Nelson city council has approved a five-year lease framework for the former Kootenay School of the Arts building, setting the stage for a new arts hub at 606 Victoria Street under the Nelson Community Land Trust Society.
Councillors voted in favour of directing staff to enter into a five-year lease agreement with the society, which includes a full rent subsidy for the first two years before transitioning to market rent ($20,000 a month) in years three to five.
The approved framework means the society will be responsible for operations, maintenance and major repairs over the course of five years, while the city will pay for insurance and bill it back to the tenant.
Council also approved a $150,000 capital budget for initial repairs to bring the building into leasable condition.
Chief administrative officer Kevin Cormack said the building requires significant work before it can be occupied.
“Unfortunately it has not been maintained to the standard we expected. And there’s some initial work. The roof needs repair. Some of the mechanical HVAC units need repair,” said Cormack, adding staff are still assessing the full extent of deficiencies.
He said preliminary inspections have already identified serious issues.
“There’s more work to be done to understand what the condition that mechanical system is. I guess, apparently even one unit had a fire in it that wasn’t reported to us. And I think two or three aren’t working properly,” he said.
Cormack said broader capital needs could climb even higher, noting a possible roof replacement could exceed $400,000 within the next two years.
The building has hosted arts programming for decades. Selkirk College operated its Kootenay Studio Arts program out of the site for years, but announced last year it was ending the program due to funding constraints.
The current lease with Selkirk expires at the end of 2026.
In wake of the closure announcement, the West Kootenay Regional Arts Council began exploring a pilot model for the site before shifting toward the current lease strcture with the land trust as the building operator.
According to a staff report, the arrangement is intended as a pilot to test the long-term viability of the site as a multi-tenant arts space, while activating a city-owned building that could otherwise remain vacant.
It said the lease structure, specifically the two-year rent subsidy, is designed to reduce the city’s financial risk.
“The intent of this period is to stabilize operations, undertake necessary improvements, and establish a sustainable operating model, while exploring longer-term options, including potential acquisition,” staff wrote.
The land trust plans to pursue grant funding and external financing to help offset some of the capital costs, though staff said in their report such funding is competitive and not guaranteed. The report also states that major upgrades such as HVAC and roofing work may require significant matching contributions and longer timelines.
The model is similar to previous arrangements for the building. Selkirk College was also responsible for major repairs depending on the lease structure.
Councillor Leslie Payne raised concerns about equity in the lease structure, particularly how it requires the new tenants to be responsible for major repairs.
“We’re leasing a building that we know we’re going to have to spend approximately $150,000 to bring up to a leasable standard and also a building that has not been adequately maintained over its previous tenancy,” said Payne.
“So it seems somewhat inequitable to me to then say that the new tenants in this possibly sound building are responsible for all major repairs. It sounds like a big cost for an organization starting out that we’re trying to give a hand up to create this amazing group in our town.”
Cormack responded that the structure is intended to protect the city from long-term financial risks.
Council overall supported the lease agreement, with Councillor Jesse Piniero saying it is a way to strengthen the town’s vibrancy.
“Thank God that there’s people in the community that feel strongly enough about this and advocate for this, that are going to do this work and step up and be the champions of the arts in this town,” said Piniero. “the risk to the city, honestly, from my perspective, is minimal,”
Councillor Kate Tate also emphasized the importance of preserving the city’s cultural vibrancy.
“I believe that it’s our responsibility to help to maintain that vibrant downtown for all of the other components of what makes one of the things that makes the city of Nelson great.”
The lease is expected to begin no later than Jan. 1, 2027, though there may be potential to speed up occupancy depending on negotiations with Selkirk College, which currently holds the lease until the end of 2026.
The agreement also includes an option to renew the lease after five years, with future terms to be negotiated between the parties.
The framework and capital budget were both approved. Also approved is a requirement for the land trust to report annually on the financial and operational results for what’s been dubbed the “606 Arts Space”.
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