SUPPORTS ITEM NO. 3
CS&B COMMITTEE AGENDA
MARCH 28, 1996
ADMINISTRATIVE REPORT
Date: March 21, 1996
Dept. File: DC
TO: Standing Committee on City Services and Budgets
FROM: Director of the Office of Cultural Affairs, in
consultation with the Directors of Land Use &
Development and Central Area Planning, Manager of
Real Estate, Director of Community Services, and
the General Managers of Engineering Services and
Corporate Services
SUBJECT: Land Request - Dance Foundation
(Vancouver Dance Centre)
RECOMMENDATION
A. THAT Council withhold a City-owned site at the
corner of Pacific and Granville Streets from
disposal or alternate use for a period of up to
three years, and subject to the Dance Foundation
(Vancouver Dance Centre) fulfilling the conditions
outlined in this report to the satisfaction of the
City Manager, Council approve in principle a lease
of the subject site to the Dance Foundation and
recommend to the Council of the day that this lease
be provided for a term of 60 years at a nominal
rate ($1).
B. THAT Council direct staff to report back outlining
the terms of the lease as soon as the conditions
outlined in this report have been met to the
satisfaction of the City Manager.
CONSIDERATION
C. THAT Council direct staff to reserve $1.2 million
from the 1994-1996 Capital Plan to pay the Property
Endowment Fund for the subject site as outlined in
this report; with the payment to occur at the time
the lease is approved by Council.
- OR -
D. THAT Council direct staff to reserve $900,000 from
the 1994-1996 Capital Plan for a 60-year prepaid
lease to the Property Endowment Fund for the
subject site as outlined in this report; with the
payment to occur at the time the lease is approved
by Council.
GENERAL MANAGERS' COMMENTS
The General Managers of Community Services and Corporate
Services submit A, B and either C or D for CONSIDERATION.
COUNCIL POLICY
In April 1990, Council approved the Cultural Facilities and
Projects Priorities Report which included
rehearsal/production/ administration space, subject to the
presentation of feasible proposals for their realization.
In June 1993, Council directed that properties held by the
Property Endowment Fund (PEF) receive rent or lease income at
market rates; however, purpose-built/renovated PEF properties
occupied by non-profit organizations be transferred from the
PEF to be held as assets in the Capital Fund. Rental rates
for purpose-built social service and cultural facilities held
in the Capital Fund are set at $1 per year.
SUMMARY
This report seeks Council's approval to redirect its 1993 site
commitment to the Vancouver Dance Centre Society (VDCS) to an
alternative City-owned site on the south side of Pacific
Boulevard between Granville and Seymour Streets (see Appendix
A). The previously approved site was subject to the
completion of a land swap with a third party. To date, and
after considerable effort, the City has been unable to
complete this land swap and is therefore unable to enter into
the previously proposed lease with the Vancouver Dance Centre
Society.
On the basis of Council's original site commitment, the VDCS
has secured a $3.7 million grant from the Canada/British
Columbia Infrastructure program and is now ready to proceed
with a capital campaign to secure the remaining funds. To
have any reasonable prospect of success, they require
confirmation of a replacement site. The VDCS through a newly
constituted fund raising foundation, "The Dance Foundation",
is seeking Council's approval of an alternative site for the
dance centre facility.
Staff have, with the Dance Foundation, reviewed all available
City-owned sites, and many private opportunities in the
downtown. The Dance Foundation has identified a site on the
south side of Pacific Boulevard, between Granville and
Seymour, to be the best available option for a future dance
centre.
Staff have reviewed this site, which is currently used as an
impound lot, along with preliminary drawings for the facility,
and has identified a series of engineering, planning and
design issues which will need to be resolved prior to entering
into a lease. Staff recommend that the granting of a lease be
subject to a series of conditions including site and design
issues, as outlined in this report.
Staff believe that these conditions can be resolved during the
period that the Dance Foundation is completing its fund
raising obligation before returning to Council with a proposed
lease agreement.
