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CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Date: |
June 22, 2004 | |
Author: |
Jill Davidson | |
Phone No.: |
7670 | |
RTS No.: |
04358 | |
CC File No.: |
4664 | |
Meeting Date: |
July 6,2004 |
TO: |
Vancouver City Council |
FROM: |
Director of the Housing Centre in consultation with the Director of Facility Design and Management |
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SUBJECT: |
Renovation of the Granville Residence: 1261 Granville Street,
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RECOMMENDATION
A. THAT Council approve an additional $1.4 million for a total estimated capital budget of $3.9 million for the renovation of the Granville Residence to create 82 self-contained units and two retail units, with the funding to be provided from the Downtown South Development Cost Levies
B. THAT staff report back on the value of the retail space which will be purchased by the Property Endowment Fund.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of A and B.
POLICY
The City's housing policy is to provide SRO replacement housing in Downtown South on a 1:1 basis and to achieve this through purchase of SRO buildings and building new non-market housing.
BACKGROUND
In December 2003, Council approved In-Camera the purchase and renovation of the Granville Hotel. The purchase price was $2.8 million, plus applicable taxes. The City took possession on February 26, 2004 and has since been operated by the City's Non-Market Operations Division. Council also authorized staff to enter into contracts up to $2.5 million for the renovation of the building. On June 8, 2004 Council approved a Single Room Accommodation Permit to reduce the number of designated SRA rooms from 100 to 82, and to convert the remaining 82 rooms to include washrooms and cooking facilities.
DISCUSSION
The Granville Residence is a five storey, 100 units building providing single room occupancy accommodation. The building was constructed in 1919. Each room is about 100 sq.ft. and there are shared bathrooms on every floor.
There are two retail spaces on the main floor which are currently vacant.
Chernoff Thompson Architects has been retained, initially as part of the pre-purchase due diligence, to evaluate the feasibility of renovating the building to create larger and more liveable units. Options were evaluated ranging from minimal upgrade, basic upgrade to include bathrooms and kitchens, full upgrade (with bathrooms and kitchens), and demolition and construction of new self-contained suites. Since the purchase was completed Chernoff Thompson Architects has done further work to investigate upgrading options and to submit the development and building permit applications.
Prior to the purchase of the building, it was expected that the City could take over the previous owner's plans and permits. This renovation would have provided a minimum upgrade with no cooking facilities in the suites and no building system or structural upgrades. On this basis the renovations would cost about $2.5 million and Council authorized staff to enter into contracts up to this amount.
The more detailed analysis has shown that the preferred option is to renovate the building to provide 82 self-contained units. Each suite will have a bathroom with a shower and toilet; a cooking area with a sink, fridge, hot plate or microwave; and a living/sleeping area. The units will be modest in size with the average about 160 sq.ft.
In addition, the ground floor will be developed to include a lounge for the tenants, washrooms, small kitchen and storage areas. The majority of the existing electrical and mechanical systems will be replaced, minor structural upgrade work will be completed, (limited seismic upgrading) extra security added and asbestos removed in the renovated areas. The retail spaces will be reconfigured into two more leaseable units. Overall, these renovations will enhance liveability for the tenants, improve the return on the retail space and extend the lifespan of the building by about 20 years.
The budget of this enhanced renovation is estimated at $3.9 million for both the housing and retail. The increase in cost is due to the expanded scope of renovation. This is considered a reasonable expenditure of the City's housing funds, given that the cost per unit of acquisition and renovation is estimated at $75,000 per unit, compared to $100,000 or more for a new small self-contained suite.
The process and timetable for the renovation is as follows: an SRA permit has been issued; the development and building permits are expected by the end of June; tendering will be complete by the end of August; award of contract will occur mid-September and construction will start immediately after; re-occupancy will occur by April 2005.
Staff will report to Council once the tenders for the renovations are received later this summer at which time a firm cost of the project would have been established.
When the City took over management there were about 30 tenants in residence. They were informed that the City intends to renovate the building, and that 2 months notice to vacate would be given once permits were in place, in conformance with the Residential Tenancy Act.
Relocation staff has met with each tenant to assist with a relocation plan. For those who wish assistance, options have been suggested such as moving back into the Granville once renovations are complete, moving to another City-owned building or to other appropriate housing. Tenants are being given their last month's rent to assist with moving expenses and reconnection fees. About 10 tenants have left the building, leaving about 20 tenants.
The building will continue to be managed by the City's Non-Market Operations Division. A detailed budget has been developed and the building will be operated on a break-even basis. One of the 82 suites will be occupied by a resident caretaker. There are management efficiencies with the other buildings in the area managed by the City, such as the Old Continental and the Gresham.
It is expected that the Property Endowment Fund will take ownership of the retail area, which is approximately 4200 sq.ft. and Real Estate Services will lease these out at market rents. As the property was purchased using Downtown South Development cost levies collected for low-income housing, the PEF will make a payment representing the value of the retail space. There are at least a couple of ways in which this value could be calculated. The construction costs for the retail space is estimated at $250,000, while the value in terms of capitalized rents, could be on the order of $620,000. Staff will report back on how costs should be allocated, once the retail space is tenanted and the rents are established.
CONCLUSION
Staff recommends proceeding with the renovation of the Granville Hotel at a cost of $3.9 million, including both the housing and the retail units. This will provide better quality housing and will assist in meeting the City's 1:1 replacement policy for low-income housing in Downtown South.
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