CITY OF VANCOUVER
ADMINISTRATIVE REPORT
Date: |
July 15, 2003 | |
Author: |
Rob Whitlock | |
Phone No.: |
604-873-7432 | |
RTS No.: |
03524 | |
CC File No.: |
2001 | |
Meeting Date: |
July 29, 2003 |
TO: |
Vancouver City Council |
FROM: |
Director of the Housing Centre |
SUBJECT: |
Civic Grant to the Lu'ma Native Housing Society Housing Project at 1254 East 8th Avenue |
RECOMMENDATION
THAT Council approve a grant of $200,000 to the Lu'ma Native Housing Society to reduce the costs associated with the prepaid lease for their housing project at 1584 East 8th Avenue, approved by City Council on March 13, 2001; source of funds to be City-wide DCL funds for replacement housing as provided in the 2003-2005 Capital Plan; AND THAT the commencement date for the lease be re-set as 180 days from the date of Council's approval of this recommendation.
This recommendation provides for a grant and requires eight affirmative votes of Council.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of the foregoing.
COUNCIL POLICY
· It is City practice to purchase sites and lease them to non-profit housing societies or co-operative associations for 60 years at a pre-paid rent of 75% of freehold market value.
· In situations where the development of non-market housing projects are not viable because of high land or construction costs in the City, Council has provided grants to non-market sponsors to ensure they can proceed.
· February 21, 2001: City Council approved proposed lease terms for 1254 East 8th Avenue, for the Lu'ma Native Housing Society.
PURPOSE
The Director of the Housing Centre has received a request from the Lu'ma Native Housing Society to provide $200,000 of assistance in making the pre-paid lease payment in the amount. This report reviews the background of this non-market housing project and recommends to Council that a grant be provided to the Society.
BACKGROUND
The site was purchased as part of a left turn bay project for Clark Drive and Broadway. The area needed for widening Clark Drive was taken, and the remaining site was available for sale or lease.
On February 21, 2001, City Council approved proposed lease terms for the Lu'ma Native Housing Society, which intends to construct 22 apartment units for families and singles, as one of the last projects under the HOMES BC non-market housing program.
The approved lease terms are as follows:
· a term of 60 years;
· a pre-paid lease rent of $880,050 (75% of the market value of the site);
· commencement date being 180 days from the date of Council approval of the lease terms or as such later date as may be approved by the City Manager;
· the City may cancel the lease if construction has not commenced within 12 months of the date of commencement of the lease;
· such further and other terms as are acceptable to the Director of the Housing Centre, the Director of Real Estate Services and the Director of Legal Services; and
· no legal rights or obligations are hereby created and none shall arise hereafter except upon signing of all of the agreements by all parties.
Conditional allocation for the project was given by BC Housing in January 2001.
DISCUSSION
Since BC Housing approval was received in January 2001, increases have been experienced in both construction and insurance costs. As a result, the project is now $460,000 over budget.
The cost increases associated with this project are unfortunate but unavoidable. The Director of the Housing Centre believes that the project is still very much needed, and the site is well located to serve the needs of the Society's members.
The Society has raised $130,000 to partially offset this overage and has requested the City to subsidize the lease terms to reduce the costs to them by $200,000. Should Council support this request, the mechanism would be to provide Lu'ma Native HousingSociety with a grant of $200,000 to assist with the prepaid lease. The source of funding for this grant would be City-wide DCL funds for replacement housing as provided in the 2003-2005 Capital Plan.
The City Manager previously extended the 180 commencement day requirement outlined in the lease terms, on December 9, 2002. If Council approves the change in the lease rent, the lease can be finalized.
CONCLUSION
The Director of the Housing Centre supports this project, and believes that the recommended City support for the pre-paid lease that will reduce the costs for Lu'ma Native HousingSociety from $880,050 to $680,050, is necessary if the project is to proceed.
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