At this time, staff are seeking Council's authorization to
withhold the site from disposal or alternative use, to reserve
the site for a dance centre facility and, subject to meeting
the terms and conditions outlined in this report, for approval
in principle of a lease to the Dance Foundation.
This report provides two options for Council's consideration
to reimburse the Property Endowment Fund for the subject site,
at the time that the Dance Foundation has met the terms and
conditions and the Council of the day considers a lease
agreement.
PURPOSE
The purpose of this report is to redirect Council's commitment
of a City-owned site from one in Downtown South to a site at
Pacific and Granville Streets adjacent to the Concord Pacific
Area 1 Western Neighbourhood for the development of a dance
centre facility by the Dance Foundation (Vancouver Dance
Centre).
BACKGROUND
In December 1991, Council directed staff to assist the
Vancouver Dance Centre Society to:
1. identify appropriate City properties as potential
sites for the dance centre facility, and,
2. identify a potential amenity bonus opportunity.
Since Council's direction in 1991, staff has worked with
Vancouver's professional dance community to identify a
suitable site for development as a dance centre facility
providing much needed rehearsal, production and administrative
facilities.
In 1993, having considered an extensive range of opportunities
and options, Council directed that, following the completion
of the subdivision and transfer of a site at the corner of
Nelson and Mainland to the City, the subject site be withheld
from disposal or alternate use for a period of five years
during which time the Vancouver Dance Centre was to meet a
number of conditions, including the completion of a capital
and endowment campaign to raise the funds necessary to build
and operate the facility.
The site, however, was subject to the completion of a land
swap with Larco Investment Holdings Inc. At the time of the
Council decision in 1993, this swap had been negotiated but
not concluded.
In March of 1995, the Canada/British Columbia Infrastructure
Program announced funding for the Dance Centre project in the
amount of $3.7 million. With $3.7 million of the projected $6
million capital costs in hand, the Dance Centre was anxious to
get on with raising the outstanding $2.3 million in capital
costs, as well as a $2 million endowment fund required to
complete and operate the building. A new society, the Dance
Foundation was formed to undertake this task. However, a
confirmed site is required.
Staff, therefore, reopened discussions with respect to the
land swap, and, while several other development possibilities
were reviewed, neither the land swap nor an alternative was
realized.
City staff has since reopened the review of alternative sites,
identified three potential City-owned sites, and one possible
"bonus" opportunity in a private development. The City-owned
sites examined were:
- a semicircular site bounded by the Granville Street
off-ramp;
- a triangular site at the corner of Beach and
Granville Street; and
- a site between the Granville and Seymour Street off-
ramps.
A potential bonus site was proposed by Concord Pacific as part
of its False Creek North Sub-Area 1 rezoning, which was
submitted last summer but subsequently withdrawn. There may
still exist an opportunity for the Dance Foundation facility
within False Creek North. However, because of time
constraints imposed by the Infrastructure Program which
requires that a site be confirmed by April 30, 1997, the Dance
Foundation is seeking Council's approval of a City-owned site
as an alternative to the previous site commitment. Staff will
continue to monitor bonus opportunities for a dance centre and
report back to Council if one can be identified.
DISCUSSION
The Site
The Dance Foundation has concluded, in discussion with City
staff, that the most appropriate site option available at this
time is a 57,508 sq.ft., City-owned, site which extends along
Pacific Boulevard from Granville Street, under the Seymour
Street off ramp, over to Concord Pacific's False Creek North
lands (Lots 2, 3 and 4, Block 123, District Lot 541, Plan
9597).
The site offers good visibility on Pacific Boulevard, good
proximity to transit and the downtown core, and provides a
complimentary use to the False Creek North Western Neighbour-
hood area.
The Manager of Real Estate Services estimates the market value
of the subject site based on a 1.0 FSR as proposed by Planning
is $1.2 million or, $900,000 for a 60 year prepaid lease, less
the cost of soils remediation. The Manager of Real Estate
Services notes that the site has not been tested for soils
contamination and the cost of remediation will reduce the
market value accordingly.
