Performing Arts Lodge - Vancouver

Case Studies / Space profiles

Performing Arts Lodge - Vancouver

Space Profile

  • Name of Space: Performing Arts Lodge (PAL) Vancouver
  • Society Mission: "To provide long-time members of Vancouver’s performing arts professions with affordable housing within a vibrant and creative community setting."
  • Owner – Land and Airspace Parcel: City of Vancouver
  • Owner – Building / Improvements: Performing Arts Lodge Vancouver
  • Rent/Lease/Own: Land Airspace Parcel is leased. The building/improvements are owned.
  • Address: 300-581 Cardero Street, Vancouver, BC, V6G 3L3
  • Square Footage: 90,000 sq/ft; 99 units of social housing and 12 life-lease suites, 1600 sq/ft performing arts rehearsal/presentation space, outdoor gardens and amenity space
  • Year Opened: 2006
  • Space/Facility Type: Residential Non-Market Housing, Multi-Functional
  • Organizational Type: Registered Not-For Profit; Registered Charity
  • Space/Facility Use: Arts/Culture, Non-Market Housing
  • Programs/Services Delivered: Founded by artists for artists, the Performing Arts Lodge (PAL) building on Cardero Street provides safe, affordable homes for a vibrant community. Safe, affordable housing goes well beyond simple physical well-being. Wrapped in a supportive creative community, makes PAL unique: it has the power to liberate and inspire.
  • Website: www.palvancouver.org


Case Study

Synopsis
Concept & Need
Partnerships & People 
Timeline & Steps to Realization
funding & financing
Operations & Tenanting
Impact & Lessons Learned

 

Synopsis

The Performing Arts Lodge (PAL) Vancouver is a unique social housing facility, providing aging performing artists and those with disabilities the space and community they need to stay creative, engaged and connected[1]. PAL Vancouver consists of 99 units of social housing, 12 life leases and a 1600 sq/ft performing arts rehearsal/presentation space—the PAL Studio—which is used by residents and other cultural and community groups for community programming and performances. Included in the 111 units are 12 life-lease suites that were fundamental to the financing of the project. PAL Vancouver opened in 2006 at nearly full-occupancy and currently operates a rental mix of 65% Rent Geared to Income, and 35% Near-Market prices. Over 100 people are pre-qualified and on PAL Vancouver’s waitlist.

 
 

Concept & Need

The vision for the Performing Arts Lodge (PAL) Vancouver was to create an affordable and safe living environment for seniors from the performing arts sector who otherwise could not afford market rents in Vancouver.  Jane Heyman and the late Joy Coghill, leaders in the performing arts community, observed that when people from the sector retired, they often did not have pension plans or enough savings to find secure housing.  In April 2001, 40 people attended a founding meeting to explore the possibilities of a PAL Vancouver, and whether to steer their own project or partner with Performing Arts Lodges Canada. Jane and Joy, who became the co-chairs of PAL Vancouver, understood that if they partnered with PAL Canada (started in Toronto in 1993), they would be able to point to a successful model that includes eight chapters across the country.[2]  Through visioning sessions with community members, overlapping interests were identified that included: the space had to be for people working in or retired from the performing arts; the site needed to be in the downtown area of Vancouver; residents should be able to have pets; and that there would be options for some kind of rehearsal/performance space and outdoor garden amenity.
 

 "If you create housing for people that share a common passion, and you [locate] them in proximity [to one another], they will start to create, and will …be healthier for it."

 Jane Heyman, former Co-Chair PAL Vancouver

 

 

Partnerships & People

The vision of PAL Vancouver started with Jane Heyman and Joy Coghill, but as respected artists with strong connections in their communities, the pair were supported by a number of people of varying experience and influence in project development.

