SUPPORTS ITEM NO. 2
   P&E COMMITTEE AGENDA
   JULY 31, 1997

                                 POLICY REPORT
                                Urban Structure

                                      Date: July 21, 1997
                                      Dept. File No.  IS
                                      C.C. File No.: 5053

   TO:       Standing Committee of Planning and Environment

   FROM:     Director of Central Area Planning, in consultation with
             Manager of the Housing Centre, Director of Social Planning and
             General Manager of Engineering Services

   SUBJECT:  Planning Principles and Concept Plan for Mole Hill


   RECOMMENDATION

        A.   THAT the principles for the development of Mole Hill put
             forward by staff, as set out in Appendix B, be endorsed by
             Council;

        B.   THAT the Concept Plan based on staff's principles as shown on
             Appendix B page 3, be adopted by Council as the basis for the
             next phase of planning;

        C.   THAT the adoption of A and B above, constitute the end of
             Phase I of the planning of Mole Hill and that Phase II
             commence immediately, involving the Mole Hill Working Group
             and the general public in further refining the plan and
             implementation strategies;

        D.   THAT funding for Phase II of Mole Hill planning, in the amount
             of $50,000 as described in this report be approved;

             FURTHER THAT the 1997 portion of this, in the amount of
             $25,000, come from Contingency Reserve Fund and the balance be
             included in the 1998 departmental operating budget; and

        E.   THAT to expedite the first phase of the Mole Hill childcare
             development already approved by Council (i.e. the new
             construction of a childcare facility and an infill family
             dwelling unit suitable for licensed family childcare) being
             undertaken by the B.C. Wood Specialities Group, and to extend
             the useful life of the existing two adjacent houses, Council
             authorize the Manager of Real Estate and Director of Facility
             Development in consultation with staff from Heritage Planning
             to proceed with required service and life safety building
             upgrade work, basic maintenance, and minor heritage
             "revealing" work to the exteriors of the existing houses at
             1129 and 1137 Pendrell; 

             FURTHER THAT Council direct staff to work with B.C. Wood
             Specialities Group to explore sources for donated materials
             which will facilitate the current and future exterior heritage
             work in Mole Hill; and

        F.   THAT Engineering and Planning staff report back on the
             treatment of the public lane, taking into consideration infill
             sites, services, pedestrian use, and vehicular access.

   GENERAL MANAGER'S COMMENTS

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

   COUNCIL POLICY

   -    On April 2, 1996, Council adopted a number of resolutions to guide
        the planning of Mole Hill. A commitment was made to retaining the
        land and the heritage listed buildings as well as accommodating all
        existing residents on site. While priority was to be given to low
        end of market rental, the City's policy for mixed-use communities
        was to be maintained. Options for public facilities as well as
        CityPlan policies for infill and new forms of housing, were also to
        be considered.  The complete list of Council s resolutions is
        included as Appendix A.

   -    On May 26, 1997 Council reserved the site at Comox and Thurlow for
        the Dr. Peter Centre.

   -    On June 3, 1997 Council reserved the sites as 1129, 1133, and 1137
        Pendrell Street for Child care and Family Daycare.

   SUMMARY

   Following Council's decisions on Mole Hill in the Spring of 1996, staff
   set up a Working Group to develop a concept plan for the block.  The
   group included a broad base of heritage and community organizations
   which had long been involved in the Mole Hill process. All members
   volunteered their time and made a substantial commitment  and effort in
   identifying principles and developing the Working Group Option. This
   report presents the results of Phase I of the planning program.

   Areas of agreement between staff and the Working Group include: 
   reserving sites for the Dr. Peter Centre; reserving sites for daycare
   facilities (53 total spaces); maintaining all listed heritage houses on
   their sites; narrowing the paving and creating a pedestrian environment
   in the lane; developing community and heritage gardens; developing
   criteria for considering demolition of building additions; agreement on
   the notion of minimizing parking; and agreement on maintaining the
   existing tenants on-site, including the option of moving off during
   renovation and returning to an upgraded unit.

   There have also been some areas of differing viewpoints, which have
   resulted in different principles for development and concept plans put
   forward in this report by the Working Group and staff respectively. 
   Staff principles are included in Appendix B, with the Working Group
   principles included in Appendix C.

   With the exception of implementing the agreements above, the Working
   Group would like to limit physical change at this time. In their concept
   plan (illustrated in Appendix C page 6), they propose to retain all of
   the existing houses, and reserve all the 165 existing units for
   affordable rental. They believe that this block represents a heritage
   resource and a supply of affordable housing which must be preserved.  In
   the context of the West End, they feel that affordable rental housing is
   important in maintaining a mixed community.  They are not prepared to
   consider infill at this time or on-site parking, preferring instead to
   reclaim and reserve the majority of the yards for public use in heritage
   and community gardens.  Renovations would be limited to the ongoing
   maintenance with incremental housing upgrades, as more units are rented
   and the revenue stream increases.  If existing rents are maintained as
   supported by the Working Group, the period of renovation could extend to
   over 20 years.  On this basis, however, the Working Group feels their
   plan would break even. If we were to pursue an accelerated period of
   renovation with low-end-of-market rents for new tenants as proposed by
   staff, this option would lose about $4.0 million.

