ADMINISTRATIVE REPORT

                                             Date:  June 27, 1995
                                             Dept. File No.  GMcG


   TO:       Vancouver City Council

   FROM:     Associate Director of Planning
             Land Use and Development and Manager of the Housing Centre

   SUBJECT:  Heritage Revitalization Agreement for 347 East Cordova Street
             and Victory House Replacement 

   RECOMMENDATION

        A.   THAT Council  authorizes a  Heritage Revitalisation  Agreement
             (HRA) to restore and protect the heritage building at 347 East
             Cordova Street.

             FURTHER THAT the  City agree to accept surrender  of the lease
             for Victory House  at 391 Powell  Street, coincident with  the
             occupancy  permit for  a  Special Needs  Residential  Facility
             (SNRF) at  353 East Cordova Street  and on the basis  that the
             City acceptance of  the lease surrender is  full consideration
             and  compensation to St. James Social  Service Society for the
             HRA for 347 East Cordova Street.

        B.   THAT the City-owned site at 391 Powell Street be used for non-
             market  housing and that  St. James Social  Service Society be
             named as sponsor, subject to review if provincial funding  for
             the project is not forthcoming by the end of 1996.

        C.   THAT Council instruct the delegate of  the Director of Finance
             to make  a development application  for any future use  of the
             City owned site at 391 Powell Street.

   GENERAL MANAGER'S COMMENTS

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

   COUNCIL POLICY

   It is City  practice to lease City  land to non-profit societies  for 60
   years at a prepaid rent of 75%  of freehold value for non-market housing
   development.
   SUMMARY

   The St. James Social Service Society has come forward with a development
   proposal to relocate their  Victory House SNRF from 391 Powell Street to
   353 East Cordova  Street (see Appendix A).  As part  of the proposal the
   Society offered  to restore the  adjacent "B" listed  Vancouver Heritage
   Register building  at 347 East Cordova Street and  enter into a HRA with
   the City ensuring its long term protection.  In exchange, the City is to
   accept  surrender of  the lease  of Victory  House at 391  Powell Street
   coincident with  the occupancy  permit for  a SNRF  at 353  East Cordova
   Street.  The report further identifies a  use and sponsor for 391 Powell
   Street.

   BACKGROUND

   Victory House at  391 Powell Street was purchased by the City in 1977 at
   the request of May Gutteridge  of the St. James Social Service  Society.
   The building, which includes a  commercial restaurant, was leased to the

   Society for  $1 per year for a term expiring in 2000.  Victory House has
   operated  as a community  residence for 47 individuals  with psychiatric
   illness.

   Conditional approval has been given for a development application at 353
   East Cordova Street  for the replacement Victory House  facility and the
   Province has approved funding for the new facility.  A condition  of the
   issuance  of the development permit for this  relocated SNRF is that the
   Director of  Planning be guaranteed  that the  SNRF use of  the existing
   Victory House SNRF site be discontinued before the new SNRF is occupied.
   Secondly, the "B" listed heritage house is to be restored before the new
   SNRF is occupied.
         
   DISCUSSION

   Victory House Replacement

   To meet the conditions of  the development permits for 353  and 347 East
   Cordova Street, the  lease for the existing Victory  House at 391 Powell
   Street needs to be surrendered.   This provides assurance that St. James
   would not continue using the old  Victory House as a SNRF, which  is not
   permitted  under  the  Downtown  Eastside  Oppenheimer  District  (DEOD)
   Official  Development Plan  (ODP).    The surrender  of  the lease  also
   provides assurance  that the Society  has been given  full consideration
   and  compensation for entering  into a HRA.   The Society  has agreed to
   surrender  the lease  upon occupancy  of  the replacement  facility.   A
   second condition of  the development permit for 353  East Cordova Street
   is that a development permit  be obtained for any future use of the City
   owned site at 391 Powell Street.

   Heritage Revitalization Agreement

   Staff will report  to Council in  the near future with  suggested policy
   and guidelines for the use and processing of HRAs.  Staff  are reporting
   this proposed  HRA prior  to the policy  report because  the development
   application should not be delayed. 

