Vancouver City Council |
ADMINISTRATIVE REPORT
Date: January 13, 2004
Author/Local: KHemmingson/6077 GMcGeough/7091
RTS No. 03906CC File No. 1401-63
Meeting Date: January 29, 2004
TO:
Vancouver City Council
FROM:
Director of Current Planning
SUBJECT:
46 Water Street - Heritage Building Rehabilitation Program
RECOMMENDATION
A. THAT Council authorize the City to enter into a Heritage Revitalization Agreement to secure the conservation and rehabilitation of the Franks Building at 46 Water Street and to supplement Development Application No. DE407842 and the HA-2 zoning to:
(i) grant a density bonus of 4 226 m2 (45,500 sq. ft.) available for transfer, which includes both 1 551 m2 (16,700 sq. ft.) of notional residual density and 840 m2 (9,000 sq.ft.) if this project does not receive a Historic Places Initiative grant from the Federal Government;
(ii) limit the development of the site to the built form proposed in Development Application No. DE407842 plus a potential one storey addition; and
(iii) permit commercial live/work use on the upper floor;
AND THAT Council require a covenant providing that the density bonus not be available for transfer until the rehabilitation is complete, unless the owner secures completion of the rehabilitation by a separate agreement.
B. THAT, subject to approval of RECOMMENDATION A, Council authorize a facade grant of $50,000, source of funding to be the 2003 - 05 CapitalPlan. Approval of this recommendation requires eight (8) affirmative votes.
C. THAT the agreements shall be prepared, registered and given priority to the satisfaction of the Directors of Planning and Legal Services.D. THAT, subject to approval of RECOMMENDATION A, Council instruct the Director of Legal Services to prepare a Tax Exemption By-law for 46 Water Street for a property tax exemption which is not to exceed a value of $382,000 or a period of ten (10) years, which ever comes first.
E. THAT, if the Tax Exemption By-law receives the assent of electors or is deemed approved by electors under the Vancouver Charter, the Director of Legal Services bring forth a Tax Exemption By-law providing that:
(i) if issuance of an occupancy permit for the heritage rehabilitation work authorized under Development Application No. DE407842 occurs before October 31st, the tax exemption period for 46 Water Street will begin on January 1st of the next calendar year;
(ii) if issuance of an Occupancy Permit for the heritage rehabilitation work authorized under Development Application No. DE407842 occurs on or after October 31st, the tax exemption period for 46 Water Street will begin on January 1st of the calendar year after the next calendar year; and
(iii) if the owner of the property does not fulfill all requirements necessary to obtain an Occupancy Permit within sixty (60) months after the enactment date of the Tax Exemption By-law, it will have no further force or effect.
F. AND THAT the Director of Legal Services bring forth the by-law to authorise the Heritage Revitalization Agreement.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of A, B, C, D, E, and F.
COUNCIL POLICY
The Transfer of Density Policy and Procedure
Heritage Building Rehabilitation Program Policies and Procedures for Gastown, Chinatown and Hastings Street Corridor
Approval of grants requires eight (8) affirmative votes
PURPOSE
The purpose of this report is to seek Council support for a Heritage Revitalization Agreement (HRA), facade grant and property tax relief to secure the rehabilitation and long-term conservation of the "C"-listed building at 46 Water Street.
46 and 52 Water Street are the first two properties to participate in the City's Historic Building Rehabilitation Program. These two reports before Council today, 46 Water Street and 52 Water Street, are companion reports and are side-by-side developments. Council is being asked to approve a similar package of building incentives. The differences for the 46 Water Street project include reconstruction of the original facade, commercial live /work use on the second floor, and the opportunity for a one-storey addition, set back from the principal facade, at some future time.
BACKGROUND AND SUMMARY
Gastown Heritage Management Plan: In July 2003, City Council approved a Building Rehabilitation Program (BRP) for Gastown, Chinatown and the Hastings Corridor. The program will be available for a five-year period (2003 - 2008) to initiate economic activity in these historic areas. The objective is to encourage owners to rehabilitate their heritage buildings by compensating them for "shortfall costs". These costs are defined as the amount required to make a project viable when a major building upgrade is completed. The City determines the amount of each incentive through site-specific analysis and compensation is given to the owner through various tools in the following order:
· Historic Places Initiative (HPI) grants
· Facade Grant
· Property Tax Exemption
· Transferable Bonus Density
As an added incentive for preserving low-scale historic buildings that contribute to the distinctive "sawtooth" character of historic Gastown, the BRP allows the City to authorize transfer of notional residual density off-site, as a part of the bonus density allocation. It is referred to as notional density as there are no FSR regulations in Gastown. Therefore, the main factor in regulating development potential is the height limit. Based on this, Council established as part of the BRP that "residual" density is the difference between 5.5 and the on-site FSR.Historic Places Initiative (HPI) is a Federal Government heritage building incentives program that awards building owners 20% of the total rehabilitation costs, up to a $1,000,000 maximum, in the form of a cash grant after the work is completed. This project has been put forward for consideration; however, the program is in the process of being implemented and, therefore, it is unknown at this time whether this site will receive a federal grant. The recommended HRA has been structured to award the owner an equivalent value of transferable bonus density if the owner is not successful in receiving a federal grant.
