Vancouver City Council |
ADMINISTRATIVE REPORT
Date: October 19, 2004
Author/Local Yin Lee/7409
RTS No. 4580
CC File No. 4155
Meeting Date: November 4, 2004
TO:
Standing Committee on City Services and Budgets
FROM:
Director of Real Estate Services
SUBJECT:
Rent Review - Foreshore lots in Stanley Park Subleased to Vancouver Rowing Club
CONSIDERATION
A. THAT Council instruct the Director of Real Estate Services to increase the rent from $2 per annum plus taxes to $28,000 per annum plus taxes for the period September 1, 2004 to August 30, 2007;
OR
B. THAT Council instruct the Director of Real Estate Services to maintain a nominal rent of $2 per annum plus taxes and approve a grant in the form of a rent subsidy to the Vancouver Rowing Club for the period of September 1, 2004 to August 30, 2007, in the amount of $27,998 per annum, or a total of $83,994.
GENERAL MANAGER'S COMMENTS
The General Manager of Corporate Services submits the foregoing for CONSIDERATION.
COUNCIL POLICY
Rent established below market rate constitutes a grant, and as such requires eight (8) affirmative votes from Council.
PURPOSE
This report seeks instruction from Council to establish the annual rent for the two foreshore lots in Stanley Park subleased to the Vancouver Rowing Club.
BACKGROUND
The City has a 99-year lease for two foreshore lots in Stanley Park (see Appendix A) from the Federal Government which terminates on August 31, 2007. These lots have been subleased to the Vancouver Rowing Club (the `Club") since the turn of the century. Their rent had been nominal prior to the new lease approved by Council in 1988.
In January 1988, Council approved a 19-year sublease commencing on January 5, 1988 and expiring on August 30, 2007. The rent was initially set at a nominal amount of $2 per annum plus property taxes for five years to offset the costs of leasehold improvements incurred by the Club. The annual rent was to be increased to market level on September 1, 1994 and to be reviewed every five years thereafter at market rates.
The rent was reviewed in September, 1994 and subsequently in September 1999. On both occasions, at the request of the Club, staff had submitted a report to Council seeking instruction on whether to continue charging the rent at the nominal rent of $2 per annum plus property taxes or the then market rate of $23,814 per annum plus taxes. Council decided on maintaining the annual rent at a nominal rate of $2 plus property taxes.
FINANCIAL IMPLICATIONS
If Council decides on continuing the nominal rent of $2 per annum plus property
taxes, the City will forego an annual rent of approximately $28,000 per annum, or a total of $84,000 .00 for the three year term.CURRENT SITUATION
The annual rent was due for a review on September 1, 2004. Staff have established the market rent to be $28,000 per annum plus property taxes ($1,054.56 for year 2004). Upon notification, the Club verbally requested the City to continue the nominal rent of $2 per annum plus property taxes and submitted a letter (see Appendix B) to substantiate their request.
CONCLUSION
Nominal rent is considered a grant, therefore staff are submitting the request to Council for consideration and instruction.
If Council approves Recommendation A, the market rent option, Club representatives would like to appear before Council. If Council approves Recommendation B, the below market rate option, this constitutes a grant and as such requires eight (8) affirmative votes from Council.
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