ADMINISTRATIVE REPORT
Date: July 16, 1996
Dept. File No. F828
TO: Vancouver City Council
FROM: Manager of the Housing Centre, in consultation with
the Director of Legal Services
SUBJECT: 932 Granville Street - The Roxy Cabaret Ltd. and
Siesta Hotel Housing Agreement
RECOMMENDATION
THAT the Housing Agreement summarized in this report be approved
in principle, subject to finalization to the satisfaction of the
Director of Legal Services and the Manager of the Housing Centre,
provided that this resolution does not create any legal rights or
obligations and none arise until the agreement as authorized by
by-law is signed.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of
the foregoing.
DIRECTOR OF LEGAL SERVICES COMMENTS
The Housing Agreement does not have priority over the mortgages
on the property and there is a risk that the housing agreement
would be extinguished if foreclosure occurs. Given this, the
Director of Legal Services expresses no opinion on the
desirability of the increase in seating in return for the
agreement.
COUNCIL POLICY
On July 13, 1995, Council adopted the following motions:
THAT the Vancouver Liquor Commission endorse the application
by the Roxy Cabaret Ltd., to increase the seating to 275
seats in the Class 'C' Cabaret at 932 Granville Street,
subject to a 10-year housing agreement to the satisfaction
of the Manager of the Housing Centre and the Director of
Legal Services and the sound separation on the ceiling of
the cabaret being acceptable to the Director of
Environmental Health; and
THAT the City Clerk be instructed to not forward this
endorsement to the Liquor Control and Licensing Branch until
these conditions have been met;
THAT staff be instructed to incorporate provisions in the
Housing Agreement to provide for monitoring and to ensure
the building is maintained in a quality manner;
FURTHER THAT the Housing Agreement include provisions, to
the satisfaction of the Director of Legal Services, ensuring
that any subsequent purchaser of the hotel, within the term
of the agreement assume, in form satisfactory to the
Director of Legal Services, the obligations of the owner
pursuant to the Housing Agreement, and that the terms and
conditions of the original agreement apply to any subsequent
purchaser.
PURPOSE
This report seeks Council approval of a housing agreement for
932 Granville Street covering 64 of 75 single rooms above the street
level cabaret operation.
BACKGROUND
The Downtown South liquor license moratorium was established on
May 28, 1992. In March 1995 the owner of the Roxy Cabaret Ltd. at 932
Granville Street applied for an increase in seating from 195 seats to
a maximum of 325 seats in the Class 'C' Cabaret. This application was
not supported by staff and the applicant agreed to defer the
application prior to its consideration by the Vancouver Liquor
Commission.
After discussion with staff, the application was revised to a maximum
of 275 seats. The applicant offered to enter into a 10 year housing
agreement guaranteeing that the hotel rooms in the Siesta Hotel, above
the Roxy Cabaret, would be rented on a monthly basis at a rent
affordable for people on social assistance. The applicant also
proposed noise abatement work to mitigate the cabaret noise which is
especially disturbing to residents immediately above. In July 1995
the Vancouver Liquor Commission and City Council endorsed the
application by Roxy Cabaret Ltd. to increase the seating capacity from
195 seats to 275 seats, subject to a housing agreement and noise
abatement.
DISCUSSION
There has been protracted discussions between staff and the applicant
on the terms of the housing agreement.
Terms of the Housing Agreement
The major features of the proposed housing agreement are as follows:
1. 64 of the 75 rooms will be preserved and rented as single
occupancy rooms. The remaining 11 rooms are used for staff
and administrative purposes. If any of the 11 rooms become
available for rental, they will be single room occupancy
rooms, covered by same rent restrictions as the other rooms.
On each of the 3 floors, up to two rooms may be lost should
the owner renovate and expand the washroom facilities or
combine rooms. Otherwise City permission is needed to
reduce the number of rooms covered by the agreement.
2. Singles receiving social assistance shall have priority.
3. The rents will be $325 per month, the shelter component of
welfare, and if the shelter allowance increases, the rents
could increase commensurately.
4. Disputes will be deferred to arbitration.
5. The owner shall provide the City with monthly rent rolls on
an annual basis or at any time requested by the City.
6. The owner agrees to maintain the Siesta Rooms in a
satisfactory physical state, to conduct regular maintenance
and repairs, and to ensure that the premises are kept in
safe, neat and tidy conditions at all times.
7. The housing agreement is binding on all persons who acquire
an interest in the property.
8. The 10-year housing agreement will be retroactive to
January 1, 1996 but will not come into force until the
Liquor Control and Licencing Branch gives its approval to
more than 195 seats. However the City s consent to increase
seating from 195 to 275 will not be given until the noise
abatement work is completed to the satisfaction of the
Director of Environmental Health. The January 1, 1996 date
was selected as a compromise between the date preferred by
the applicant (July 1995) and the date preferred by staff
(when agreement comes into force).
Housing Agreement Limitations
Staff have nearly concluded an agreement which they believe meets
Council objectives and protects the City's interests. However, there
are several issues to note:
1. There is a risk that the housing agreement would be
extinguished if foreclosure occurs. The owner indicates
that the mortgage holders are not likely to grant the
housing agreement priority over their mortgages and he is
unwilling to approach them for that. If foreclosure occurs,
the extra seating capacity would continue but the housing
agreement would not.
2. The arbitration process provides some protection should a
dispute arise about the terms of the agreement. There is a
financial penalty if rents are excessive. However the
applicant was not willing for City to appoint a receiver in
the case of default. Undoubtedly the City would make a
serious assessment before initiating an arbitration.
Future Steps
Following approval of this report, staff will conclude this housing
agreement with the applicant. At that point the by-law can be passed
and the agreement registered. At any time before or after signing the
agreement, the owner can undertake the noise statement. When the
Director of Environmental Health has determined that the work has been
completed to his satisfac-tion, the City Clerk will then notify the
Liquor Control and Licensing Branch of the City's support of
additional seats. The owner's housing obligations become binding
(retroactively to January 1, 1996) upon the Licencing Branch approving
seating greater than 195.
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