ADMINISTRATIVE REPORT

Date: October 27, 1999
Author/Local: Yin Lee/7409
RTS No. 01096
CC File: 5104

CS&B: December 16, 1999

TO:	Standing Committee on City Services and Budgets
FROM:	Manager of Real Estate Services
SUBJECT:	Rent Review - Foreshore Lots in Stanley Park subleased to Vancouver Rowing Club

CONSIDERATION

A.1 THAT Council instruct staff to increase the rent from $2 per annum plus taxes to $23,814 per annum plus taxes for the period September 1, 1999 to August 31, 2004;

OR

A.2 THAT Council instruct staff to maintain a nominal rent of $2 per annum plus taxes and approve a grant in the form of a rent subsidy to the Vancouver Rowing Club for rental charges for the period of September 1, 1999 to August 31, 2004, in the amount of $23,812 per annum, or a total of $119,060.

GENERAL MANAGER'S COMMENTS

The General Manager of Corporate Services submits A.1 and A.2 for CONSIDERATION.

COUNCIL POLICY

Rent established below market rate constitutes a grant, and as such requires eight (8) affirmative votes from Council.
PURPOSE

This report seeks instruction from Council to establish the yearly rent for the two foreshore lots in Stanley Park subleased to the Vancouver Rowing Club.

BACKGROUND

The City has a 99-year lease of two foreshore lots in Stanley Park from the Federal Government which terminates on August 31, 2007 (see Appendix A). These lots have been subleased to the Vancouver Rowing Club (the "Club") since the turn of the century. Their rent had been nominal prior to the new lease approved by Council in 1988.

In January 1988, Council approved a 19-year sublease commencing on January 5, 1988 and expiring on August 30, 2007. The rent was initially set at a nominal amount of $2 per annum plus taxes for five years to offset the costs of leasehold improvements incurred by the Club. The annual rent was to be increased to market level on September 1, 1994 and every five years thereafter.

In September 1994, staff advised the Club that according to the lease, the rent was to be increased to $23,814 per annum plus taxes. At their request, a report was submitted to the Standing Committee on City Services and Budgets on October 4, 1994, to seek instruction from Council to either increase the rent to $23,814 per annum plus taxes or to maintain at $2 per annum plus taxes. Council decided on maintaining the rent at $2 per annum plus taxes.

CURRENT SITUATION

The annual rent was due for review on September 1, 1999. Staff have estimated the market rent to be $23,814 per annum plus taxes. Upon notification, the Club requested the City to maintain rent at $2 per annum plus taxes. Nominal rent is considered a grant, therefore, staff is submitting the request to Council for consideration and instruction.

NOTE FROM CLERK: ELECTRONIC COPY OF APPENDIX A IS NOT AVAILABLE -ON FILE IN THE OFFICE OF THE CITY CLERK.

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