   Staff's Concept Plan (illustrated in Appendix B, page 3) is not
   substantially different in terms of the physical layout from the Working
   Group s. In accordance with Council s direction, we have given priority
   to low-end-of-market rental by setting aside at least 96 units for
   existing and new tenants. In addition, to respond to the goals of
   CityPlan for mixed communities, we have increased both housing diversity
   and tenure to accommodate middle and upper income earners, including
   families with children. Given that all units are ground-oriented and
   adjacent to a park and a school with daycare in the Block, we feel that
   we can do much better than the 12% of the units that are currently
   suitable for families with children.

   Staff's plan also permits limited demolition of 2 non-listed houses and
   demolition of some building additions, which have deteriorated to the
   point where necessary upgrades are economically unfeasible or are not
   technically possible under today s building code. In these locations,
   sensitive infill can achieve non-market and family objectives.

   Most importantly, staff recommend a level of renovation to preserve and
   enhance this heritage resource. Upgrades to the basics including wiring,
   plumbing, heating, foundation, interiors, and exteriors are needed to
   provide safe, decent accommodation. This needs to happen soon, given the
   potential risks.  Staff's plan would see all renovations occur within 5
   years, controlled by design guidelines to be developed in the next phase
   of planning. This option would result in a return of about $4.0 million.

   A third option (illustrated in Appendix D) is put forward for Council's
   information and demonstrates a maximum return from the site, estimated
   at about $7.0 million, while still responding to Council's resolutions
   and staff's principles.  This option is not supported by staff due to
   the loss of four additional houses, the movement of a C listed house,
   the reduction of community/heritage garden space, and the limited
   housing diversity for existing tenants.

   The estimates for all options do not include consideration of the
   unencumbered land value of approximately $18.0 million.

   All three options are well below the development potential of the
   existing zoning of 2.75 FSR, ranging from about 1.0-1.2 FSR.  Regardless
   of which option Council decides to pursue, staff recommend the creation
   of a heritage density bank. This could be done as a rezoning defined in
   the next phase.  As this bank would be quite substantial, it should be
   held in reserve at this time, so as not to flood the market and
   potentially jeopardize other current heritage initiatives. The value of
   the heritage density bonus could range from $6.0 - $8.0 million if sold
   over time without market saturation.

   To complete the next stage of planning which will take approximately a
   year, a budget of $50,000 is required, and the funds are recommended
   from contingency reserve and 1998 departmental budgets. 

   PURPOSE

   This report provides a summary of the Mole Hill planning process to
   date, including development principles and concept plans generated by
   both the Mole Hill Working Group and by City staff. Council is asked to
   adopt staff's principles and concept plan as completion of phase I of
   the planning process and as a basis for the next stage.

   BACKGROUND

   The City of Vancouver owns 3.30 acres of land in Mole Hill, which is
   presently zoned RM-5B. If assembled into developable sites, the Manager
   of Real Estate estimates the current market value of the unencumbered
   land to be approximately $18 million. The sites were purchased between
   the 1950s and early 1980s for park space. The opportunity cost of the
   actual purchase prices of the individual lots as of 1996 is
   approximately $15 million. In other words, if the City had either
   invested the purchase price of each individual lot at the time of
   purchase or not borrowed the money to make the purchase, the City would
   now have about $15 million.

   Shortly after Council adopted the initial development principles in
   1996, work began on a community based planning process. A working group
   was set up representing 13 community organizations, including private
   property owners and tenants. Six staff members were also assigned on a
   part-time basis to coordinate the group and provide information and
   advice. Staff did not vote on the working group's motions and reserved
   the right to present a different position to Council.

   The Working Group has met almost 20 times to consider issues related to
   the block. Information has been gathered and presented to the group
   describing the size and condition of the existing houses, a profile of
   the existing tenants, and a consultant's report outlining options for
   daycare. The Working Group adopted a number of principles to guide the
   development of the site, and based on these principles, has put together
   a concept plan.  Staff have also proposed principles for development and
   a concept plan for the block.


   DISCUSSION

   Existing Site Development and Context

   The block designated as Mole Hill is bounded by Comox Street, Thurlow
   Street, Pendrell Street, and Bute Street. The site RM-5B zoning permits
   a maximum floor space ratio (FSR) of 2.75. The existing scale of
   development on the City-owned property is well below that, with most
   sites containing 3,000 - 4,000 sq. ft. houses at about 0.8 FSR. The
   exception is the Strathmore, a privately owned apartment building at the
   corner of Bute and Comox, which at 6 storeys contains 99 units at about
   5.0 FSR.

   The City owns a majority of the block, including 28 houses, 1 temporary
   daycare facility, and the vacant sites at 1132 Comox Street and on the
   corner of Comox and Thurlow Streets. Of the 28 houses, 20 are listed on
   the Heritage Register. Although the 8 remaining non-listed houses were
   built at approximately the same time, modifications to the exteriors,
   including building additions, have compromised the heritage merit. Only
   the Watson House on Pendrell Street has been fully renovated and it is
   currently being used as a Special Needs Residential Facility. The site
   plan below illustrates building locations, ownership, and whether the
   building is listed on the Heritage Register.

   Figure 1. Site Plan - Existing Situation

   Areas of Agreement Between Staff and the Working Group

   Summary

       location for Dr. Peter and the YMCA Daycare facilities;
       maintaining heritage listed houses on their current site;
       consideration of demolition of substandard building additions;
       creating a pedestrian environment in the lane;
       minimizing parking by removing rear yard rental parking;
       preserving open space in the rear yards, including space for 
        community gardens;
       developing heritage gardens;
       maintaining existing tenants, including an option to relocate
        off-site during renovations; and
       banking heritage density.