PAL Vancouver event on rooftop garden
Photo Credit: Terrance Thomas

 

Cameron Gray - former Director of Housing with the City of Vancouver, and Tony DuMoulin - Past President and Advisor to the Steering Committee, are credited as two key people that contributed to the realization of PAL Vancouver.  Specifically, Cameron for eventually believing in the vision to find creative solutions to house seniors in the performing arts and Tony for his skills in real estate law. John Vance is also credited for being an imaginative thinker in his role as PAL Vancouver’s Social Housing Consultant. Additional key partnerships of importance included Peter Oberlander - Advisor to the Steering Committee; Phil Boname - Past President of PAL Vancouver; Keith Martin Gordey - Past President of PAL Vancouver and Treasurer for the Union of BC Performers; Terry Kelly - Actor; Harry Hawthorn – Architect Advisor; as well as a number of people still residing in the PAL Vancouver building. All of the aforementioned people were part of the PAL Vancouver Board of Directors.

Carole Taylor and Art Phillips (former Councilor and Mayor of Vancouver) were also instrumental in creating an organization that campaigned for social housing in Coal Harbour on behalf of PAL Vancouver. What would essentially be referred to as a ‘YIMBY’ organization today, this campaign worked to change public perception in support of the positive and necessary benefits of social housing.

 

Timeline & Steps to Realization

At the time, no senior government funding was available for the project, thus PAL Vancouver needed to ensure they had the capacity to raise the equity required for the project to be viable and generate the necessary affordability for residents.[3]

Tony DuMoulin - Past President and Advisor to the Steering Committee, and John Vance - Social Housing Consultant, came up with the idea of using life leases as an equity-building tool for PAL Vancouver’s capital campaign. In order to own a life lease unit, the applicant had to make a $5,000 non-refundable deposit which was held in trust for the project, and a further deposit of 10% of their pre-payment amounts. This all had to be in place within 60 days of approval of the Memorandum of Understanding that PAL Vancouver signed with City of Vancouver to create the space. The life lease residents also pay a monthly charge to cover their share of the costs of maintenance.[4] The life lease lasts for as long as the PAL Partner resides at PAL. On the expiry of their term or should they move or pass away, the life lease unit is returned to PAL Vancouver, in exchange for which, PAL Vancouver pays the life lease Partner the same 10% pre-payment amount initially deposited. Although PAL repays deposits at the expiry of the terms, any gain in equity stays with the PAL upon re-lease.

On November 7, 2003, Vancouver City Council selected PAL Vancouver as the sponsor/tenant for the Bayshore Gardens' affordable housing space.[5] On May 29th, 2006, PAL Vancouver opened its doors.

Performing Arts Lodge – Timeline

Concept/Idea: 2001
First Board Meeting: 2002
PAL Vancouver selected as Building Tenant: 2003
Request for Proposals[6]: 2002
Memorandum of Understanding[7]: 2004

Construction: 2004
Final Transfer of Building Funds by PAL Vancouver: 2006
Move-In: 2006

 "[PAL was a huge] project but we never felt it would [not] happen. Speaks to the approach of people in the performing arts - when someone says ‘no’ in an audition, you adjust and just keep going because there’s a timeline. You sometimes adjust 20 times before you get an answer." Jane Heyman, former Co-Chair, PAL Vancouver

 

Project BUdget

PAL Vancouver and Bayshore Gardens Developments Limited Partnerships (BGDLP) entered into a binding Development Agreement that addressed the specifications for the Building Project, and all aspects of its development and construction, including costs, change orders, final inspection and schedule. The Development Agreement includes the drawings and specifications prepared by the Architect and agreed to by BGDLP and PAL Vancouver for the construction of the Project.[8] The final Building Project cost was $17,200,000.[9]

PAL Vancouver’s ability to raise capital (12 life lease deposits totaling $60,000) was instrumental to gaining confidence from the City of Vancouver that the organization was suitable for being the operator and sponsor of the project.  In addition to a $10,500,000 mortgage[10]  with Great West Life Assurance, PAL Vancouver’s capital campaign total of $6,771,020 was comprised of the following:

