VANCOUVER –A $30-million philanthropic gift from an anonymous wealthy couple is allowing the City of Vancouver to reopen Taylor Manor as a home for 56 street people with complex mental health issues.

Over the next two years the city will also pour up to $10 million of public money into a $14 million renovation and expansion plan for the 1915 Tudor Revival-style heritage mansion located on Boundary Road near Adanac Park. The rest of the capital funds will come from the Streetohome Foundation, Vancity Credit Union and other donors. The renovation includes the addition of a three-storey annex, community garden, kitchen and dining facilities and program areas.

The contribution of the elderly Vancouver couple will allow the home to operate completely independent of ongoing government support. The donors’ gift will run through a separate foundation and underwrite the $900,000 annual cost of operating Taylor Manor.

“This is an unprecedented donation of what I believe is the largest donation in the city’s history to our effort to end homelessness,” Mayor Gregor Robertson said.

The city announced the plans Friday against the backdrop of the decrepit, but still striking mansion, first built by the city as “The Old Peoples’ Home” and renamed in 1946 after eight-term mayor, Louis D. Taylor, who died in poverty at the age of 88.

Until 2000 the mansion was a long-term care facility, but was shut down when residents moved to the adjacent Adanac Park Lodge, which is operated by Vancouver Coastal Health.

Still owned by the city, it has played a role in B-grade movies and served as an occasional training facility for police. Periodic attempts to renovate it for seniors housing have failed, the most recent in 2003. Now it will become a semi-permanent home for people with mental health and addiction issues who have been living on the street.

The benefactors’ unusual offer to completely underwrite the operating costs of a new supportive housing facility appears to have made the project possible. Their gift leveraged money out of the city to renovate the building, as well as $1.4 million from Streetohome through a gift from Vancity, and another $200,000 from another group, the Carraresi Foundation.

When Taylor Manor is finished in about two years, it will be operated by the Kettle Friendship Society.

The project comes as the city’s efforts to stem the tide of homelessness have faltered. Robertson’s Vision Vancouver party made a pledge in 2008 to eliminate homelessness by 2015. He later modified the goal to end “street homeless.” Last year, 154 people were catalogued living on the street. But a new count in March showed the number had almost doubled again to 306, and city staff say the situation will worsen by 2014.

“We have had tough news over the past couple of months seeing our street homeless numbers bump back up,” Robertson said. “We really have to redouble our efforts … and Taylor Manor is a key piece of that strategy.”

Coun. Kerry Jang, a University of B.C. professor of psychiatry who specializes in mental health issues and is the city’s representative on housing and homeless issues, was nearly moved to tears by the donors’ largesse. He said he and city staff, including Judy Graves, the coordinator specializing in dealing with the homeless, have sometimes despaired at trying to solve the complex, interwoven issues of homelessness, addiction and mental health.

“It is a bit of an emotional moment for me, simply because for many years Judy and I and many of our staff have been out there and we see the suffering every single day. And every day I feel hopeless because what can we do? We put [people] into hospital for a while and they are let back out on the street again with no hope. It is just a revolving door, a revolving door, a revolving door,” he said.

“Taylor Manor is fundamentally different. Taylor Manor provides that hope, that place of belonging, that place of care. It is like when you come home from a long trip and you come in through the front door and sit down on the couch and breathe ‘I’m home.’ This is the vision of our donors and one that I am so glad to help bring forward.”

The donation firmly puts the city back in the business of directing housing for seniors and the poor. In recent months the city has complained that BC Housing was not placing enough homeless people in new units built on land provided by the city but funded by the province.

In this case the city’s housing department will help decide who is admitted to Taylor Manor, Robertson said.

The province is interested in participating in Taylor Manor, but it won’t be asked for operating funds, he said.

The project still has to go through a rezoning application this fall, with a public open house for neighbours set for July 12. But the city’s announcement Friday leaves little doubt that the project will go ahead regardless of public views.

The benefactors underwriting the operation were present for the announcement and looked on without emotion. The city asked that their wishes for anonymity be respected.

Jang said the circumstances behind their gift were both unusual and complicated. He said the pair called him up out of the blue two years ago after they read about the city’s growing homelessness problems. They offered to help but were very particular about what they wanted to do. “They were really smart cookies and they had done their homework,” he said.

Unlike other philanthropic gifts to help the homeless, which usually go to capital costs, the benefactors categorically insisted that their money should underwrite the annual operating costs of the facility, he said.

Jang said he and Graves took the couple around the Downtown Eastside to see how non-profit housing works. They also met and had dinner with a number of homeless people. Through all of that, the couple formulated a plan to provide a gift in perpetuity through the endowment of their $30-million fund.

“We told them the way the city does things, that we use donations for capital, but they just ground us down,” Jang said with a smile. “It was the most unusual gift I’ve ever seen, and we had to create a new legal structure for this to work.”

Jefflee@vancouversun.com

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