   Since last summer, the Working Group and staff have achieved consensus
   on a number of significant items. Two facilities, both represented by
   members on the Working Group, have been located on the block. A site for
   the Dr. Peter Centre has been reserved on the vacant lot at Comox and
   Thurlow Streets, as well as the rear portions of the two lots to the
   west. The replacement of the existing childcare centre and the addition
   of 28 new family childcare spaces have been accommodated in an
   innovative way, making use of the current location at 1133 Pendrell, as
   well as the existing homes and rear yards at 1129 Pendrell and 1137
   Pendrell. The project can be achieved in two phases through construction
   of a new custom designed childcare facility (25 spaces) and a new 3
   bedroom infill home suitable for 7 spaces of licensed family childcare.
   The second phase would be the conversion of the two existing houses into
   five dwelling units, three of which would be suitable for 7 licensed
   family childcare spaces each. With the support of the Working Group,
   both Dr. Peter and Phase I of the childcare facilities have been
   expedited, reported, and approved separately by Council.

   With respect to the childcare facility, Council also approved a proposal
   from the B.C. Wood Specialties Group to construct the new facility and
   infill home, in return for use of these buildings for a two year period
   as a display centre for wood value added products. As part of this first
   phase, 1129, 1133, and 1137 Pendrell must be consolidated into one
   parcel to meet zoning requirements. The existing houses must be upgraded
   to meet certain life safety Building-Bylaw requirements, including
   sprinklering. It also makes sense to proceed concurrently with some
   minor heritage and maintenance work which includes revealing the
   original wood siding, possible re-roofing with non-combustible wood
   shingles to be donated through the B.C. Wood Specialities Group, and
   rebuilding of the porches if required. The Manager of Real Estate has
   advised that this work is within the regular scope of what is necessary
   to extend the useful life of these houses, but that the immediacy of the
   timelines for the B.C. Wood Specialities Group project is simply
   accelerating the timeframe for the work. Council is therefore asked to
   endorse expediting this work in recommendation "E". The conversion of
   the existing houses (Phase II of the childcare development) will not
   proceed until a plan for tenant relocation is in place and the funding
   for work related to making the units suitable for licensed family
   childcare is secured.

   Possibly the most significant area of agreement is on maintaining
   heritage listed houses on their current sites, with the possibility of
   only minor movement on their lots. We have also both agreed to consider
   demolition of building additions, if they are unable to provide safe and
   adequate accommodation, they do not enhance the original heritage
   character, and it is too expensive to renovate and/or  not possible to
   upgrade to code.

   We have reached consensus on the concept of creating a more comfortable
   pedestrian environment in the lane, with the detailed design to be
   completed in the next phase. The working group recommended a reduction
   in the width of the lane dedication. A narrowed lane dedication would
   increase the ability of the sites to accommodate infill, such as coach
   houses, Dr. Peter, and the daycare, in addition to increasing usable
   open space. There are, however, concerns about location and access to
   utilities and the sharing of the lane with service vehicles and
   pedestrians which may require the full existing lane dedication. Staff   support narrowing the paved portion of the lane for vehicular travel and
   providing space for pedestrian walks and utility access behind the paved
   portion. The design of the lane and its resultant lane dedication width
   will be the subject of a report back to Council as suggested in
   recommendation F.

   Staff and the Working Group also agree on the notion of minimizing
   parking requirements. While adequate parking would be provided for Dr.
   Peter, Watson House, and the daycare, staff and the Working Group would
   like to see the rear yard rental parking removed in order to maximize
   open space and minimize lane traffic. Existing resident permit parking
   (approximately 12 spaces) would be retained.

   No decisions have been made on specific traffic calming and greenway
   designs as they will be addressed in the next phase of planning. It was
   agreed however, that overhead wiring would not be undergrounded because
   of the cost (approximately $550,000) and because of its historical
   character. Money has been set aside in existing capital budgets for
   necessary upgrades to existing sewer lines in the lane. Approximately
   $400,000 for special lane treatments and Comox Street greenway
   development have been allocated in the Staff and Working Group Options,
   but not in the High Return Option.

   Both staff and the Working Group feel that the plan should increase the
   open space currently available to residents and the public by preserving
   a significant amount of the rear yards as heritage gardens (showcasing
   heritage plantings and landscape designs that have historical
   connections to the block) and community gardens.  Reducing rear yard
   rental parking will help to achieve this goal.

   Finally, in accordance with Council's resolution to accommodate existing
   tenants on-site as renovations proceed, both staff and the Working Group
   agree that tenants should be given the choice to move off-site during
   renovations with the option to move back upon completion.

   As all options are well below the development potential for the existing
   density, there is an opportunity to create a heritage density bank
   on-site. This would be done as part of the next phase of planning and be
   secured through rezoning and heritage agreements. As the amount is quite
   substantial, representing $6-8 million in todays dollars, it is
   recommended that once created, it be held in reserve until the heritage
   density already banked is used up. Even then, we may want to release
   density incrementally so as not to jeopardize other heritage
   initiatives.  The creation of a bank is strongly supported by both staff
   and the Working Group.