DISCUSSION
Proposal: 46 Water Street is located near the centre of the Gastown Historic area (please see Map in Appendix A). On behalf of the owner, Busby + Associates Architects have submitted a development application proposing to rehabilitate and code upgrade the heritage building in exchange for compensation through the Building Rehabilitation Program. The requested compensation package includes transferable bonus density, a property tax exemption and a facade grant.
Heritage Value: This two-storey building was constructed in 1887 or 1888 as a retail store for Russian immigrant, Zebulon Franks. It stocked everything needed by "logger, fisherman, miner and trapper". The business was carried on by his son until 1996 as Y. Franks Appliances. The earliest Jewish religious services in Vancouver are said to have been held in this store. Its heritage value is largely historical, as a major renovation in the 1960s removed significant architectural features. Archival photos have revealed the original style of the front facade, which had five tall windows, topped by a curved arch, above a typical storefront. This building also contributes positively to the collection of low-scale historic buildings which comprise this block of Water Street.
Proposed Rehabilitation Work: It is proposed to recreate the original storefront design, with wooden windows, concrete cladding and a metal storefront. Project elevations and floor plans are attached as Appendix B. The rear elevation, facing Blood Alley is largely intact and will be mainly conserved. The ground floor of the building will continue its historical retail use while the second floor will become commercial live/work space.
In addition, the entire building will be upgraded to meet current building codes including seismic upgrading.
Heritage Revitalization Agreement: The recommended HRA and associated covenant would ensure the reconstruction of the original front facade, along with the rehabilitation and conservation of the rest of the building, as well as commitment from the owner for on-going maintenance. The HRA will authorize: bonus density to be transferred off-site; the ability to use the upper floor for commercial live/work use; and the opportunity for a one-storey addition, set back from the principal facade, at some future time.
Rehabilitation Short Fall Cost: In accordance with Council's Heritage Building Rehabilitation Program Polices and Procedures for Gastown, Chinatown and Hastings Street Corridor, staff have reviewed the applicant's shortfall costs calculation and undertaken an independent analysis. Staff have concluded that a total shortfall cost of $1,150,000 is justified for compensation in the following manner:
Bonus Density Implication | ||
Federal Historic Places Initiative* |
$223,700 |
840 m2 (9,000 sq.ft.) |
Facade Grant |
$50,000 |
|
Property Tax Exemption |
$382,000 |
|
Density (to meet shortfall costs) |
$494,300 |
1 837 m2 (19,800 sq.ft.) |
Shortfall Cost |
$1,150 ,000 |
|
Notional Residual Density |
$418,400 |
1 551 m2 (16,700 sq.ft.) |
Total Bonus Density (assuming no HPI grant) |
4 226 m2 (45,500 sq.ft.) | |
Total Compensation |
$1,568,400 |
*Should the applicant not receive the federal grant, the HRA grants the owner this additional amount of transferrable bonus density.
Tax Exemption By-law Process: The Vancouver Charter lays out the requirements for an enabling tax exemption bylaw and notification process for the public. If Council approves the recommendation to provide a property tax exemption, staff will advertise notice of the proposed by-law as required by the Vancouver Charter, and state that Council may adopt the by-law after 30 days unless more than 1/20 of electors petition Council. If 1/20 or fewer electors petition Council within the 30 day period, the Vancouver Charter deems that the electors have approved the tax exemption, and Council can proceed to enact the by-law. If more than 1/20 of electors petition Council, then a further report will recommend to Council whether or not to seek the assent of electors and the process required to do so.
The Property Tax Exemption By-law will stipulate the terms under which the recommended property tax exemption will be provided. The By-law will provide a complete property tax exemption to the property for the period necessary to achieve the stipulated tax exemption of $382,000 after which the property will be fully taxable. Should the entire amount not beachieved in a ten (10) year period, the exemption will expire and the property will become fully taxable. The exemption will be effective in the tax year immediately following issuance of an Occupancy Permit for the building. Staff will provide an annual report to Council on the status of this and other exemptions approved under the program.
Inventory of Unsold Density: In November 2002, the balance of unsold heritage density reached a historical high and has since been reduced to 39 683 m2 (427,164 sq. ft.). Of this amount, 18 189 m2 (195,800 sq. ft.) is being held by heritage building owners for use on their future projects and 16 804 m2 (180,889 sq. ft.) is identified for take-up by developments and rezoning applications in process. The net balance of 4 692 m2 (50,510 sq.ft.) is available for sale. This recent take-up of density is very positive.
If Council were to approve the recommended HRAs for 46 and 52 Water Street and if, in the worst case scenario, neither project receives Federal Government heritage grants, together they will add 10 600 m2 (114,100 sq. ft.) to the inventory. The new balance of density available for sale will be 15 292 m2 (164,610 sq. ft.). Staff support this balance.
Comments of the Gastown Historic Area Planning Committee: On September 17, 2003 the Gastown Historic Area Planning Committee reviewed the application and supported the project.
Notification: In accordance with the Vancouver Charter Public Hearing provisions, a newspaper advertisement has been placed in two consecutive issues of a local newspaper. The building is currently unoccupied, therefore there are no tenants to notify. The surrounding property owners were notified. Staff have received two letters in support.
CONCLUSION
The proposed density bonus, tax exemption and facade grant would compensate the owner for the shortfall costs involved in rehabilitating this "C"-listed Heritage Register building. The recommended Heritage Revitalization Agreement (HRA) and associated covenant will secure the City's interest of ensuring the building is promptly rehabilitated, seismically upgraded, and maintained on an ongoing basis.
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