POLICY REPORT REAL ESTATE Date: April 23, 1996 Dept. File No.: 108 TO: Vancouver City Council FROM: Manager of Real Estate Services and Director of Legal Services SUBJECT: Standing Authority to Execute Various Agreements RECOMMENDATION A. THAT Council authorize the Manager, Deputy Manager, or Supervisor of Negotiations of Real Estate Services to execute Licence Agreements, Month-to-Month Leases, and Offers to Lease and Leases where the total rental value is less than $250,000 and the term (including renewal options) is no more than 10 years ("Commercial Lease"); FURTHER THAT the Director of Finance be authorized to approve the material terms of the Commercial Lease. B. THAT Council authorize the Director of Legal Services to execute Statutory Right-of-Way agreements on City-owned land in favour of B.C. Hydro, where required as a condition of subdivision approval and for utility purposes only, after consultation with the General Manager of Engineering Services. C. THAT Council authorize the General Manager of Corporate Services or Director of Finance to execute Land Title Office transfer documents, in addition to the present signing officers who are the Manager of Real Estate Services, the Deputy Manager of Real Estate Services and the Supervisor of Negotiations. D. THAT Council authorize the Manager of Real Estate Services to use real estate marketing practices and commission rates, in accordance with industry standards, when leasing property on a short-term basis. GENERAL MANAGER'S COMMENTS The General Manager of Corporate Services RECOMMENDS approval of A,B,C and D. - 2 - COUNCIL POLICY Section 190 of the Vancouver Charter authorizes Council to provide for disposing of any real or personal property of the City by lease or license when in the Council's opinion such property is not required by the City, upon such terms and conditions as may be deemed expedient. The Director of Finance can approve leases and lease renewals, if the total value is less than $150,000 and the term is no more than 5 years. Regarding the City's real estate marketing practice, Council resolved in part on January 17, 1995: "...the Manager of Real Estate to use marketing practices and real estate commission rates in accordance with real estate industry standards for the sale or long-term lease of properties other than single family residential lots;.." PURPOSE The purpose of this report is to request Council approval: i) to delegate the signing authority of various routine documents to designated staff positions, and ii) to clarify that the City's current real estate marketing practices and commission rates also apply to short-term leases. DISCUSSION Presently, the Director of Finance can approve leases if the total value is less than $150,000 and the term is no longer than 5 years. While there is no direct authority, it has been the practice of the Manager of Real Estate (and formerly the Supervisor of Properties) to execute month-to-month leases and License Agreements. These precedent documents have been prepared by the Law Department. The following changes to existing authorities are proposed. 1. Lease and License Agreements (Recommendation A refers): In an attempt to standardize the City's procedures, to provide more certainty to tenants and to reduce staff time, Real Estate Services and the Law Department have been working on standardizing a number of documents which will be updated from time-to-time. A precedent document (a form of contract pre-approved by the Law Department) has been prepared for Month-to-Month leases, Offers to Lease, Commercial Leases and License Agreements. Prior to negotiating, Real Estate Services staff request Engineering and Planning clearance on the lease term and conditions. Real Estate transactions based on these precedent documents will not be prepared by the Law Department, so staff feel that it would be more efficient if the Manager, Deputy Manager or Supervisor of Negotiations of Real Estate had the authority to execute such documents. In addition, staff are seeking authority to increase the total value of the Commercial Lease from $150,000 to $250,000 to reflect today's rental market, noting that the Director of Finance would still approve all Commercial Leases. Council is requested to confirm the long standing practice of execution of License Agreements by the management staff of Real Estate Services. 2. Subdivision Requirement for Utility Statutory Right-of-Way (Recommendation B refers): There are situations where the City is required to provide a statutory right-of-way to B.C. Hydro for utility purposes on City-owned land, as a condition of subdivision approval. Currently, Council approval must be granted each time for this administrative matter. Staff request that the Director of Legal Services be authorized to execute these agreements on behalf of Council but only after consultation with the General Manager of Engineering Services. 3. Land Title Office Transfer Documents (Recommendation C refers): The Manager, Deputy Manager, or Supervisor of Negotiations of Real Estate is authorized to execute Land Title Office transfer documents. This can cause a delay in processing the documents, when all of these staff are out of the office on business. This situation occurs frequently. We therefore recommend that two additional senior staff be authorized to execute these documents; the General Manager of Corporate Services and the Director of Finance. 4. Real Estate Marketing Practice and Commission Rates (Recommendation D refers): With the exception of single family lots which are publicly tendered, Council policy is to sell or long-term lease City property using industry real estate marketing practices and at industry commission rates. Staff recommend that the previous Council resolution be clarified to explicitly include short-term leases in this policy. CONCLUSION We recommend that staff be authorized to execute the documents named in this report in light of changing market conditions, and to improve efficiency. * * * * * General Manager Report dated April 23, 1996 Date Author Anne Bancroft-Jones This report has been prepared Phone 7422 in consultation with the departments listed to the right, and they concur with its IRTS Number contents. Concurring Departments Division Head Engineering Date Director of Legal Services Date HP5-6742.COV