ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

Director of Social Planning in consultation with the Directors of Legal Services and Real Estate Services

SUBJECT:

Amenity Bonus Sublease: 100 - 1140 West Pender

 

RECOMMENDATION

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

The Amenity Bonusing Program, as approved by Council in 1986, provides for the sublease of an amenity bonus space to a Vancouver-based non-profit social service and/or cultural organization at a nominal rate and includes a series of requirements and obligations of the subtenant with respect to public service and financial management.

The lease or sublease of City assets below market value constitutes a grant and as such requires eight affirmative votes.

PURPOSE

This report seeks Council's approval to enter into a sub-lease of the amenity bonus facility at 100-1140 West Pender Street with Vancouver Society of Childcare Centres (VSOCC) for the purpose of a 16-space licensed childcare centre. A companion report, Capital Budget: City-owned Childcare, Social Service and Cultural Facilities seeks Council approval for related capital costs associated with this facility.

BACKGROUND

The City's amenity bonusing program secures facilities in the downtown in partnership with private development. The City secures the amenity facility through a Head Lease, generally for the life of the building, and subleases the premises to a Council-approved non-profit society. The non-profit society is responsible for providing community services and benefits accessible to the public, and for all of the City's obligations under the head lease.

Council policy and practise has been to seek non-profit uses for amenities which encourage a diversity of cultural, social and recreational uses in the downtown with a focus on public participation including live theatres for the performing arts, film theatres, galleries for the display of art, public exhibition halls, public education and childcare facilities.

DISCUSSION

In 1984 Council approved an amenity bonus at 100 - 1140 West Pender Street and a sublease of the space to the YWCA for the purpose of a childcare centre, known as "Granny Y". In the mid 1990s Granny Y moved out and Pooh Corner Childcare moved in on an interim basis while their permanent facility was renovated. The Pooh Corner building in Stanley Park was completed in late 2002 and the Pender Street facility is now vacant.

The amenity space at 1140 West Pender is in need of repair and refurbishment. The interior space is poorly configured, needs new lighting and plumbing. While there is an adjacent outdoor play area, there is no landscaping, weather protection or play equipment. A companion report, Capital Budget: City-owned Childcare, Social Service and Cultural Facilities seeks Council approval for up to $100,000 in capital costs associated with this sublease. Subject to Council approval, this work can be completed in March/April and the amenity space ready for occupancy May 1, 2003.

The Vancouver Society of Childcare Centres (VSOCC) operates three City-owned childcare centres - Dorothy Lam, Quayside, and Library Square Childcare Centres. As a larger multi-centre operation, VSOCC has the organisational capacity to operate a 16-space centre and to raise a portion of the required capital dollars to complete the necessary renovations.

Subject to Council approval, staff will execute a sublease with VSOCC on terms and conditions as are generally outlined in Appendix "A" of this report, as well as other terms as are required by, and satisfactory to the Director of Legal Services in consultation with the Directors of Social Planning and Real Estate Services.

FINANCIAL IMPLICATIONS

As with other City-owned childcare centres, the City's Building Management staff provide basic preventative maintenance services. Staff estimates the annual costs of this service to be $3,500 per year and Recommendation B seeks an increase to the Facilities Maintenance annual operating budget.

CONCLUSION

Staff support the sublease of the refurbished amenity bonus facility at 1140 West Pender to Vancouver Society of Childcare Centres for the purposes of a 16-space licensed childcare facility.

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APPENDIX "A"

Sublease between the City of Vancouver (the "City")
and
Vancouver Society of Childcare Centres (the "Society")

SUBLEASE TERMS

Term: Five years commencing May 1, 2003, renewable for two further 5-year terms.

Rent: $10.00 payable in advance

Premises: 100 - 1140 West Pender Street

Sublease:
The City to grant:
· a sublease of the Premises as shown on plans to be appended to the sublease for the purposes set out in the Use section below.

Use:
The permitted use of the Premises is restricted to:
· the operation of a licensed childcare/child development facility (the "Facility") within the Mandate and Public Service Objectives established by the Society appended to the Sublease as a schedule and approved by the City (see below); and
· purposes necessarily incidental to the operation of a Facility and permitted within the applicable zoning.

Public Service Objectives:
As part of the sublease, the Society's Mandate and Public Service Objectives (draft to be provided by the Society for City approval) shall be included and used by the City as annual and periodic performance measures. The Society may amend the Mandate and Public Service Objectives from time to time with prior written City approval.

