ADMINISTRATIVE REPORT

                                           Date: June 24,1997
                                           Dept. File No. F828
                                           CC File: 2614-4

   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

        A.   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.

        B.   THAT the Director of Legal Services be instructed to bring
             forward a by-law to enter into the Housing Agreement.

   GENERAL MANAGER'S COMMENTS

        The General Manager of Community Services RECOMMENDS approval of A
        and B.

   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. 

   On August 1, 1996 Council adopted the following:

        THAT Council defer approval of the Housing Agreement for 932
        Granville Street recommended in the Administrative Report dated
        July 16, 1996, subject to the owner and the mortgage holders
        agreeing to priority of the Housing Agreement, and that staff
        report back if the subject condition cannot be met.

   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.

   In August 1996 Council considered a report on the housing agreement but
   deferred action noting that the agreement would not have priority with
   the mortgage holders.  During the past year staff and the applicant have
   revised the agreement and the owner has committed that the mortgage
   holders have agreed to the City s priority.

   DISCUSSION

   There has been protracted discussions between staff and the applicant on
   the terms of the housing agreement over the past two years. 

   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 July 1, 1997
        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.  
   9.   The housing agreement has priority over mortgage holders and all
        other parties having an interest.  This ensures the City's
        interest.

   Housing Agreement Limitations

   Staff have concluded an agreement which they believe meets Council
   objectives and protects the City's interests.  However there are several
   issues to note:

   1.   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 the City to appoint a receiver in the case of default. 
        Undoubtedly the City would make a serious assessment before
        initiating an arbitration.

   2.   The owner is participating in the Canada Mortgage and Housing
        Corporation (CMHC) Rooming House Rehabilitation program.  Under the
        terms, the owner receives a forgivable loan which is used to
        upgrade the rooms in exchange for  renting 65 rooms at $325 per
        month, escalating with Consumer Price Index (CPI), for 9 years
        starting January 1996. The housing agreement provides similar
        public housing benefits but is more secure in that the forgivable
        loan may be repaid at any time at the discretion of the owner.  The
        Housing Agreement also gives the City direct monitoring and
        enforcement authority. 

   Future Steps
   Following approval of this report, staff will prepare a by-law to be
   passed by Council.  Subsequently the housing agreement will be signed by
   both parties and registered.  The owner is currently undertaking the
   noise abatement.  When the work has been completed to the satisfaction
   of the Director of Environmental Health, 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 July 1, 1997) upon the Licencing Branch approving
   seating greater than 195.

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