Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

Director of the Housing Centre and
Director of the Office of Cultural Affairs, Social Planning

SUBJECT:

City Lease of a Low-Income Artist Live/Work Studio
in a Market Development at 428 West 8th Avenue

 

RECOMMENDATION


GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

At its meeting of May 8, 1989, Council approved the following community development objectives as the basis of its social housing policy: (1) Foster the social development of Vancouver as home to a wide variety of people with many different racial, ethnic and cultural backgrounds, and social and economic lifestyles; and, (2) Facilitate the provision of a broad range of housing forms and shelter costs to meet the housing needs of existing and future Vancouver residents of all backgrounds and lifestyles.

At its meeting of November 17, 1993, Council approved the Vancouver Arts Initiative (VAI) which recommended, in part, that the City seek non-market solutions through zoning and building code provisions to address the need for affordable artist live/work studios.

At its meeting of June 6, 1995, Council approved the CityPlan Directions for Vancouver which included, in part, the direction that the City use incentives to encourage the private sector to provide lower cost housing, or to require a percentage of new units to be more affordable.

PURPOSE

This report seeks Council approval for the City to lease an artist live/work studio for 15 years, at no cost to the City, from the Intergulf Group of Companies (the developer) or the strata owner if the studio is sold. Terms and conditions of sublease to a qualified artist must also be approved.

BACKGROUND

At its meeting of April 21, 1997, the Development Permit Board approved an application to develop a 9-storey mixed-use market project at 428 West 8th Avenue. The project, located at the southwest corner of 8th and Yukon, will provide 6,000 square feet of retail and office space on the ground floor, 81 artist live/work studios on the second to ninth floors, and two levels of underground parking. A condition of development permit approval was that one (1) artist live/work studio be leased to the City for 15 years at no cost to the City.

On October 14, 1997, a Section 219 Covenant and a Priority Agreement were submitted for registration at the Land Title Office, under numbers BL349513 and BL349514, respectively. The Covenant prohibits use of the site for any purpose, including residential use, and prohibits application to the City for an occupancy permit, until the lease of the studio to the City is fully registered. The Priority Agreement ensures that the City's Covenant has priority over the mortgage and the assignment of rents registered on title.

Appendix A is a map which shows the location of the site.

THE STUDIO

The studio offered for lease to the City by the developer is Studio #223 (the "Studio"). It is a single-level artist live/work studio of 520 square feet, including 30 square feet of in-suite storage, located on the second floor of the building facing the lane. The Studio opens onto a patio of about 175 square feet with secured access from the lane. An advantage of the Studio's location is its proximity to the project's shared artist workshop on the same floor.
Appendix B is the second level floor plan of the building which identifies the Studio.

LEASE TERMS

Lease of the Studio would be for a term of 15 years, commencing 30 days from the date of issuance of an unconditional occupancy permit for the building, at no cost to the City. The developer and/or strata-title owner is required to finish and equip the Studio to the same standards and specifications as the other artist live/work studios in the building.

The developer/strata-owner of the Studio would be responsible for collecting the monthly rent from the artist tenant selected by the City, for maintaining the Studio in a satisfactory state of repair, and for paying the strata fees and property taxes for the Studio.

The developer/strata-owner would charge the artist tenant a rent of $325 per month, which is the GAIN shelter allowance for single persons, plus utilities including hydro, telephone and cable. Should the artist tenant have a vehicle, the owner would make the parking stall associated with the Studio, available to the tenant at no extra cost. Otherwise, the owner would rent out the parking stall at market rates.

The Studio would be occupied for a maximum non-renewable term of 3 years by a low-income Vancouver artist with a gross annual income not to exceed $19,500, selected by the City. At the monthly rent of $325, this income cutoff ensures that the artist occupying the Studio would be paying at least 20% of his or her gross monthly income toward rent.

A call for expressions of interest would be made by the Office of Cultural Affairs through various cultural organizations and artistic venues in the city. These would include the Vancouver Cultural Alliance, the Association of Artist Run Centres, Panorama, the City's Public Art Newsletter and other appropriate publications. Interested artists would be required to demonstrate financial need as well as artistic merit.

Tenant Assistance Program (TAP) staff at the Housing Centre would income-test artists responding to the call. Artists who satisfied the income criteria, would be evaluated by a jury of peers who would choose the best candidate based on his or her artistic credentials. The jury would be administered by the Office of Cultural Affairs in a similar manner to that for the City-owned artist live/work studio at 272 East 4th Avenue in Mt. Pleasant.

Appendix C is the Letter of Understanding which summarizes the terms of lease between the City and developer/strata-owner.

FINANCIAL IMPLICATIONS

The Studio and one parking stall at 428 West 8th Avenue have been secured by the City as a condition of development permit approval that allowed a relaxation of two loading spaces in the development. The Studio would be finished and equipped to the satisfaction of the Director of the Housing Centre in consultation with the Director of the Office of Cultural Affairs. No capital costs directly or indirectly associated with development of the Studio would accrue to the City.

The Manager of Real Estate Services estimates that at market rates the Studio would generate approximately $6,500 in annual revenue. At the proposed GAIN rent of $325 per month, the Studio would generate a total annual gross revenue of $3,900 per year. The difference between the market rent and the GAIN rent is $2,600 which is the annual subsidy provided by the developer. Over the 15 year term, the present value of the subsidy is about $23,000 which is justified in view of the cost savings accruing to the developer by the Development Permit Board reducing the number of required loading spaces by two.

The extra staff costs associated with selection of an artist tenant for the Studio every three years will be minimal and can be absorbed within the current budgets of the Office of Cultural Affairs and the Housing Centre.

CONCLUSION

The mixed-use development at 428 West 8th Avenue provides an opportunity to secure an additional low-income artist live/work studio for 15 years, at no cost to the City.

The three-year term of the sub-lease proposed is long enough to be of practical value to an artist while at the same time sharing the benefit among 5 different artists during the 15 year term of the City lease.

Since there is considerable unmet need for low-income artist live/work studios in Vancouver, and all capital and operating expenses are to be borne by the developer/strata-owner or the tenant, Housing Centre and Cultural Affairs staff recommend that the City take advantage of this opportunity.

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