The site is currently leased to Unitow and is used as the City
Impound Lot. Consideration of the site for a dance centre, or
any alternative use would necessitate relocating the Impound
Lot. Staff note that before entering into a lease with the
Dance Foundation, an alternative location in a central
location would need to be secured for the City Impound Lot.
Staff is recommending, that subject to securing an alternate
site for the Impound Lot, and subject to the other site and
funding conditions outlined in this report, that the subject
site be leased to the Dance Foundation for a period of 60
years.
In considering this request, Council should note that the site
has not been tendered or advertised publicly in the City's
normal manner, but rather staff propose this site to address
Council's direction to seek a site for the dance centre.
The Manager of Real Estate Services advises that
alternatively, the site could be developed for social or
market housing, noting, however, that the area between the
bridges is limited.
Design Issues
Any potential development will be required to secure site
rezoning and adhere to the City's development approvals
process. Initial design studies submitted by the Dance
Foundation indicate that the site can accommodate the building
program.
Planning Department staff has identified the following
principal urban design issues which the Dance Foundation would
need to address for this site:
- built form should be below the bridge deck;
- principal public entrances should be from Pacific
Street on the Pacific/Granville corner;
- building areas should not be under bridge structures
except for minor single-story access systems;
- pedestrian interest should be provided along Pacific
and Granville Streets with active, animated uses
along or close to the property line;
- vehicular access to parking and loading should be
from Granville Street;
- parking demand will need to be determined.
- parking should be south of the main structure and
carefully shielded from adjacent development;
- built form must be reconciled with development
proposals to the east and south.
Capital and Operational Funding
Following the Infrastructure announcement, the Vancouver Dance
Centre Society formed a new society, the Dance Foundation.
Its mandate is to undertake the funding, construction and
operation of a dance centre.
The Dance Foundation is seeking a renewed commitment from the
City for a site so that it may proceed to raise the balance of
the capital required to construct the facility, estimated to
be $6 million, excluding land as well as a $2 million
endowment fund. With $3.7 million of the necessary project
funds now committed, subject to securing a site, the Dance
Foundation is preparing to launch a $4.3 million fund raising
campaign.
The Foundation has recruited new board members to undertake
the necessary fund raising and has been working with a
consultant to determine the campaign timing and strategy.
While the fund raising will most certainly be a challenge,
Cultural Affairs staff believe that the Dance Foundation has
developed a certain momentum and commitment within its
community, and with the confirmation of a site, is now in a
position to develop its capital campaign.
When Council considered the original site recommendation,
staff identified a set of conditions which were to be met
prior to entering into a long term lease. Much work has been
accomplished by the Dance Foundation to satisfy these original
requirements. Some are still outstanding. Staff continue to
recommend that the following set of conditions be met prior to
reporting back to Council with a lease agreement. The Dance
Foundation must:
1) Secure the funds necessary to complete the
construction and fit out of the facility;
2) Demonstrate reasonable expectations of sufficient
funds through leasing commitments, grants and/or an
endowment fund satisfactory to operate the facility
without debt;
3) Develop a five-year governance and long range
operating plan to the satisfaction of the Director
of the Office of Cultural Affairs; and
4) Secure the necessary development approvals and
permits.
The Dance Foundation has begun discussions with dance
organizations and individual choreographers to secure leasing
commitments for the building. A list of dance organizations
which are committed to the project is attached to this report
as Appendix B.
FINANCIAL IMPLICATIONS
The recommendation of this report is that Council agree to
withhold the subject site from disposal or alternate use for
a period of up to three years to enable the Dance Foundation
to raise the necessary funds for its proposed development and
to meet the other related conditions outlined in this report.
Further, it is recommended that once the conditions of this
agreement are met, the City lease the subject site to the
Dance Foundation for a period of 60 years at a prepaid lease
of $1.