   A  HRA, is  a new  heritage conservation  tool available  through recent
   amendments to the Vancouver Charter.  A HRA, adopted by-law, is a legal,
   registered agreement negotiated by the property owner and the City, that
   sets  out  the  responsibilities  of   the  owner  with  regard  to  the
   restoration  and conservation  of  a building  listed  on the  Vancouver
   Heritage Register. In  contrast to heritage designation  (which the City
   can impose thereby  invoking statutory protection  for the building  but
   also giving rise  to a claim for compensation), through a HRA, the owner
   agrees to preserve  and protect the heritage  structure.  Notice  of the
   HRA is filed in the Land  Title Office and so becomes binding  on future
   owners.

   The  HRA  for  347  East  Cordova  Street  proposes  the  retention  and
   rehabilitation of the 'B' listed Vancouver Heritage Register building as
   defined  by  Development  Application  No. 217470.  The  HRA  will  also
   restrict future alterations  to the heritage  building and will  require
   replication should  the  building  be  demolished or  destroyed  in  the
   future.

   Protection through  HRA is preferred  over designation for  this project
   because there is  no adequate way to  compensate for a designation.   As
   well, the HRA provides better protection than designation.

   Heritage Value

   Built in  1901, this house is a good example  of the Queen Anne style in
   the  Downtown  Eastside.  The  house  is 2-´  storeys  with  a  2-storey
   projecting bay on the front elevation, and  is clad with wood siding and
   patterned  wood shingles. Other notable features include decorative wood

   trim in the  gable end, dentil trim  on the projecting bay  and original
   wood windows.

   The house is  listed in  the "B"  evaluation category  on the  Vancouver
   Heritage  Register.  The  Vancouver Heritage Commission  (previously the
   Vancouver  Heritage Advisory Committee) reviewed this proposal on August
   15,  1994, and  commended the  applicant on  the proposed  retention and
   restoration  of the  "B" listed  building  and resolved  to support  its
   protection.

   Compatibility with Community Planning Objectives

   One of the goals in the "Application and Intent" section of the  DEOD is
   to  "preserve  and  enhance  the  heritage  character  of  the  Downtown
   Eastside/Oppenheimer area and recognize its historic significance in the
   evolution of Vancouver".  This house is located in the Sub-Area 2 of the
   DEOD  where  the  rehabilitation of  existing  residential  buildings is
   encouraged.   The project  will result  in the  loss of  two "C"  listed
   buildings.  However, because the  most valuable heritage building in the
   group,  the "B"  listed building  at 347  East Cordova  Street, will  be
   rehabilitated and  given long  term protection,  staff believe  the DEOD
   objectives are being met.
     
   Zoning Considerations

   The "Use"  section of  the  DEOD does  not permit  a new  SNRF.   As  an
   incentive to  retain the heritage  building at 374 East  Cordova Street,
   the Associate Director of Planning,  Land Use and Development, agreed to
   interpret this  section to  permit the relocation  of the  existing SNRF
   from DEOD Sub-Area  3 to 353 East Cordova Street in Sub-Area 2, provided
   the SNRF use at 391 Powell Street then ceases.  The size of the facility
   will remain unchanged.  The proposal has, therefore, been processed as a
   development application instead of as a rezoning.

   Condition and Economic Viability

   The "B" listed heritage  house is in fair condition.   Rehabilitation of
   the  building will  include the  repair,  cleaning and  painting of  all
   existing wood  surfaces, the  replacement of the  entrance porch  with a
   similar structure and the reconstruction of a one-storey addition at the
   rear.   Future alterations  to this designated  building will  require a
   Heritage Alteration  Permit.  Plans  and elevations of the  proposal are
   included in Appendix B.

   St. James has determined that the incentives noted in the zoning section
   above and the  City's acceptance of surrender  of the lease for  the old
   Victory House at 391 Powell Street, coincident with the occupancy permit
   for  a SNRF  at 353 East  Cordova Street,  would make the  retention and
   restoration of the heritage building economically viable.   The property
   owners have  signed a  HRA (on  file with  the Law  Department) for  the
   protection  of   347  East  Cordova   Street  and  waiving   any  future
   compensation   demands.    Therefore,  no  further  support  to  achieve
   appropriate conservation of this building will be required.

