Rent Review - False Creek Residential Leasehold VR691

A. THAT, as the ground lease for the strata development commonly referred to as VR691 (“VR691”) provides that on the thirtieth (30th) anniversary of the ground lease the annual ground rent will be re-set at market rental value, Council authorize the Director of Real Estate Services to provide notice to each individual residential lessee in VR691 that the new monthly rent for his or her strata lot will be as set out in Appendix B of the Administrative Report dated March 23, 2010, entitled “Rent Review – False Creek Residential Leasehold VR691” effective February 7, 2010, (the 30th anniversary of the ground lease) for the following ten (10) year period, provided that for the period from February 7, 2010 to December 31, 2010 each individual residential lessee may continue to pay only the existing monthly rent, as set out in Appendix B, as provided in the Administrative Report.

B. THAT Council authorize the release to the chairperson of the strata council for VR691 of the appraisal report dated October 22, 2009 prepared by Grover, Elliott & Co. Ltd. (the “VR691 Appraisal”), which is the basis for the new annual ground rent for VR691.

C. THAT the Director of Real Estate Services advise each individual residential lessee in VR691 who pays monthly rent that the City remains prepared to consider counter proposals (“Counter Proposals”) received on or before May 1, 2010, to revise the amount of the new annual ground rent as proposed by the City based on the research, data, and analyses as utilized and set out in the VR691 Appraisal, provided such Counter Proposals are based on errors or omissions in the appraisal reports as determined in accordance with the Canadian Uniform Standards of Professional Practice of the Appraisal Institute of Canada.

D. THAT the City Manager, Director of Legal Services, and Director of Real Estate Services be authorized to negotiate a revision to the new annual ground rent based on any valid Counter Proposal with either an individual lessee or the strata corporation for VR691 until September 1, 2010 (the “Counter Proposal Period”).

E. THAT, failing agreement by the City on or before the end of the Counter Proposal Period to a revision to the new annual ground rent pursuant to negotiations arising from a Counter Proposal, the Director of Real Estate Services advise each individual residential lessee in VR691 who pays monthly rent and has not accepted the new annual ground rent proposed by the City that, at the option of such individual residential lessee in VR691, the City will:

i. proceed to arbitration to settle the amount of the new annual ground rent in accordance with the rent review provisions set out in the VR691 ground lease; or

ii. apply the results of the binding settlement resulting from the 2006 VR arbitration (the “2006 VR Arbitration”) to such VR691 strata unit.

F. THAT, if an individual residential lessee opts to proceed to arbitration pursuant to E (i) above, the Director of Legal Services be authorized to continue the appointment of Mr. Dennis Parkhill of Kent-Macpherson Appraisers Ltd. or, failing the continuing appointment of Mr. Parkhill, an alternate considered acceptable to the Director of Legal Services as the City's choice for arbitrator for the rent review arbitration for VR691.

G. THAT, in order to obtain the ruling from the 2006 VR Arbitration prior to requiring that a residential lessee decide whether to participate in the prepayment program offered by the City (the “Prepayment Program”), which ruling is anticipated to be made on or before November 30, 2010:

i. the date for application of the 1.08% monthly interest adjustment factor to the prepayment amount (the “Prepayment Amount”)payable pursuant to the Prepayment Program be extended from June 1, 2010 to December 31, 2010, for the Section I Rent Review Lessees and the Section II Rent Review Lessees with a 2010 Rent Review Date (all as defined in Council Report RTS8343); and

ii. only the existing monthly rent be charged from June 1, 2010 to December 31, 2010 for all Section I Rent Review Lessees and all Section II Rent Review Lessees with a 2010 Rent Review Date.

H. THAT, if any leaseholder or its successor eligible to prepay ground rent pursuant to the Prepayment Program does not prepay by December 31, 2010, but subsequently prepays prior to the expiry of the Prepayment Program on December 31, 2012, the increase in the monthly rent as a result of the 2006 VR Arbitration (which is effective as of May 1, 2007) paid by such leaseholder until the date of prepayment under the Prepayment Program be credited back to such leaseholder without interest.

I. THAT once the 2006 VR Arbitration is completed, Council waive interest on 2006 VR Back Rent as required by the applicable strata lot lease for each Section I Rent Review Lessee for the period from May 1, 2007, to June 1, 2010.

The relevant report remains sensitive and cannot be released.

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Where these brackets [ … ] appear, information remains sensitive and cannot be released.