When Council approved the previous site commitment, staff
proposed a series of options with respect to the payment of
the PEF. As the commitment to enter into a lease was several
years away, the decision on how to fund the proposal was left
to the Council of the day to be considered in the context of
the property's market value and of the resources available at
that time.
Given the time-frame in which the Dance Foundation is now
operating, they will be returning to Council for a lease
consideration within the next three years. If Council is to
commit to the proposal in this report, funding should be
identified at this time from the existing capital funds or
from the 1997-1999 Capital Plan.
The 1994-1996 Capital Plan included $4.3 million for social
service and cultural initiatives. Funding of $2.5 million has
been allocated to the Capital Budget, with the balance of $1.8
m. to be allocated in 1996. The cultural component of this
funding is $1.3 million and includes Public Art and Capital
Grants programs. Much of this funding has been committed to
specific projects; however, Council has the option of
reallocating the uncommitted portion of $1.2 million in
unallocated social services capital funds.
The Director of Community Service notes that the uncommitted
funds in the 1994-1996 Capital Plan were proposed for several
social service facilities including childcare facilities and
the redevelopment of a neighbourhood house. However, staff do
not believe that these projects will be ready to proceed
within the context of the current Capital Plan.
Another option would be for Council to approve funding for
this project in advance of the 1997-1999 Capital Plan, with
financing by way of an advance from Revenue Surplus. However,
in committing funds from the next Capital Plan it should be
noted that this allocation of $1.2 million represents 100% of
the cultural funding which was provided in the 1994-1996
Capital Plan. Based on this allocation, approval of this
funding may limit the availability of funds for other cultural
priorities in the next Capital Plan.
Payment Option #1
In accordance with Council policy established in June of 1993,
the Director of Finance recommends that the property be
transferred to Capital assets when lease negotiations are
concluded, and that the PEF be reimbursed for the full market
value of the site as determined by the Manager of Real Estate
Services.
Further, the Director of Finance recommends that the
uncommitted social service capital funds from the 1994-1996 be
identified as the source of funds to repay the PEF for the
subject site.
Should one of the social service projects previously provided
for in the 1994-1996 Capital Plan present itself in the
remainder of this year, it will be addressed in advance of the
1997-1999 Capital Plan, with financing by way of an advance
from Revenue Surplus.
Payment Option #2
The Director of the Office of Cultural Affairs recommends that
Council consider this site request in a manner consistent with
Council policy on leasing Social Housing sites from the PEF
where the PEF is reimbursed at 75% of the current market value
for a 60 year prepaid lease. At the end of the 60 year term,
the site and the building reverts to the PEF.
As with the previous Dance Centre report, the Manager of Real
Estate Services has established a fair market value for a 60
year prepaid lease, now estimated at $900,000 for the subject
site.
Should Council approve this option, OCA staff recommend that
the uncommitted social service funds in the 1994-1996 Capital
Plan be reserved as the source of funds to pay the PEF for a
prepaid lease at such time as the Dance Foundation has met all
of the terms and conditions outlined in this report, and the
Council of the day considers their lease agreement.
The Director of Community Services supports this proposal
noting that the social service projects which were to be
supported in the 1994-1996 Capital Plan, while unlikely to
come forward within 1996, are still active and these
allocations will be carried forward to the 1997-1999 Capital
Plan.
CONCLUSION
Staff believes that the Pacific Boulevard site offers the best
available opportunity for a dance centre at this time and
recommends that the City withhold the site from disposal or
alternate use for a period of three years; and, subject to
the Dance Foundation fulfilling the conditions outlined in
this report to the satisfaction of the City Manager, that
Council approve in principle a lease of the subject site to
the Dance Foundation and recommend to the Council of the day
that this lease be provided for a term of 60 years at a
nominal rate ($1); and, further, that funds from the Capital
Plan be used to repay the PEF as outlined in one of the above
options.
* * * * *