   Areas of Different Viewpoints

   Summary

       diversity in housing types and tenure;
       the social and economic mix, including housing for families;
       possible demolition of some non-listed houses;
       consideration of residential infill;
       level of renovations;
       pace of renovation; and
       provision of parking

   Differing viewpoints mainly centre around the Council resolutions of
   April 2, 1996 which were adopted to guide the planning process. These
   resolutions included direction that the City's existing policy of mixed
   communities would be maintained, giving a priority to housing for
   low-end-of-market rental. 

   The Working Group has passed a motion that would designate all of the
   City's housing in Mole Hill as "affordable rental". This is defined by
   the Working Group to mean rental housing similar to the existing unit
   mix on the block and suitable for the current tenant income levels, and
   results in a combination of suites rented at $1.00/sq.ft. to existing
   tenants and $1.25/sq.ft. to new tenants. In the context of the City, the
   Working Group feels that affordable rental housing in heritage houses is
   a resource which should be preserved.  In the context of the West End,
   they believe affordable housing in Mole Hill is vital to maintaining a
   healthy mixed community.  Staff, on the other hand, believe that Council
   intended a social and economic mix on the block, noting that
   historically the block has had a mix of people. As well, there are only
   about 20 units now that are suitable for families out of 165 units of
   City-owned housing. Noting the 25% target in major projects, staff feel
   that we should do better than 12% in Mole Hill.

   To achieve income and social mixes, including family housing, staff
   propose to increase housing diversity and tenures on the block.
   Respecting Council's commitment to the residents and to giving a
   priority to low-end-of-market housing, staff believe that at least 96
   units (reflecting the total number of residents as of the April 19, 1996
   meeting) should be maintained for low-income and low-end-of-market
   rental. This represents the majority of units and would accommodate all
   of the 82 tenants now on site in upgraded accommodation and at rental
   rates suitable to their incomes.

   In staff's option, two non-listed houses could be demolished for infill
   sites and 13 houses would be leased for 99 years for single-family or
   multiple conversion use with an appropriate standard of renovation
   required in the leases.  Where access can be achieved from the adjacent
   streets, these leased houses would have the potential for "coach house"
   or side-yard style infill. All of these houses plus the Child Care
   Facility houses would provide units suitable for families. This results
   in 26% of the units being suitable for families in staff's option,
   compared to 14% in the Working Group's option.

   The possible demolition of the non-listed houses is an issue. The
   Working Group would like to see all houses on the block retained.  While
   recognizing this is a worthwhile goal, staff feel that it may be
   necessary to move or demolish some houses because of extremely high
   costs of renovation, the inability to upgrade to building code, and the
   inability to provide acceptable living accommodation.  This includes a
   non-listed house and additions at 1157 Pendrell and 1154 Comox, as well
   as the additions at 1147 Pendrell. The accommodation in these buildings
   is substandard. They are limited by the layout, and either cannot be
   brought up to code, and/or would be approximately twice the average cost
   of renovation to achieve acceptable livability standards. The staff
   option will keep the non-listed house at 1147 Pendrell, even though the
   cost is slightly higher, as it was one of the grandest houses on the
   block and could be once again. It is substantially intact and has a
   functional internal layout for small units.  It would be separated from
   a small addition and moved to the east side of the site with new
   buildings added to provide small self contained units. There is an
   opportunity to pursue non-market funding and Housing staff believe that
   considering proposed changes to the unit allocation levels and our
   ownership of the land, we stand a good chance of securing funding. The
   new construction would be in scale with the existing houses. As well,
   additional care would be taken in drafting guidelines for the site to
   ensure both sensitivity and compatibility of design.

   The level of renovation has also been an issue. The Working Group would
   prefer a minimal level of on-going renovation in order to decrease
   costs, maintain existing rents, and limit the economic  justification
   for change. Staff feel that there is a need to provide a standard of
   housing that is both acceptable to the tenants and efficiently preserves
   and enhances the resource of the houses on Mole Hill, including
   important heritage features. This means basic repairs to bring the
   buildings up to code (or equivalencies) and restoring the houses to a
   level where only minor maintenance will preserve these structures for
   the next 30+ years. These are not full "heritage level" restorations,
   but rather exterior repairs and seismic upgrading, as well as new
   wiring, heating, gyproc, flooring, plumbing, and sprinklers. The new
   walls and plumbing would provide an opportunity to enlarge and add
   bathrooms to most of the smaller units. This was strongly supported by
   the tenants at their meeting last year and in a recent tenants survey. 
   Original materials will be restored if possible, or new materials will
   be compatible with the heritage character. Based on the current work to
   reveal the original siding on 1129 Pendrell, it is important in the
   future that we fully identify what is there before proceeding with
   renovations. Costs for this type of renovation/restoration are around
   $110/sq. ft. A lessor cost option for renovation of $65/sq. ft. which
   was discussed with the Working Group is not recommended, as it would
   preserve the houses for a shorter period and would not be as sympathetic
   to heritage features. For comparison purposes, both options are listed
   in Appendix E.

