ADMINISTRATIVE REPORT

Date: February 14, 2000
Author/Local: J. Scholtz/7848
RTS No. 01175
CC File No. 5104

Council: March 7, 2000

TO:	Vancouver City Council
FROM:	Director of the Housing Centre
SUBJECT:	Proposed Lease Terms for Non-Market Housing: 2320 Franklin Street

RECOMMENDATIONS

A. THAT Council place the Kiwassa Housing Society on the City-approved list of sponsors and resource groups for non-market housing on City-owned sites.

B. THAT the PEF lease the property at 2320 Franklin Street, legally described as Lot B, Block 42, D.L. 184, Plan LMP43810, to Kiwassa Housing Society, as per the Standard Charge Terms registered in the Land Title Office under ST941002, with the following specific terms and conditions:

1) a term of 60 years;

2) a total prepaid lease rent of $1,248,493;

3) lease commencement date being 180 days after Council approval, or such later date as may be approved by the City Manager;

4) The City may cancel the lease if construction has not commenced within 12 months of the date of commencement of the lease; and

5) Such further and other terms as are acceptable to the Director of the Housing Centre and the Director of Legal Services, it being noted that no legal obligation shall arise until execution of the lease.

GENERAL MANAGER'S COMMENTS

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

COUNCIL POLICY

It is Council policy to use the Property Endowment Fund to assemble sites for lease to non-profit and co-op sponsors for 60 years at a prepaid rent equal to 75% of acquisition cost of freehold value.

It is also Council policy to maintain and expand housing opportunities in Vancouver for low and moderate income households, with priority being given to Downtown lodging housing residents, elderly people on fixed incomes, the physically and mentally disabled, and single parents with children.

PURPOSE

The purpose of this report is to request Council to approve the lease terms for a proposed non-market housing project.

ELIGIBILITY FOR COUNCIL-APPROVED SPONSOR LIST

Kiwassa Housing Society was incorporated in 1990 with a mission to provide opportunities for people to participate actively in the community. It is the housing arm of the Kiwassa Neighbourhood House. Its operation and experience in a varied cultural and ethnic environment is reflected in its management of May McLean Place, a 23-unit non-market family project. This project has a standard City ground lease. The Society has completed application for sponsorship of non-market projects on City land. The Society has scored above the 70 point minimum and staff therefore recommend its inclusion on the list.

BACKGROUND

On May 26, 1998, Council approved the purchase of 2 lots (2320 and 2342 Franklin St.). Council further approved the purchase of 2358 and 2368 Franklin St. for $749, 658 on July 27, 1999, for a total combined purchase price of $1,664,658, not including applicable taxes. These four contiguous lots have now been purchased and consolidated into one legal parcel under 2320 Franklin St. (see Figure 1) The size of the newly consolidated site is 22,757 sf. All four houses have been demolished and the site is now vacant. Progressive Homes, builder of the project, guarantees that the lots are free of contamination.

Figure 1

During land assembly, various attempts had been unsuccessfully made to acquire a fifth lot at the corner of Franklin and Nanaimo. This would have allowed the project to complete the block. This is an estate property and is not available at this time. If it becomes available in the future, it may make sense for the City to consider its acquisition to consolidate the block, with Kiwassa to manage the house as part of its project.

THE PROJECT

This project, which forms part of the 1998 City/Province Non-Market Housing Partnership with B.C. Housing, will have 33 apartment units for families, including 40 underground parking spaces. The proposed unit mix is 2 suites for handicapped persons, 5 one-bed, 13 two-bed, 10 three-bed and 3 four-bed units. It will accommodate a mix of incomes (60% core-need who will be subsidized and 40% who will pay market rent and be unsubsidized). Its location fronting Pandora Park and being near two intersecting major transit lines make it an appealing site for family development. No rezoning for the site is required. Preliminary plans have been prepared and application has been made for development permit under DE404734.

PROJECT FUNDING

Capital funding is provided by B.C. Housing and they have provided a conditional allocation to the project.

The Manager of Real Estate Services recommends a basic rent of $1,248,493 for a 60-year lease. This is 75% of $1,664,658, the purchase price for the newly-consolidated parcel.

LEASE TERMS

The lease to the Kiwassa Housing Society would be on the standard lease terms for non-market housing, to include specific terms as stated below:

· Term of Lease	60 years;
· Prepaid Rent	$1,248,493;
· Lease Commencement Date	The lease will commence 180 days after Council approval, or such later date as may be approved by the City Manager; and
· Start of Construction	Construction must commence by February 28, 2001, or such later date as may be approved by the City Manager, or the City may cancel the lease.

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(c) 1998 City of Vancouver