ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

Directors of the Housing Centre and Non-market Operations in consultation with the Director of Facility Design and Management

SUBJECT:

Renovation of the Central Residence: 42 - 44 East Cordova St.
Budget Increase and Award of Contract

 

RECOMMENDATION

GENERAL MANAGER'S COMMENTS

POLICY

The City's social housing objectives are to: Maintain and expand housing opportunities in Vancouver for low and modest income households with priority being given to families with children; seniors on fixed incomes or in need of support; SRO residents; and the mentally ill, physically disabled, and others at risk of homelessness.

The City's housing objectives for the Downtown Eastside are to maintain and upgrade the stock of housing affordable to residents of the SROs, and to increase the diversity of housing.

Council approval is required for contracts over $300,000, and contracts are to be awarded on the basis of best value for the City.

PURPOSE

This report requests Council's approval to increase the capital budget for the renovation of Central Residence (42 - 44 East Cordova Street) by $428,000 for unanticipated remedial work; and to award a contract for renovation of the building to the low bidder, Parkwood Construction. The increased funding would be provided from City's Affordable Housing Fund.

BACKGROUND

The Central Residence at 42-44 East Hastings St. is an existing 6-storey City-owned building containing 131 SRO units averaging 100 sf. each and 3,000 sf of ground floor retail space. It was built in 1893 and is listed in the City's heritage registry as a `B' class building. The City acquired the building in 1976 and since then it has been operated by the City's Non-Market Operation as part of its housing portfolio. Operating subsidies are provided by CMHC and BC Housing equally under a subsidy agreement that extends to 2013. There is a CMHC mortgage on the property that will be paid off in 2010.

In April and July 2000, two fires occurred in the building resulting in extensive damage to 27 rooms. These rooms have been closed and vacated since. The insurance proceeds from the fires totalled $295,000 of which $178,000 remains after clean-up.

On October 21, 2000, Council considered a report recommending a feasibility study to explore renovation options for Central Residence. BC Housing agreed to provide $1,000,000 in return for a Housing Agreement requiring the City to operate the building as non-market housing for low income singles for 20 year beyond the expiry of the CMHC mortgage. A Memorandum of Understanding with BC Housing was signed and Chernoff Thompson Architects were retained to conduct a feasibility study which generated four options.

On June 25, 2002, Council considered the options prepared by Chernoff Thompson Architects and approved the option for an enhanced minimal upgrade converting the existing 131 small sleeping rooms to 64 larger units of which 54 would have their own bathrooms. The estimated total cost of the renovation was $1,542,000. The enhanced minimal upgrade option focussed on improving living conditions for residents and dealing with deferred maintenance in this 110 year old building.

Council approved the recommendation:

"THAT Council approve the renovation of the Central Residence to create 64 enlarged SRO units (54 with bathrooms and 10 without) at an estimated total cost of $1,542,000 with funding to be provided from the insurance proceeds for two recent fires in the building ($178,000) and from BC Housing ($1,364,000)."

By a memo dated October 28, 2002, Council was advised that the total cost of renovations was now estimated at $1,965,175, an increase of $428,000 from earlier estimate, and that staff would report back once tenders for renovations were received in December 2002.

REVISED CAPITAL BUDGET

The increase in the cost of renovating the Central Residence is due to the increased cost of removing asbestos, and increase in the cost of the mechanical work, and an increase in the scope of the renovations.

The cost of removing asbestos has increased because of the history of the building. The Central Residence appears to have been built as two separate buildings that, in the distant past, were joined to make one. The recent fires exposed a wood frame structure, and it was assumed that the whole building was wood frame. However, during asbestos removal half the building was revealed as being built of pumice block. Removing asbestos from pumice block is more difficult and expensive, as it crumbles when plaster is removed, requiring the disposal of more material and more extensive reconstruction of walls. The cost of asbestos removal has increased by $224,000.

The cost of mechanical work has increased to meet code upgrades that were not included in the original estimates, such as sprinkler heads, washroom exhausts, upgrading the existing radiators and boilers, and replacement of copper piping. The cost of increased mechanical work is $69,000.

The increase is the scope of the renovations consists of improvements to the entry to enhance the security of the building, improvements to the facade as recommended by the Heritage Advisory Committee, and water proofing repairs to the upper east exterior wall. This workhas not yet been tendered but Facilities Development advises that a budget of $135,000 should be sufficient to cover the cost. the architect and staff have reviewed the work and conclude a budget of $135,000 should be adequate.

These three items increase the total capital cost for the renovation from the $1,542,000 approved by Council to $1,970,000, an increase of $428,000. Facilities Development has reviewed the cost of the project, and advises that these increases are required costs, and that the budget should be increased accordingly. Facilities Development advises, now that the project has been tendered, that the increased budget should be sufficient to cover the cost of the renovations, with little risk of further increases. Staff have reviewed the revised budget with the Architect and conclude these items are required and that the budget should be sufficient. Tendered prices for construction are within the budget and contingencies are included to reduce the risk of further increases.

BC Housing is already providing $1,364,000 to the project, an increase from their original commitment of $1,000,000. In return for BC Housing agreeing to increase their contribution $1,364,000, it was agreed that that was the maximum they would be expected to provide. The Central Residence is owned by the City and no City funds have been committed to the project to date. It is appropriate that the City cover the increase in costs, and it is recommended that Council approve a $428,000 increase in the capital budget with the funding to be provided from existing capital funding allocated to the City's Affordable Housing Fund.

AWARD OF CONTRACT FOR THE RENOVATIONS

From an open request of expressions of interest for pre-qualification of general contractors, seven contractors were prequalified on the basis of a published set of minimum requirements to submit tenders for the project. Five complete tenders were received as follows:

On the basis of best value it is recommended the contract be awarded to Parkwood Construction Ltd., the low bidder, in the amount of $1,132,749 plus GST. Parkwood Construction met all the requirements of the tender documents. The contract value is within the amount budgeted for this portion of the project. All tenderers have been advised of this recommendation.

A Building Permit (BU422933) for interior work should be issued shortly. Work will begin upon receipt of the permit and approval of the award of contract with the objective of moving tenants back into the building in the summer of 2003.

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ag20030128.htm

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© 2002 City of Vancouver