Roedde House and Hastings Mills - all City-owned facilities. Should Council choose to support the VPHS's request for funding, the source of funds would logically be the City-owned social service and cultural facilities budget within the 2003-2005 Capital Plan, although staff note that this was not anticipated when funding requests were made and will result in the deferral or cancellation of other planned projects. Staff will report back seeking Council authorisation for a specific capital allocation at such time as the VPHS secure the balance of the capital funding.

Recommendations:

Staff have reviewed the VPHS's request and present the following recommendations in the attached revised report and recommend that:

· Council approve a lease of the third floor for museum purposes, and a license to use the basement for storage for a term of ten years under terms and conditions similar to other non-profit tenants; and

· Council approve in principle a lease of the whole building for museum purposes for a term of ten years under terms and conditions similar to other non-profit tenants subject to confirmation within 12 months that the VPHS has secured the balance of the funding to complete the necessary building upgrades.

Brent D. MacGregor
Deputy City Manager

(c) 1998 City of Vancouver