Revenue:
  • $1,000,000 - City of Vancouver (matching grant)[11]
  • $386,000 - BC Housing
  • $250,000 - Canada Mortgage Housing Corporation
  • $735,000 - Performing Arts Unions & Professional Associations
  • $3,144,000 - PAL Partner Life Leases (includes $60,000 in deposits)
  • $667,926 - Personal Philanthropy
  •  $429,000 - Foundations
  • $159,094 - Special Events
  • $10,500,000 - Mortgage
  • $17,271,020 - Total Revenue
Expenses:
  • $10 – Nominal City of Vancouver 60-year lease of land and airspace parcel
  • $3,404,492 - building improvements soft costs
  • $13,345,508 - building improvements hard costs
  • $521,010 - miscellaneous
  • $17,271,020 – Total Expenses 


Operations & Tenanting

PAL Vancouver’s rental mix in 2006 was 80% (Rent Geared to Income[12]) and 20% (Near-Market Rate) which proved to be a challenging rental mix to operate. Similar affordable housing projects for seniors generally operate on a 60/40 rental mix – 60% (Rent Geared to Income) and 40% (Near-Market) providing higher operating dollars through the near market rentals. PAL Vancouver, through a slow process of attrition over the years, is moving towards that 60/40 rental mix. However, the operational benefits of moving to this mix are tempered by an understanding that people on the waitlist[13] who are waiting for the Rent Geared to Income suites will be impacted by the decreasing availability of these particular suites. As of 2017, PAL Vancouver’s rental mix is approximately 65% (Rent Geared to Income) and 35% (Near-Market[14]).

PAL Vancouver’s residences are comprised of:
  • 1 bedroom – 65 units at 600 sq/ft for $500 to $889 per month. These units are Rent Geared to Incomes of less than $35,000.
  • 1 bedroom – 34 units at 600 sq/ft for $1174 per month. These units are Near-Market (90% of Market Price) for incomes of greater than $35,000.
  • 2 bedrooms – 12 Life Lease units at 900 sq/ft. The original price of these units averaged $280,000.
  • There is also a $500 to $600 per month maintenance fee due to all residents.
The PAL Vancouver Studio Theatre is a fully equipped, 1600 sq/ft black-box theatre that seats up to 150 people.[15] It remains as the only live theatre venue in the Coal Harbour area suitable for performing arts rehearsals and presentations. The Studio Theatre is an important part of the PAL community as well as a revenue generating asset.  In an effort to maximize revenues from the Studio Theatre, PAL Vancouver accessed technical advice through support of Vancity Credit Union, and is working to update the theatre as well as create a marketing plan to increase use of the rehearsal/performance space.
 

 "[PAL Vancouver is made up of] people in the performing arts from all walks of life - on stage, behind the scenes, film editors, people who have worked in administration in performing arts. [Prospective tenants] need to show a ‘long history of professional performing arts’…" Gary Glacken, Executive Director, PAL Vancouver

 

Impact & Lessons Learned

The lessons learned for PAL Vancouver are many.

First, that a group of artists undertook a major social housing capital project, and delivered a unique, valuable social purpose real estate asset. Through PAL Vancouver’s leadership, performing artists and the community at large are the beneficiaries of needed housing and community space, centrally-located, in downtown Vancouver.

The second learning is reflective of being a housing operator selected for a project but not being an actual project partner. PAL Vancouver would have preferred to be a partner in the development with much greater opportunity to influence the physical outcomes. However, as is this case for many affordable housing providers in Vancouver, project developers are required to deliver on certain City objectives: the aim of the Bayshore Gardens was to create mixed income communities along Coal Harbour. PAL Vancouver was selected by Vancouver City Council to be the sponsor and operator of the PAL Vancouver component of the Bayshore Gardens development, and funder of some of the building improvements (effectively purchasing those pieces of the project from the Developer). This was the only viable option at the time16.

Partnering with a market developer is attractive because of the skills and knowledge brought to the project by a professional real estate developer including taking on the major capital risk of the project., In the case of PAL Vancouver, the building they received was negotiated with less input by their organization than PAL desired. Impacts of that lack of integration included lost opportunities to attract in-kind donations from suppliers with energy-efficient materials. As a lesson learned, PAL Vancouver would encourage other organizations in similar situations, to prioritize the use of energy efficient building solutions as well as long life appliances and furnishings—noting the impact this has on long-term sustainability.

