SUPPORTS ITEM NO. 1
   CS&B COMMITTEE AGENDA
   JULY 24, 1997

                                 POLICY REPORT
                                    FINANCE

                                           Date: July 8, 1997
                                           Dept. File: ALW06.08
                                           CC File: 4663


   TO:       Standing Committee on City Services and Budgets

   FROM:     Director of the Office of Cultural Affairs in consultation
             with the Directors of Finance, Land Use & Development and
             Legal Services, and the Manager of Real Estate Services

   SUBJECT:  Allocation Plan and Lease of a Donated Artist Studio -
             2050 Scotia Avenue (325 East 5th Avenue)


   RECOMMENDATION 

        A.   THAT Council accept the gift of an artist studio, #141, 325
             East 5th Avenue from the Aragon Group to be held as a Capital
             Asset, and on registration of  title, staff issue a municipal
             Income Tax receipt to The Aragon Group accordingly; and

        B.   THAT Council approve the lease of the City-owned artist
             studio, #141, 325 East 5th Avenue to Public Dreams Society for
             a period of ten (10) years at a nominal rate ($1), subject to
             the terms and conditions being to the satisfaction of the
             Director of Legal Services in consultation with the Director
             of the Office of Cultural Affairs.


   GENERAL MANAGERS' COMMENTS

        The General Managers of Community and Corporate Services submit A
        and B for Council's CONSIDERATION.


   COUNCIL POLICY

   Section 152 of The Vancouver Charter enables the City to accept gifts of
   property.

   In November 1993, City Council  approved Vancouver Arts Initiative
   recommendations, including recommendations that the City investigate how
   the City might assist arts organizations in securing affordable space
   including the long-term lease of City-owned properties at nominal rates.

   In May of 1993 Council  directed that City-owned properties occupied by
   non-profit organizations be held as assets in the Capital Fund, and be
   charged a nominal rental rate ($1). 

   At least eight affirmative votes are required for approval of
   below-market rental rates.

   While this space was not acquired through an amenity bonus, staff have
   been guided by Council policy with respect to encouraging the provision
   of cultural facilities in the IC-3 district, and the selection of an
   appropriate non-profit tenant.

   PURPOSE

   This report seeks Council's approval to accept the gift of a 2,600
   sq.ft. artist studio at 325 East 5th Avenue, and to allocate it to an
   appropriate non-profit arts organizations for a period of 10 years.

   BACKGROUND

   The Aragon Group has offered the gift of an artist studio in their
   development at 325 East 5th Avenue to the City of Vancouver for use by a
   non-profit cultural organization.  A letter from the donor confirming
   their intention to make this gift is attached to this report as Appendix
   "A".  

   The studio is a large (2,684 sq.ft.) ground floor unit in artist
   live/work development currently under construction at the corner of East
   5th and Scotia Avenue in the IC-3 "Brewery Creek" district. 

   DISCUSSION

   Acceptance of a Gift of Property:
   The developer, the Aragon Group have offered the studio as a gift to the
   City with the intent that it be occupied by a non-profit arts
   organization. The proposed gift is not connected to the City's zoning or
   development approvals process.  The development application was approved
   in 1995 within the permitted zoning in effect at that time.  

   It is proposed that the City accept the gift with the intention of
   sub-leasing the unit to a Council-approved non-profit arts organization. 
    The sub-lease would be reviewed periodically to ensures that the space
   continues to be occupied and operated according to the cultural policies
   of the City for the life of the building.  

   The Aragon group have requested a tax receipt for the market value of
   their gift.  Finance staff  have indicated that the donation of a strata
   lot to the City would qualify for a municipal tax receipt when title to
   the strata lot is transferred to the City free and clear of all
   financial encumbrances, and when a valuation of the strata lot is
   prepared by a certified real estate appraiser.  Should Council approve 
   Recommendation A contained in this report to accept the gift, staff will
   undertake the necessary steps to secure the unit and issue a tax receipt
   accordingly.

   Selection of Tenant:
   The donor has indicated that they wish to be involved in the selection
   of an appropriate tenant.  While staff have consulted with the donor,
   and the donor concurs with staff's recommendation, the decision with
   respect to the allocation of the unit is presented in this report for
   Council's approval.

   While the unit is not being secured as an amenity bonus, staff used the
   City's bonussing and facilities priorities policies to guide their
   recommendation.  Staff reviewed the opportunity and need within the
   neighbourhood and arts communities and developed a set of criteria to
   select a tenant for recommendation to Council.

   The permitted use of the studio is "Artist Studio" which means the use
   of the studio for the production of paintings, drawings, pottery,
   sculpture, ceramics, video, moving or still photography, creative
   writing, dance or music.  Given the large size of the unit, Council's
   direction to encourage cultural facilities in the IC-3 district, and the
   permitted use, staff determined that a non-profit organization involved
   in the production of art as defined under the Artist Studio By-law would
   be most appropriate.  This focused the selection to non-profit arts
   organizations rather than individual artists; to an arts organization
   rather than a non-profit social service or community organization; and
   to an arts organization which needs space for the production rather than
   presentation of their art. Finally, staff reviewed arts organizations
   which had a demonstrated need for studio space; had a current Mt.
   Pleasant community presence and could become a long-term resource to the
   burgeoning Brewery Creek neighbourhood.

   Based on the criteria identified above, staff recommend lease of the
   unit to the Public Dreams Society.  Best known for "Illuminaires",
   Public Dreams is a community-based arts organization with a mandate to
   create and present  art events.  The City has provided annual funding
   for the society's pubic events since 1988.  

   They are currently based in Mt. Pleasant at 2616 Main Street and perform
   throughout the City in parks ( "Courage in the Park" at Robson, John
   Henry, Douglas, Grandview Parks), streets (annual "Parade of Lost Souls"
   on Commercial Drive at Halloween) and Community Centres (annual
   "Illuminaires" event at Trout Lake).   They have  located their
   production, workshop and storage facilities through the City as large,
   free-span space can be found and afforded.

   Public Dreams have a long and successful track record of community
   collaboration and offer opportunities for both professional and
   community-based artists.  The society needs stable, long-term space
   within an east-side community.  This space will enable them to
   centralize their operations, create the large scale sculpture, puppets,
   banners and art which they use in their pageants and events, and provide
   opportunities for creative workshops in the space.  

   Term:
   Staff propose a ten-year lease to the society, at a nominal rate ($1)
   the terms and conditions to be to the satisfaction of the City's
   Directors of Legal Services and Office of Cultural affairs.  A ten year
   term is recommended as the space is shell-only, and the 

   Society will need to raise funds to finish and equip the space.  
   Community Access:
   Staff will be  recommending that one of the conditions of their lease,
   will be that the society agree to provide a reasonable number of hours
   per week of access to the studio to other neighbourhood non-profit
   groups for meetings and events as appropriate under the zoning.

   FINANCIAL IMPLICATIONS

   Real estate staff estimate the cost to transfer the strata unit from
   Aragon to the City at $50. 

   Under the lease agreement with the society, the City will transfer
   ongoing operating expenses (strata fees, repairs and maintenance,
   insurance, etc.) to the society.   As well, the society would be
   responsible for any fit-up or finishing costs associated with occupying
   the studio.

   CONCLUSION

   Staff recommend that Council accept the donation of the unit and direct
   staff to enter into a lease agreement with Public Dreams Society for
   occupancy on completion of the development, to the satisfaction of the
   Directors of Legal Services and the Office of Cultural Affairs.


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   APPENDIX A on file in the City Clerk's Office