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The gallery will have to raise 75 per cent of the construction budgetbefore development permits are issued.

Darryl Dyck/The Globe and Mail

Discussion about the possibility of building a new Vancouver Art Gallery went before council on Tuesday, with city staff laying out why they believe in the project.

"This is a very big day for arts and culture in the city," city manager Penny Ballem told the mayor and councillors.

In separate presentations, city staff and Vancouver Art Gallery officials detailed a long process – which began with the identification of the need for a new art gallery back in 1998 – and explained some of the steps taken in the two years since council voted to reserve two-thirds of a block of city-owned land for the VAG.

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A city review examining two sites – 688 Cambie (also known as Larwill Park, which is now a parking lot) and the downtown Canada Post office – found that giving the VAG the land for a purpose-built gallery, rather than spending the money to buy the post office, would be the better option. As part of the process, the city also met with local cultural and business leaders, as well as a panel of national and international experts.

"What we really heard from the arts community here is that this was going to launch Vancouver into a new era and absolutely raise our profile internationally, was going to support and raise the profile of all the arts in the city, and that this was a signature project that will change Vancouver forever," said Richard Newirth, the city's director of cultural services.

Council asked about the gallery's ability to finance the project, estimated at $350-million (including building costs and an endowment). Under the conditions set out by the city in order for the VAG to earn a 99-year lease, $100-million of that is supposed to come from Ottawa, and the province is to provide $50-million, in addition to the $50-million it provided in 2008. The city has set a deadline of April 30, 2015 for the VAG to demonstrate that there is a "clear commitment" by the two levels of government to provide the funding. If that money comes from the private sector instead, the city has indicated that that would be aacceptable.

A spokesperson for federal Heritage Minister James Moore has told The Globe and Mail that a multimillion-dollar contribution from Ottawa "is not something our government can afford."

To that, Bruce Wright, chair of the VAG's board of trustees, said: "I don't think that we can take any comments that are made right now, in absence of a formal proposal, as any kind of determinative answer to this."

On the question of provincial funding, councillor Adriane Carr asked during the council meeting if the VAG was planning to make this an election issue. Mr. Wright said no: "We don't have a strategy to work the politics that way. Our strategy has always been: secure the site, show what we want to build and then make a strong case to our levels of government and I don't think we're interested in playing politics on this at all."

Council will continue with the issue on Wednesday afternoon, with more questions from councillors and delegations from the public before they vote on the issue.

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