   While staff agree with parking relaxations in accordance with the
   provisions of our Parking By-law, we do not support eliminating it for
   the residential units entirely as recommended by the Working Group. At
   present, 10% of the tenants use rear yard rental parking. In both the
   staff and high return options, facilities, non-market, market, and
   condominium developments would provide underground parking as required
   by the by-law. With heritage relaxations, we could reduce the parking
   requirements on-site and still achieve the goal of having a significant
   amount of the rear yards for open space. The summary table in Appendix E
   projects a supply of 66 parking spaces under the staff option. This is
   conservatively expected to be 30 spaces short of the demand. However,
   this deficiency may encourage reduced care ownership, thereby reducing
   the shortfall somewhat.

   The last major area at issue centres around the phasing-in period for
   renovation and redevelopment in the block. The Working Group would like
   to see the renovation done incrementally over time, paid for by revenue
   generated from rental income. To that end, they would like to see an
   increase in the units rented. While renting some of these units would be
   possible, staff note that the vacant units allow existing tenants to be
   moved easily during renovations.  Staff also feel that extending the
   renovation period over a significant number of years will result in
   increased maintenance costs, increased "eventual" renovation costs, and
   decreased rental revenue over that period of time. There is also an
   increasing danger to life safety and house fires, given the condition of
   the wiring.  In addition, many tenants are anxious to see renovations
   completed so that they can enjoy upgraded living accommodation.

   Concept Plan Options

   Over the past 3 to 4 months, a number of concept plan options have been
   reviewed by both staff and the Working Group. Consultants have been
   hired to test and illustrate these concept plans and preliminary
   economic analysis has been undertaken to compare in order of magnitude
   the approximate returns which might be possible from the options. None
   of the economic returns include the unencumbered land value of $18
   million. No cash flow analysis has been done to take into account the
   cost of borrowing money or holding properties while awaiting
   redevelopment, or the different tax revenues which would be generated
   from each option. Analysis of all options assumes that the City will
   receive $900,000 for the prepayment of the lease for the Dr. Peter
   Centre site. Based upon the parameters outlined above, the following
   options have been analysed, as summarized in Appendix E.

   1.   Working Group Option (see principles and plans in Appendix C)

   Based on principles adopted over the last year, the Working Group
   supports an option which locates the Dr. Peter Centre and a new daycare
   facility, retains all houses, and renovates the 165 existing units as
   "affordable rental" housing. Other than the facilities, they do not
   support any infill at this time or any parking other than that for the
   facilities and private owners. Instead, they prefer to reserve the rear
   yards for public open space, including both heritage and community
   gardens.  At their own initiative, the Mole Hill Living Heritage Society
   (represented on  the Working Group) has secured funding from the
   Bronfman Foundation to pursue development of both heritage and community
   gardens.

   The Working Group would prefer to see renovations initially limited to
   exterior maintenance and internal repair as required.  More
   comprehensive upgrading such as bathrooms would be undertaken as the
   cash flow allows, possibly taking over 20 years.  While this option does
   not initially cost more than the site generates, it does not provide
   improved living conditions in a timely manner, it will result in higher
   management costs, and renovation costs will rise as the houses continue
   to deteriorate over this extended period of time.  To complete
   renovations in a timely manner to a level supported by staff, money
   would have to be borrowed from the Property Endowment Fund.  If this was
   done, it is estimated that it could result in a negative return of about
   $4.0 million at the rental rates described for affordable rental
   housing. Possible revenue from outside groups and facilities who are
   prepared to take a house and pay for renovations could decrease this
   loss.

   If the lower renovation cost of $65/sq.ft. is used along with lower
   rental rates, it is estimated that it would result in a negative return
   in the order of $2 million.  However, as noted earlier, this is not
   based on a cash flow analysis and the actual costs to the City would be
   greater.

   2.   Staff Option (see principles and plans in Appendix B)

   Rather than invent an entirely new option, staff have tried to build on
   the strengths of the Working Group's principles and concept.  Dr. Peter
   and daycare facilities remain the same and instead of adding a lot of
   new development, social and economic diversity have been increased by
   providing more diversity in unit types and tenure. Residential infill is
   limited in scale and scope, recognizing shared objectives for open
   space. The option is based on principles which incorporate Council's
   previous resolutions as well as information learned through the process.

   Rather than having all of the 165 existing units as "affordable rental"
   as the Working Group suggests, approximately 100 could be reserved for
   low-income and low-end-of-market rental. The remainder would be a
   combination of single family houses for long term lease,  infill
   housing, and multiple conversion dwellings, all at market rates. Over
   25% of all units would be suitably sized for families.  In the end, a
   balance is achieved with approximately   of the housing for low-income
   rental,   for low-end-of-market, and   for market housing. The majority
   of the houses are maintained on their lots, with only two of the
   non-listed houses demolished. One of these houses (at 1157 Pendrell in
   conjunction with a relocation of 1147 Pendrell) would provide a site for
   non-market housing.  Approximately 50 small, self-contained units on
   these and nearby sites would provide much improved accommodation for
   current residents on fixed incomes, at a scale and design which would be
   sympathetic to existing houses. 
   A central area is set aside for community gardens and is directly linked
   to Nelson Park. Parking is provided for facilities and market housing,
   with parking provided for low-income and low-end-of-market housing at
   reduced requirements as allowed by the Parking By-Law. Heritage and
   community gardens would be accommodated in existing on-site open space,
   which would be minimally impacted by the possible addition of up to 10
   infill houses. All renovations take place within the next five years and
   this option will result in a return of approximately $4.0 million.

