ADMINISTRATIVE REPORT

Date: June 15, 1998

Author/Local: Kolvane Yuh/7125

CC File No. 5101

TO:	Vancouver City Council
FROM:	Manager of Real Estate Services
SUBJECT:	Proposed use of 50 parking spaces at 5202-5268 Joyce Street (Wessex Gate and Earles Court) built in City-owned land for the benefit of 3500 Joyce Street

RECOMMENDATION

A. THAT Council authorize an easement to secure use of 50 parking spaces at City-owned 5202 - 5268 Joyce Street (Wessex/Earles), for the benefit of a proposed development by Greystone Properties Ltd. nearby at 3500 Vanness (The Remington) as required by the City under development application DE402724 approved by the Director of Planning April 30, 1998;

On the condition that 80% of the actual gross market rents generated by the 50 parking spaces be paid direct to the City annually (i.e. bypassing the current cost and revenue sharing formula contained in the existing ground lease). Furthermore, if in any month, less than 25 parking spaces are actually rented, Greystone will guarantee a minimum revenue to the City based on market rents of 25 parking spaces, and any Greystone’s revenue shortfall not to prejudice the City in the revenue sharing arrangement in Wessex/Earles.

B. THAT the existing ground lease between the City and Greystone Real Estate Corporation for 5202-5268 Joyce Street be modified as necessary to the satisfaction of the Director of Legal Services.

C. THAT no legal right or obligation shall hereby arise until the signing of agreements to the satisfaction of the Manager of Real Estate Services and Director of Legal Services.

GENERAL MANAGER’S COMMENTS

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

COUNCIL POLICY

Council on June 2, 1998 approved generally the form of development of 3500 Vanness Avenue (The Remington).

Council on January 7, 1997 approved a reduced parking standard for the Collingwood Village development.

PURPOSE

This report seeks Council’s approval to grant a right for long term use of 50 parking spaces at 5202 - 5268 Joyce Street, (Wessex Gate and Earles Court, an assured rental residential building constructed on City owned land), for the benefit of a new building proposed by Greystone nearby at 3500 Vanness Avenue, the Remington, and the payment obligations from Greystone to the City. Appendix "A" illustrates the location of the off site parking. The form of the ground lease was specifically approved by Council, and Council’s authority to modify the lease is necessary.

BACKGROUND

In August, 1989, Council approved an Option to Lease to VLC Properties Ltd. for assured rental housing development on a City owned site at 3300 Vanness which, with Council approval on September 2, 1993 was exchanged, resulting in the City owning the current site at 5202-5268 Joyce Street. VLC, now Greystone Real Estate Corporation constructed 230 residential rental units and 308 parking spaces on the site, and the buildings, called Wessex Gate and Earles Court have been occupied since November 1996.

On November 2, 1993 Council approved rezoning of Collingwood Village, a CD-1 development which required a parking standard of approximately 1.35 parking spaces per dwelling unit overall. Post occupancy experience of nearby developments pointed to a lower parking demand than had been expected, due to the proximity of SkyTrain. In November 1996, Greystone retained Paul Bunt & Associates Engineering Ltd. for a parking study which recommended a reduced parking standard for Collingwood Village. City Engineering participated in ensuing studies, and recommended a reduction of 20% to 25% in parking standard for Collingwood Village. On January 7, 1997 Council approved amending the bylaws to effect the reduced standard.

DISCUSSION

The Remington is proposed to be 258 residential units with approximately 260 parking spaces. The parking is short by 42 to 50 spaces, and Greystone proposed, and the Director of Planning has approved as a prior-to requirement under development application DE402724, that the parking shortfall will be secured from Wessex/Earles nearby. The Remington will be stratified and the units can be sold individually. However, we are informed by Greystone that their intention is for long term rental. Housing Centre advised that the rental use of the Remington will not be covered by covenant, as the 15% rental commitment required by the Collingwood Village rezoning has been fully met by several existing rental buildings on the site.

Wessex/Earles has 308 parking spaces located in three underground levels. Tenants demand has been 230 parking spaces, leaving 78 spaces vacant. The revised parking standard for Collingwood Village indicates that 56 spaces are surplus. The Bunting report concluded that the key reason for a lower parking demand is the proximity of SkyTrain. The Joyce SkyTrain Station will likely remain for the long term, and the surplus parking capacity in Wessex/Earles will likely remain so. Therefore, the risk of inadequate parking in the long run for Wessex/Earles tenants, after committing 50 spaces to the Remington, is considered low and acceptable. Real Estate staff have reviewed the proposed physical partition of the parking spaces, and considered the arrangement acceptable.

After negotiation, Greystone agreed to have the market parking rents (minus 20% management and operation costs) actually received from the 50 parking spaces flow direct to the City annually, bypassing the existing revenue sharing formula stipulated in the ground lease. Greystone will also guarantee market rental revenue for 25 spaces, in case parking demand by tenants of the Remington for spaces in the Wessex/Earles should prove to be significantly insufficient.

The agreement would provide the City with a modest improvement in the City’s revenue from the Wessex/Earles project by approximately $4,800 to $12,000 per year based on current parking rates in the area. Greystone will benefit from a construction saving in the Remington for building less parking spaces, but their intended rental use of the Remington can be considered a balancing factor. Since the City will be taking all the net market parking revenues from the 50 parking spaces, there is no more to be asked for from Greystone as far as the value of the 50 parking spaces are concerned. For the above stated reasons, the Manager of Real Estate Services puts forward the Recommendation for Council’s approval.

NOTE:ATTACHMENTS TO THIS REPORT THAT DO NOT HAVE ELECTRONIC COPY ARE AVAILABLE ON FILE IN THE CITY CLERK'S OFFICE.

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(c) 1998 City of Vancouver