The sublease shall identify Public Service Objectives including:
· hours of operation;
· licensed capacity and numbers of children to be served by age on both full time and, if applicable, part time basis;
· type and range of childcare and child development services;
· process for parental input;
· administrative capacity;
· financial accountability;
· financial viability with evidence of diversified revenue sources; and
· quality, accessibility and affordability.

Laws, Regulations and Requirements
The Society shall comply with all laws and regulations relating to its operation of a Facility and shall provide evidence with such compliance on request by the City. The Society shall also comply with any requirements imposed on the Society by the City as Sublandlord in connection with the Society's operation of the Facility on the Premises.

Rentals:
The Society may contract with third parties for occasional use of the Premises periodically as set out in an Occasional Third Party Use Policy that shall form part of the Sublease and shall be subject to City approval. All such rentals will be required to be appropriate to, and support the Mandate of the Society. The Society may not assign or sublet any portion of the Premises without the City's prior written permission.

Insurance:
The Society shall be responsible for insuring all equipment, fixtures and furniture and shall 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.

The Head Landlord shall be responsible for insuring the building against fire and certain other perils. The City, as the Sub Landlord shall be responsible for paying the portion of the common area costs, if any, attributable to insurance on the building.

Utilities, Janitorial, Maintenance and Repairs:
A Service Agreement shall form a Schedule to the Sublease and shall itemize Head Landlord, Sub Landlord (City) and Society. In general, the Society shall be responsible for all utilities, security systems, janitorial services, maintenance and repairs such as lighting and appliance replacement and repairs, etc. The City shall be responsible for basic preventative maintenance. Major capital repairs such as special assessment for roof replacement, building envelope repairs, foundations, infrastructure services (water, sewage, power) and building systems (excluding security systems) shall be the responsibility of the Head Landlord where provided for in the Head Lease. To the extent that these costs are passed on to the City through the Head lease, the City will, within available resources contribute to special assessments for major capital repairs.

The Society shall be responsible for paying the common area costs (excluding insurance costs which the City will pay).

The Society shall be required to budget for an adequate maintenance reserve within its annual operating budget to meet the obligations in the Sublease.

Improvements:
Prior to the Society making any alterations, erections or modifications (hereinafter collectively referred to as "Improvements") to the Premises, the Society shall obtain the City's written consent. In giving its consent, the City may attach such conditions or deadlines as it sees fit and the Society shall be responsible for all costs of Improvements, and claims or liabilities of any kind arising from the Improvements.

Reporting to the City:
On or before December 31 of each year, or at any time requested by the City, the Society will provide to the City the following:
· Board-approved financial statements for the previous year, prepared at the Society's expense by an accounting professional. Such statements shall include all operating, capital, maintenance reserve and special purpose funds and shall itemize administrative and program costs;
· a balanced annual budget including an estimate of all revenues and expenditures;
· a summary of activities for the past year demonstrating how the Society has fulfilled its Public Service Objectives;
· evidence of a functioning/governing Board of Directors; and
· a summary of planned activities for the coming year. Further, if requested by the City, the Society shall submit to the City minutes of all Board meetings.

Indemnification:
The Society shall indemnify the City for any costs, losses, suits, or expenses incurred by the City arising as a result of the Society's use and occupation of the Premises and related City property.

Early Termination:
The City may terminate the Sublease prior to the end of the Term on the happening of any one or more of the following events:
· the Society is in default on any payments owed to the City following 30 days notice;
· the Society defaults in performing any other provision of the Sublease, including, without limiting the generality of the foregoing, failure to comply with any laws or regulations relating to its operation of a childcare/child development facility;
· the Premises are not operated as a childcare/child development facility for more than 30 days without the City's prior written consent;
· the Premises are not used in the operation of a childcare/child development facility to the satisfaction of the City;
· the Society becomes bankrupt, is wound up or dissolved;
· by mutual consent; and/or
· substantial destruction of the Premises or the building in which the Premises are situated

Options to Renew:
The Society may only exercise its options to renew if it is in good standing under the Sublease.

Additional Provisions and Qualifications:
The Sublease shall contain such other terms and conditions as may be satisfactory to the City's Directors of Legal Services, Facilities Design & Development, Social Planning and Risk and Emergency Management, it being noted that no rights or obligations hereby arise or take effect until the Sublease has been executed by both the City and the Society.

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