A8
ADMINISTRATIVE REPORT
Date: July 11, 1995
Dept. File No. F654
TO: Vancouver City Council
FROM: Manager of the Housing Centre
SUBJECT: Lease Terms for 983 Homer Street
RECOMMENDATION
A. THAT Council approve the lease of Lot B, Block 75, D.L. 541,
Plan LMP 19692 to The 127 Society for Housing on the terms
described in this report and other terms to the satisfaction
of the Director of Legal Services and the Manager, Housing
Centre;
AND THAT the Director of Legal Services be instructed to
prepare and execute the lease documents on behalf of the City;
AND FURTHER THAT no legal right or obligation is hereby
created and none shall arise hereafter except upon execution
of the lease documents by all parties.
B. THAT Council approve the demolition of the commercial building
at 983 Homer Street, with the maximum cost of demolition to be
$15,000, charged to the PEF Demolition Account, 64/80/8009/396
to be recovered with the first mortgage advance.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of A
and B.
COUNCIL POLICY
It is City practice to purchase privately-owned land for non-market
housing development and lease it to non-profit sponsors for 60 years at
a prepaid rent equal to 75% of market value (plus taxes).
PURPOSE
This report seeks Council's approval of proposed lease terms for the
non-market housing project at 983 Homer Street.
BACKGROUND
On December 8, 1992, Council approved 'In Camera' the purchase of the
site at 983 Homer Street (see Appendix A) for non-market housing for a
total purchase price of $1,400,000 plus 3% net GST. On July 5, 1994,
Council approved The 127 Society for Housing as sponsor.
For BCHMC-approved social housing projects the City is committed to a
standard form of lease. The only variations are the rent and any
special terms which the City may require.
PROGRESS TO DATE
This project is a 90 self-contained unit apartment building primarily
for Downtown South seniors currently living in SRO hotels. B.C. Housing
Management Commission has given conditional approval for the project.
A conditional development permit application for the project has been
approved. The schedule is for construction start in early 1996 and
occupancy the fall of 1996.
PROJECT COSTS
The Manager of the Housing Centre recommends a basic rent of $1,125,000
for a 60-year lease. This is 75% of $1,500,000, the market value of the
site. The budget for the project can support this prepayment.
The City will undertake demolition of the existing commercial building,
with the costs recovered from the project at the time of the first
mortgage payment. The maximum cost for demolition is estimated at
$15,000.
Regarding soil remediation, a Phase I environmental assessment has been
completed which indicates that there is a low level of environmental
risk and no further assessment is required at this time. Permits and
Licenses have stated that there is no need to do a second phase
assessment. However, if in the unlikely event remediation is needed,
the lessee will take responsibility.
PROPOSED LEASE TERMS
The proposed lease terms include:
1. Basic Rent: $1,125,000.
2. Term: 60 years from the commencement of the lease.
3. Date of Commencement: The earlier of the date of signing the lease
by all parties, or 90 days from the date of Council approval of
lease terms.
4. Such other terms and conditions as the City and BCHMC agree upon.
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