   3.   High Return Option (see plans in Appendix D)

   An option that seeks to maximize the  return has been developed by staff
   to demonstrate what can be achieved within the Council resolutions. 
   Again, Dr. Peter and daycare facilities remain the same, with as many of
   the houses as possible leased for 99 years and with the potential for
   coach house infill.  Additional market housing is accomplished by
   redeveloping the 1147-1157 Pendrell sites with condominium units in a
   two and one-half storey building. Houses at the Thurlow and Pendrell
   corner are moved or demolished to make way for a non-market three and
   one half storey building. Two houses on Bute Street, and two houses on
   Comox Street are used to provide affordable rental renovations. In this
   option, four houses are demolished, 2 or 3 additions are removed, and
   all of the buildings at 1147 and 1157 Pendrell Street are demolished.
   This option can be completed in 2 or 3 years. The approximate return of
   this option has been estimated at about $7.0 million.

   This option produces the most revenue, keeps the ongoing management of
   the houses to a minimum, and reduces the risk of cost over-runs during
   upgrading by keeping to a minimum the number of houses upgraded and
   managed by the City. It also produces 62 new studio units that can be
   rented at the shelter allowance, allows for heritage or community
   gardens along the greenlink and behind the Watson House, and can be
   completed quickly. However, this option is not recommended as it
   demolishes up to 4 more unlisted houses than the staff option, moves one
    C  house, provides less space for heritage and community gardens,
   provides no pedestrian/greenway treatments, dramatically changes the
   character of the units for existing tenants and does not provide a good
   diversity of housing types or locations for those tenants.  The three
   and one half storey studio apartment building on the corner of Thurlow
   and Pendrell is a concern given the scale of the adjacent houses, but
   with its location on Thurlow, it may be justified as a bookend to the
   block.

   Vancouver Heritage Commission Comments

   The Heritage Commission has provided comments and a resolution for
   consideration included as Appendix G.

   Vancouver City Planning Commission Comments

   The Commission has reviewed this report and will submit their comments
   for consideration prior to The Standing Committee of Planning and
   Environment.

   Working Group Comments

   The Working Group s comments are included in Appendix F.

   Outstanding Work Items

   In Phase II, staff will continue to work with the community to further
   refine the concept plan into a plan for implementation.  In this phase,
   we will develop a plan and timing for renovation of houses and a
   strategy to relocate existing tenants.  We will look in detail at the
   cost and level of renovations for each house, including the addition of
   washrooms and the rehabilitation of interior and exterior heritage
   features.  It will be important to undertake some selective exploratory
   work to better understand and preserve the heritage merit of the   non-listed houses. We may select a couple of houses as test cases in
   order to improve the accuracy of overall economic analysis of the block. 
   Since it is necessary to upgrade the houses adjacent to the new daycare,
   this work item will need to be advanced to coincide with the daycare
   construction.  To preserve the heritage character of these houses staff
   will need to define the level of interior and exterior renovation, as
   well as a strategy for long term retention. At the same time, an open
   space plan will be needed to detail the pedestrian laneway, internal
   green links, community gardens, and heritage gardens.

   Guidelines for infill housing opportunities based on the City's 
   RT-7 guidelines will be developed.  Staff analysis of facility and
   housing developments will also be required. In addition, staff will be
   involved in making application for and supervising non-market housing
   development.

   The majority of the planning work will be undertaken by staff over the
   next year, with ongoing involvement over the several years of renovation
   and redevelopment. The public process will continue throughout the
   planning program.

   ENVIRONMENTAL IMPLICATIONS

   Both the Working Group and staff's concept plans are expected to benefit
   resource depletion and landfill impacts by renovating the majority of
   the buildings.  Surface run-off will also be minimized by maintaining
   large amounts of permeable surfaces.

   CityPlan Implications

   Both the Working Group and staff's concept plans will have a beneficial
   effect of preserving ground-oriented units near Downtown and providing
   greenways, community gardens and facilities. The staff option will also
   increase the amount of family housing, incorporate innovative infill,
   provide new forms of housing, enhance heritage features, and produce a
   mixed community.

   SOCIAL IMPLICATIONS

   Both the Working Group and staff's concept plans provide a range of
   housing and services that are needed in the neighbourhood, Downtown, and
   City. Badly needed health and daycare facilities are included and
   community/heritage gardens incorporated. In staff s concept, a range of
   housing type and tenure will allow for a mix of people and incomes.
   Labour training programs are being investigated and will be included in
   Phase II.

   FINANCIAL IMPLICATIONS

   The unencumbered land value of this property is estimated to be $18
   million. This value could produce an income stream of about $1
   million/yr if invested at a 6% rate of return. However, this would not
   provide public benefits such as the childcare facility, non-market
   housing, public open space, greenway development, and a special needs
   residential facility. Under the principles already established by
   Council, preliminary analysis indicates the maximum return could be in
   the order of $7 million. The option recommended by staff would result in
   a return of approximately $4 million. This does not include any
   potential revenue from selling banked heritage floorspace estimated at
   $6-8 million.

   Staff estimate that consultant funds of $45,000 and public process funds
   of $5,000 will be needed for Phase II of planning for Mole Hill. Half of
   these funds will be needed in 1997, with the Contingency Reserve Fund
   being the source. The remaining $25, 000 would be included in 1998
   departmental budgets. All staff for Phase II will come from existing
   departmental resources.

