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