In addition, PAL Vancouver was caught in a mortgage that did not allow accelerating payments or lump sum payments to the principal without incurring penalties. More recently PAL Vancouver was able to renegotiate their mortgage, which has had a substantive positive impact for the nonprofit society. Planning ahead for the transition from capital to annual fundraising would be another piece of advice PAL Vancouver would offer to groups considering such a project.

PAL Vancouver Board of Directors and Advisors
Photo Credit: Vancouver Sun
 

Finally, in terms of the people involved, in creating a strong Board, PAL Vancouver found the investment of time in thoroughly and effectively educating those leaders was invaluable, especially around fundraising. By determining the skill sets needed on the Board from the beginning, PAL Vancouver strengthened their capacity to undertake the project in all aspects but most particularly, financial. PAL Vancouver also learned the value of working with professional advisors right from the outset, such as a social housing expert, enabling them to develop relevant policies and terms of reference in a timely manner.

© 2018 Social Purpose Real Estate Collaborative. Portions of this Case Study may be reproduced for research and educational purposes. Please credit: “Social Purpose Real Estate Collaborative www.socialpurposerealestate.net”  

SPre Case Study Interviewees:

  • Gary Glacken (GG) - Executive Director. Interviewed: July 14, 2017
  • Jane Heyman (JH) - former President of the Board. Interviewed: September 27, 2017

Works Cited

 

 

FOotnotes

 

1. PAL Vancouver (2014). About PAL. http://www.palstudiotheatre.com/about-pal/
2. PAL Vancouver (2014). Our Funding. http://palvancouver.org/about-pal/
3. Perfoming Arts Lodge - Bayshore Gardens (2004). Administrative Report, City of Vancouver. http://council.vancouver.ca/20040309/a15.htm
4. Perfoming Arts Lodge - Bayshore Gardens (2004). Administrative Repor. City of Vancouver. http://council.vancouver.ca/20040325/cs3.htm
5. RFP issued by the City of Vancouver to solicit the non-profit sponsor for the affordable housing component of the Bayshore Gardens Development.
6. PAL Vancouver, the City of Vancouver and Bayshore Gardens Developments Limited Partnerships (BGDLP) signed a Memorandum of Understanding dated January 1, 2004. It sets out the terms and under which BGDLP will design and build the Project, the price and terms under which BGDLP will sell the completed Project to PAL Vancouver, and the terms and conditions under which the City will buy the Parcel from BGDLP. Performing Arts Lodge - Bayshore Gardens (2004). Administrative Report. City of Vancouver. http://council.vancouver.ca/20040309/a15.htm
7. Perfoming Arts Lodge - Bayshore Gardens (2004). Administrative Report. City of Vancouver. http://council.vancouver.ca/20040309/a15.htm
8. Hard construction costs include all building costs, on and offsite servicing, parking and retrofit, theatre/amenity improvememnts, contigency, etc. Soft construction costs include architect and engineer fees, consulting fees, legal fees, surveying, insurance, municipal fees, etc.
9. Issued in 2006; 10 years; added 5 years in 2016. Note, in 2012, PAL Vancouver renegotiated its mortgage and completed a blend and extend which added 5 years on to an initial 10-year mortgage but reducted the interest rate, saving the organization a substantial $94,000/year.
10. Matched by funding from BC Housing and additional fundraising undertaken by PAL Vancouver.
11. The Rent Geared to Income policy for PAL Vancouver is no more than 33% of income. Qualified applicants must have proof of former membership in a perfoming arts union, association or guild.
12. Currently there are 100 people pre-qualified to live at PAL which means they have already applied, been screened, and are now on the waitlist. Wait times are increasing though because of the changes to the rental mix. Ideally, 30 people will be taken off waitlist for the proposed Performing Arts Lodge in New Westminster.
13. Near-market suites ($1440/month) are rented out to those who are still working [in the profession]
14. PAL Studio Theatre (2014). Rental Features. http://www.palstudiotheatre.com/rental-features/#prettyPhoto
15. Perfoming Arts Lodge - Bayshore Gardens (2004). Administrative Report. City of Vancouver. http://council.vancouver.ca/20040309/a15.htm