   CONCLUSION

   Staff recommend that Council adopt staff's principles and concept plan
   for development of Mole Hill as the basis for the next phase of
   planning. It is also recommended that the next phase commence
   immediately with funding of $50,000 for consultant and public process.


                                    * * * *


               Vancouver City Council Resolutions on Nelson Park
                                 April 2, 1996



   -    That the block between Comox and Pendrell Streets, from Bute to
        Thurlow Streets, be named "Mole Hill."

   -    That the Mole Hill lands be recognized as a City resource and that
        the land not be sold in whole or part. Further, that leasehold
        arrangements can be considered.

   -    That all existing residents will be accommodated on site as
        renovation takes place.

   -    That the City's existing policy of mixed communities will be
        maintained. Further, that priority be given to housing for low end
        of market rental.

   -    That all the City-owned heritage-listed buildings ("A", "B" and
        "C") be retained. Further, that the City's existing heritage
        policies will apply. And further that, in the event that buildings
        are moved or infill occurs, the existing scale and streetscape of
        Mole Hill should be respected.

   -    That revenues for renovation of the housing will be generated from
        the site. Further, that transfer of density policy may be used to
        achieve value from the unused development potential of the site.

   -    That the policies of CityPlan will be used as the basis for
        demonstration options, including innovative infill, new forms of
        housing, community gardens, greenways, etc. Further, that lane
        and/or street closures may be considered.

   -    That other options for use of the buildings and land will be
        considered, such as daycare, hospices, parks and other facilities
        that meet City needs.

   -    That staff will be asked to develop options for a labour training
        program as the site is renovated.

   -    That staff report back on a public planning process.




              Staff Principles for the Redevelopment of Mole Hill


   1.   As a priority, Monies generated by the site, including long term
        leases should be used on the site including Comox Street and the
        lane. This should continue until renovations and unit upgradings
        are completed. In addition, we should investigate other potential
        sources of funding.
   2.   Produce a reasonable return on the block, including some
        consideration of heritage density. 
   3.   Renovations to preserve city asset and minimize costs over long
        term, recognizing heritage value where practical. Equivalencies
        should be sought under the building by-law.
   4.   All renovations to respect heritage exteriors and be as sensitive
        as possible to heritage features in the interiors.
   5.   Upgraded units to provide as many self-contained units as possible
        given physical constraints.
   6.   All existing tenants accommodated on site.
   7.   A minimum of 96 units for low income and low end of market rental.
   8.   Accommodate Dr. Peter Centre on site.
   9.   Construction of a new daycare facility with a minimum of 25 spaces
        plus 28 spaces of family daycare, some of which will be located in
        existing houses.
   10.  Maintaining the listed heritage houses on their current sites; and
        retaining additions, subject to ability to provide upgraded
        accommodation without excessive costs.
   11.  Maximize the number of housing units on the block in existing
        structures and in new infill buildings, within the limits defined
        by the livability of the units, the heritage character of the
        block, and objectives for housing, social, and economic diversity.
   12.  Housing Diversity - provide a variety of housing types and sizes in
        existing buildings, concentrating on providing larger units
        (suitable for families) in new infill.
   13.  Social Diversity - provide housing opportunities for a wide range
        of people of all ages, including families with children.
   14.  Economic Diversity - preserve at least half of the housing for
        lower incomes, but also provide housing opportunities for middle
        and higher income groups.
   15.  All new development should respect the scale and be sympathetic to
        the character of the existing houses.
   16.  Except for vacant sites, or sites made vacant by demolition, all
        infill should be located in the rear yards.  Where possible, a
        minimum distance of 16 ft. should be achieved from existing
        buildings.
   17.  Substantial trees should be retained in place if possible, or
        replaced with more traditional species if endangered by new
        development.
   18.  Where possible, try to maintain open space around the mid-block of
        the lane and around the vacant "green link" to the park. 
   19.  In open areas, priority should be given to community and heritage
        gardens.
   20.  Incorporate the City Greenway on Comox Street.





                           WORKING GROUP PRINCIPLES

   Houses on the Heritage Inventory:
   Intent:   Wherever possible, the intent is to retain all houses on the
             heritage inventory in their current location.
   Principle:     All houses on the heritage inventory will remain in place
                  although some movement may occur on the lot.
   Vote:     10 out of 10 - Carried Unanimously.

   Houses not on the Heritage Inventory:
   Intent:   The intent is that all non-listed city-owned houses on the
             block not including additions be retained, but may be moved on
             the block.
   Principle:     That all non-listed City-owned houses, not including
                  additions, be retained on the block, but may be moved on
                  the lot.
   Vote:     10 out of 10 - Carried Unanimously.