   The Development  Application No. DA217470  for the heritage site  at 347
   East Cordova  Street requires the  relaxation of one parking  space (two
   required, one provided)  and one loading space.   The Associate Director
   of Planning, Land Use and Development is able and prepared to give these
   relaxations.

   Use of 391 Powell Street Site

   Staff  have considered the possible uses for  the 391 Powell Street site
   after St. James has moved to its new location.  These are:
        - Sell the site
             Likely  options for purchasers  would be keeping  the building

             and converting it  to warehousing or demolishing  and building
             loft condos.
        - Maintain ownership of the site
             Use  as SRO,  operated  either  by the  City  or a  non-profit
             society OR
             Lease to a non-profit for non-market housing.

   From a housing  perspective, the optimum use  for this site is  for non-
   market housing.   This is consistent with the DEOD  ODP which encourages
   increasing the  proportion of affordable  self-contained dwelling units.
   It is  also consistent with  the City's intent to  facilitate non-market
   housing  in the Downtown Eastside.   About 30  non-market units could be
   achieved.

   The DEOD ODP permits 1.0 FSR for  residential, commercial or other uses.
   Additional density is conditionally  permitted, provided that non-market
   housing  is  included.   In  practical terms,  non-market  housing could
   achieve  2.5 FSR  on this site  compared with  1.0 FSR for  market uses.
   From a real estate  perspective, the Manager of Real Estate advises that
   the best financial return to the City would be leasing the site for non-
   market housing.

   St. James has written to the City indicating that it would be interested
   in  sponsoring  a  social  housing   project  on  this  site.  In  other
   circumstances  relating  to City-owned  sites,  the  City has  issued  a
   proposal call for non-profit housing sponsors.  However, St. James is an
   obvious choice  for this  site as it  has successfully  operated Victory
   House at  the same  location for twenty  years and  a mixed  housing and
   community service  complex in the same block.  Recently, the Society was
   added to the List  of Sponsors for Non-Market  Housing on City-owned  or
   Controlled sites.   The issue of  using the site for  non-market housing
   and naming  St.  James as  sponsor was  discussed at  meetings with  the
   Downtown Eastside  Strathcona Coalition  on February  21  and March  21,
   1995.  The consensus was that this was a good approach.

   St. James  would apply to the  province for unit allocations  this year.
   If  unsuccessful  in  1995  and  1996, the  site  sponsorship  would  be
   reviewed. 

   In the unlikely event that the site is not used for new social  housing,
   staff would report  back on alternatives.   To meet  a condition of  the
   development  application  at  353 East Cordova Street,  the  Director of
   Planning requires assurance that the building at 391 Powell Street would
   not  be used  as a  SNRF by  the  City or  a lessee.   Recommendation  C
   provides this assurance by stating that a development  application would
   be secured  should the  building at  391 Powell  Street be  used in  the
   future.     

   CONCLUSION

   The Director  of Legal Services  has prepared a  Heritage Revitalization
   Agreement  By-law that  would ensure  the  rehabilitation and  long-term
   protection of the "B" listed Vancouver Heritage Register building at 347
   East Cordova Street.  St.  James Social Service Society is committed  to
   this HRA  in exchange for the City accepting  surrender of the lease for
   Victory House at 391 Powell Street, coincident with the occupancy permit
   for a  SNRF at 353  East Cordova Street.   Therefore, it  is recommended
   that Council  authorizes the HRA and  surrender the lease at  391 Powell
   Street.  The report further identifies a  use and sponsor for 391 Powell
   Street.

                                   * * * * *


    General Mgr./Dept. Head:    Report dated:  June 27, 1995       

                                Author: Gerry McGeough (7091)/Jill 
                                        Davidson (7670)            
    Date:                       Phone: 7091 IRTS Number: CC95231   


    This report has been        Concurring Departments             
    prepared in consultation
                                Law Department-F.J.Connell (7506) 
    with the departments                                           
    listed to the right, and
    they concur with its
                                Real Estate-B.E. Maitland (7420)   
    contents.
                                                                   

                                
   mcgg\005-3923.cov