ADMINISTRATIVE REPORT

                                           Date: February 4, 1997
                                           Dept. File No. F621

   TO:            Vancouver City Council

   FROM:          Manager of the Housing Centre

   SUBJECT:       Lease Terms for 20 West Hastings Street 


        THAT Council approve a lease for the New Portland Hotel project
        (Lot K, BLK. 29 DL 541 Group 1, Plan LMP22692) at 20 West Hastings
        Street to the Portland Hotel Society on the following terms and

   1.   a term of 60 years;

   2.   at a prepaid lease rent of $356,250, due and payable on or before
        90 days from issuance of occupancy permit;

   3.   commencement date being the earlier of the date of signing of the
        lease by all parties or 120 days from the date of Council approval
        of the lease terms;

   4.   the City may cancel the lease if construction has not commenced
        within 12 months of the date of commencement of the lease; 

   5.   permitted uses in this non-market project include sleeping rooms
        with bathrooms, administration offices, communal kitchens, lounges,
        residential amenities, and a cafeteria which may be available to
        the public as well as the residents; 

   6.   occupancy shall be restricted to core need, hard-to-house singles
        and couples, with priority to persons or couples where at least one
        person has a serious mental, health, substance abuse problem, or
        other similar problem; and

   7.   Such further and other terms as are acceptable to the Manager of
        the Housing Centre and the Director of Legal Services, it being
        noted that no legal obligation shall arise until execution of the

                                     - 2 -


        The General Manager of Community Services RECOMMENDS approval of
        the foregoing.


   It is City policy to purchase privately-owned land for non-market
   housing development and lease it to non-profit sponsors for 60 years at
   a prepaid rent, equal to 75% of market value.

   It is also Council policy to maintain and expand housing opportunities
   for low and moderate income households.

   The City provides grants for non-market housing projects through the
   Affordable Housing Fund where conditions require a grant to ensure
   project viability.   


   This report seeks Council s approval of proposed lease terms for the
   non-market housing project at 20 West Hastings Street (see Appendix A).


   At its November 5, 1996 meeting, Council approved a $300,000 reduction
   in the prepaid lease rent for the 72-unit New Portland Hotel project at
   20 West Hastings via a grant from the Affordable Housing Fund. The grant
   was approved to compensate for both the presence of an underground
   basement on the site and a property encroachment to the west. The City
   had acquired this site in 1994 for $875,000 for a non-market housing
   development for Downtown Eastside single men and women having mental,
   health and/or substance abuse problems.

   The normal lease value, at 75% of market value, would be $656,250.  The
   lease will be drafted using the BCHMC approved standard lease charge
   terms, varied as herein set out.  The lease must be signed within 120
   days following Council approval not the normal 90-day period, because of
   multiple funding sources that need to be co-ordinated and a customized
   operating agreement needs to be prepared.

   Receipt of the grant was conditional upon BC Housing agreeing to:

   1)   a prepaid lease amount of $356,250,
   2)   granting of an additional 14 more units for this project for a
        total of 86 studio and
        one-bed units and,
   3)   their acceptance that the City s share of the purchase price for
        the Coal Harbour Co-op would be determined by the social housing
        agreement between the City and Marathon Realty.

   All three conditions have now been satisfied and the lease for the
   project should now be prepared.   


   A Development Permit was approved July 1996 for 72 units. Conditional
   approval for development of the additional 14 units, resulting in two
   extra floors, has been received and a revised Development Application
   will be submitted shortly.  Construction start is slated for June 1997.

                           *     *     *     *     *