   Demolition of Building Additions:
   Intent:   That demolition of building additions will only be considered
             under certain situations.  The additions at 1154 Comox Street,
             1147 and 1157 Pendrell Street would be considered for
             demolition.
   Principle:     That demolition of building additions will only be
                  considered if they are unable to provide safe and
                  adequate accommodation, they do not enhance the heritage
                  character, it is too expensive or not possible to bring
                  the addition up to fire and building codes, and if the
                  renovation would require further upgrades within a 20-30
                  year period.  The additions at 1154 Comox Street, 1147,
                  and 1157 Pendrell Street would be considered for
                  demolition.
   Vote:     10 out of 12 - Principle Adopted
   Principle:     If there is any loss of rental units through demolition
                  of housing additions, that the number of units be
                  replaced one for one.
   Vote:     10 out of 10 - Carried Unanimously

   Daycare Facility:
   Intent:   That 3 out of the 4 houses at 1127, 1129, 1133 and/or 1137
             Pendrell Street can be considered to incorporate a new daycare
             facility and retain houses for family daycare and housing
             units.
   Principle:     That the current child care facility be replaced and has
                  the ability to directly access the link to Nelson Park
                  between 1126 and 1136 Comox Street, and take advantage of
                  houses which are appropriate for family daycare,
                  currently identified as 1127, 1129, 1133 and/or 1137
                  Pendrell Street.
   Vote:     10 out of 11 - Principle Adopted

   Dr. Peter Facility:
   Intent:   That the Dr. Peter Centre be located on Mole Hill.  The design
             of the facility will meet their program needs while being
             sensitive to the community by fitting within the scale and
             context of the block.
   Principle:     That the Dr. Peter Centre be located on the vacant
                  Thurlow site as shown in option "D-7" and this facility
                  be designed to minimize the impact on the south side of
                  the heritage  B  houses at 1114 and 1110 Comox Street. 
                  Further consideration will be given to investigation of
                  encroachment into the lane and reducing impact on the 2
                  houses adjacent the facility.
   Vote:     10 out of 12 - Principle Adopted
   Principle:     That the Dr. Peter Centre and Daycare facilities be
                  sensitive to the heritage houses.
   Vote:     10 out of 10 - Carried Unanimously
   Principle:     That Dr. Peter and Daycare will be the only
                  non-residential uses on the site.
   Vote:     10 out of 11 - Principle Adopted

   Infill Housing:
   Intent:   That residential infill be sensitive to the heritage houses.
   Principle:     That the City's RT-7 and RT-8 guidelines be used as a
                  basis for infill guidelines to the site with the
                  intention of defining an appropriate scale, character,
                  and style similar to coach houses.
   Vote:     12 out of 12 - Carried Unanimously

   Housing Types and Mix:

   Intent:   That the current number of low-end rental and other forms of
             non-market housing be reflected in the concept plan in the
             current diverse form.
   Principle:     That there be a minimum of 165 affordable rental housing
                  units, similar to the current diverse mix in the
                  community including family or individuals with similar
                  income levels.
   Vote:     9 out of 10 - Principle Adopted
   Principle:     That the relocation of existing tenants be minimized and
                  those who are moved because of renovations be able to
                  return to their original unit if they desire.
   Vote:     10 out of 10 - Carried Unanimously

   Lane Treatment:

   Intent:   That the lane serves community use by having open space,
             access, and a pleasant atmosphere.
   Principle:     That the lane remain as a link between houses and
                  predominate as pedestrian use with the intent that a
                  minimum of 50% of open space behind the houses be
                  retained as public space.
   Vote:     12 out of 12 - Carried Unanimously

   Additional Principles:

   Principle:     That the Working Group accept the BC Woods Proposal to
                  build a daycare facility and that the footprint be
                  designed as indicated in the consultants "scheme B". 
                  Further, that Mrs. Rivers and the rest of the
                  neighbourhood be notified about this proposal.
   Vote:     13 out of 13 - Carried Unanimously
   Principle:     That the Working Group accepts the opportunity for infill
                  housing units at the western end of the block which does
                  not preclude the opportunities for consolidation of open
                  space at the centre and eastern part of the block. 
                  Further, that the priority for infill housing is to
                  ensure that 165 units is allocated for low-end of market
                  housing and non-market housing on the block.
   Vote:     10 out of 12 - Principle adopted
   Principle:     While opportunities for residential infill have been
                  discussed, there will be no infill at this point other
                  than the child care facility and Dr. Peter Centre.
   Vote:     11 out of 12 - Principle Adopted
   Principle:     Recognizing the potential for public open space in the
                  lane, above ground parking spaces will only be provided
                  for daycare and private residences and underground
                  parking for Dr. Peter Centre.
   Vote:     12 out of 12 - Carried Unanimously
   Principle:     Recognizing that the lane be designed for pedestrian
                  realm, where the car is permitted to intrude in a limited
                  way:
   i.   The width of the lane be narrowed to the minimum requirements for
        emergency vehicle use,
   ii.  Traffic calming and other measures be used such as bollards, speed
        tables, etc;
   iii. A "safe link" between Nelson Park and the daycare and public open
        space be provided.
   Vote:     12 out of 12 - Carried Unanimously
   Principle:     In recognition of the unique historic importance of the
                  block of houses known as "Mole Hill", that it be
                  officially declared a municipal heritage area, and,   That a Historic Area Planning Committee be struck to manage this
   historic resource, and,

             That a Master Plan and Infill Design Guidelines be developed
             for "Mole Hill", and,

             In recognition of the expressed wishes of the community, that
             the continuity of the streetscapes and the integrity of the
             blockfaces of this historic resource be preserved and
             enhanced, with the intention that all of the existing houses
             be retained, and,

             In recognition of the block's living heritage, that a mix of
             community uses be provided, including affordable daycare and a
             site for the Dr. Peter Centre.


   Vote:     9 out of 12 - Principles Adopted.


   REMAINING APPENDICES on file in City Clerk's Office

                                   * * * * *