The city has given the Vancouver Art Gallery two years to come up with a solid plan to move to a vacant piece of land near the Queen Elizabeth Theatre. But the city is not offering the gallery the entire block, and warns further work remains before any project can proceed.

In a report released late Wednesday, city staff recommended approximately two acres of the land at 688 Cambie Street be reserved for cultural use including a potential new gallery. The rest of the site is being considered for office use.

The city says it recognizes that the gallery has "demonstrated substantive work and capacity towards a bold and forward vision of a new art gallery for Vancouver," and that it needs some confirmation from the city on the proposed site in order to move forward. But the city is asking for a review of the options for the VAG's expansion and/or relocation in order to confirm that the gallery should move and that 688 Cambie is the best site.

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The city is also asking the VAG to present a business case that "rigorously and transparently demonstrates the sustainability of a new Gallery at 688 Cambie" and development of "an inclusive space use and programming strategy that includes new partnerships and expanded community engagement." It is also asking for a demonstration of support from the arts community and the public; a review of the gallery's governance structure that clarifies city representation; and evidence of the ability to successfully raise funds.

While VAG officials have said it's too early to provide a dollar figure for the proposed building, estimates have suggested costs of approximately $350-million. The province has already offered $50-million. The gallery has asked that the city contribute the land, but the report notes the land carries a $40-million encumbrance - money lent for renovations to the Queen Elizabeth Theatre in advance of the 2010 Olympics.

When asked in Vancouver on Tuesday whether there would be anything in the coming federal budget for the proposed new gallery, the Minister of Canadian Heritage said there would not. "There will not be money for the Vancouver Art Gallery in this coming federal budget," said James Moore. "Frankly we haven't seen the plan or proposal yet."

The Vancouver Concert Hall and Theatre Society has also expressed an interest in that piece of land for a new theatre and concert hall, which would serve as the primary performance venue for the Vancouver Symphony Orchestra. The report says the gallery is a more viable project for that site, but that the theatre and concert hall proposal should continue to be part of the discussion.

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Nobody was available from the VAG to comment on Wednesday night.