ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

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

SUBJECT:

Amenity Bonus Sublease Renewal - 900 Howe Street

 

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

The purpose of this report is to request Council approval to renew the sublease of an amenity bonused facility at 900 Howe Street to the Public Legal Education Society.

BACKGROUND

The City's amenity bonusing program secures facilities in the downtown in partnership with private development. The City's Official Development Plan permits developers to increase their on-site density in new construction in exchange for providing a public amenity of a social, recreational or cultural nature, subject to approval by the Development Permit Board and City Council.

Council policy and practise has been to seek non-profit uses for bonus amenity facilities 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.

A developer builds a fully finished amenity space, to the specification of the City, and prepays twenty years of the space's operating costs in exchange for additional density of equal value on-site. The City secures the amenity facility at a nominal rent through a Head Lease for the life of the building. The City sub-leases the amenity space to a Council-approved non-profit society at a nominal rent. The non-profit subtenant is responsible for providing community services and benefits accessible to the public, and is responsible for all of the City's obligations under the head lease. The non-profit society is also required to raise sufficient funds to create an endowment fund. The interest from the endowment fund is to cover the operating costs at the end of the developer's prepaid commitment and to ensure the public benefit for the life of the building.

DISCUSSION

The People's Law School ("Public Legal Education Society") has been active for 30 years, providing the public with information about the laws affecting their lives and teaching lay people about their rights and responsibilities under federal, provincial and municipal law. They operate a drop-in resource centre in downtown Vancouver making legal information available on a variety of topics in plain language, and in many cases in multiple languages. In addition, The People's Law School offers workshops and seminars for the general public as well as school programs such as "Justice Theatre".

The People's Law School has operated from the amenity bonus facility at 900 Howe Street since 1987. The 5,160 sq.ft. amenity facility provides a storefront presence in close proximity to the Vancouver Law Courts, the Motor Vehicle Branch, and other provincial and federal offices. The facility includes a reading room, library, classroom, meeting room and ancillary offices.

Staff have reviewed The People's Law School's past performance against the terms of the first sublease and confirm that all of the public service terms have been met or exceeded. This includes the operation of a library and reading room open to the public Monday through Friday, 8 hours per day; the provision of a minimum of 100 hours per month of lectures and events on legal matters; and making the facility available to other non-profit organizations including AIDS Vancouver, AMSSA, Battered Women's Support Services, BC Public Interest Advocacy Centre, Tenant's Rights Action Coalition, Westcoast Legal and Education Fund, Vancouver Custody and Access Support Association.

An additional condition of the first sub-lease was the requirement that the subtenant initiate and maintain throughout the term of the sublease, a fund raising drive to meet the occupancy costs of the premises in the event a second sub-lease is granted. Under the Head Lease, the building owner was responsible for common area and occupancy costs associated with the space for 15 years. Beyond 15 years, these costs become the responsibility of the Subtenant. Staff have reviewed the financial statements and projections provided by the People's Law School and confirm that through a combination of Endowment Funds ($350,000), designated operating funds from The Law Foundation and recovered revenues from sharing the office space, that the People's Law Society has sufficient resources to pay the operating costs and to maintain public services in the amenity facility for the duration of the recommended second sub-lease term.

Subject to Council approval, staff will execute a new sublease with The Public Legal Education Society 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

All occupancy costs including maintenance are the responsibility of the subtenant. There are no financial implications for the City beyond an annual property inspection by Facilities Design and Management staff.

CONCLUSION

Staff recommend a second sublease term to the People's Law School for the provision of accessible public legal information in downtown Vancouver.

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APPENDIX A

Sublease between the City of Vancouver (the "City")
and
The Public Legal Education Society (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: 150 - 900 Howe 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 public legal resource centre (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;
· type and range of services;
· process for community 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. 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 the responsibilities of the 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. 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 specialassessments 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 as well as the Head Landlord as required. 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 May 31st 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 an education/resource centre;
· the Premises are not operated as a public legal education resource centre for more than 30 days without the City's prior written consent;
· the Premises are not used in the operation of a public legal education resource centre 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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