ADMINISTRATIVE REPORT

Date: December 31, 1997

Author/Local: J. Davidson/7670

Dept. File No. F828

CC File No. 4656

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

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RECOMMENDATION

THAT Council approve the Housing Agreement summarized in Appendix A and modified from the previously approved version to eliminate the requirement for a priority agreement from CMHC.

GENERAL MANAGER'S COMMENTS

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

COUNCIL POLICY

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.

On July 9, 1997 Council adopted the following motions:

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.

PURPOSE

This report seeks Council approval of modifications to a housing agreement for 932 Granville Street covering 64 of 75 single rooms above the street level cabaret operation.

BACKGROUND

The City has agreed in principle to endorsing an application by the Roxy Cabaret Ltd. to increase the seating to 275 seats in the Class C Cabaret, subject to a 10 year housing agreement for the Siesta Hotel to provide SRO accommodation affordable to people on GAIN.

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.

Subsequently the applicant committed to getting the mortgage holders to agree to the City’s priority. On that basis in July 1997 Council approved in principle the Housing Agreement. By-law 7787 was approved authorizing the Director of Legal Services to execute the Housing Agreement on behalf of the City. Staff were later informed that Canada Mortgage and Housing Corporation (CMHC) were not willing to execute the priority agreement. Consequently the Director of Legal Services has not executed the Housing Agreement.

DISCUSSION

The owner is participating in CMHC’s Rental Rehabilitation Assistance Programme (RRAP) and is receiving a forgivable loan secured by a mortgage.

CMHC refused to grant the priority agreement due to the possible conflicts with the RRAP Operating Agreement. The major potential conflicts are as follows:

1.The Housing Agreement allows for rent increases if the provincial shelter allowance increases or if additional facilities are needed, provided that the rents remain affordable to people on social assistance whereas the RRAP Operating Agreement does not.

2.The Housing Agreement allows for a reduction in rooms if washroom facilities are improved and expanded. This could affect the Operating Agreement which is based on a set number of rooms.

The risk to the City of proceeding with the Housing Agreement without CMHC priority is in the event that the owner defaults on obligations to CMHC. A court may hold that CMHC, by virtue of its prior registration, has the ability to foreclose the Housing Agreement [a "Legal Notation"] from title to the lands. The Director of Legal Services considers the risk of this eventuality to be minimal.

The City has obtained priority for the Housing Agreement over the other mortgages on title and so this concern does not arise in those instances.

In conclusion, staff assess the risk to the City to be small and therefore recommend that the modified Housing Agreement be approved in principle.

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Appendix A

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 except CMHC.

(c) 1997 City of Vancouver