Vancouver Mayor Gregor Robertson stood at the podium at W2 in the basement of the Woodward's building Friday morning, talking about how creativity has shaped his life, and his work. There were photos of the mayor with Seth Rogen and Dan Mangan, a shot of him as a child behind a drum kit, and in his first rock band, which specialized in KISS covers and Lynyrd Skynyrd.

"Free Bird was always our closer," he told an appreciative, standing-room-only audience of 200 at Creative Mornings, a free monthly speaker series.

Here's what never came up at the feel-good event: two weeks earlier, the city issued an eviction notice to W2. The next week, W2's staff was laid off. The café, losing money faster than you can say decaf non-fat cappuccino, had already shut its doors earlier this fall, and laid off its entire staff.

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With concerns that the mayor's presence would spark a protest – and there were indeed rumblings – there was talk of moving Friday's event, according to sources. But, assured all would be well, organizers and the mayor's office went ahead with it. Just in case, there were undercover police officers in the audience.

While the mayor told the audience about how he tapped his own creativity in establishing Happy Planet (originally called Creative Juices) and in running the city, upstairs Sid Tan, director of the W2 Media Café board, was meeting with representatives from the Canada Revenue Agency about W2's troubles.

"The city never wanted us in there to begin with. We had to fight for that space and now that we haven't been an instant success – and I don't know what they're basing that on – they're trying to get it back," a beleaguered Mr. Tan told The Globe and Mail. "While the mayor is at W2 making speeches and having photo ops, his staff is trying to evict us."

W2 is a community arts centre in the Downtown Eastside, dreamed up in 2004 as a hub meant to encourage innovation and creativity, in a transforming area of town that could really use a boost. Two years later, city council awarded the organization the community space as part of the new Woodward's development. The artist-run organization finally moved into Woodward's last year.

Spread over three floors, W2 has consisted of a basement studio space, a main-floor café, and second-floor offices and meeting rooms. The basement space is used by community groups, artists and others, ranging from Occupy Vancouver to Toastmasters.

Run by a group of volunteer directors such as Mr. Tan, W2 is provided the space by the city rent-free, but is supposed to pay an annual amenity fee – similar to a Strata fee – of about $85,000. It has not paid that.

A few months ago, the city met with W2 to negotiate the terms of a 20-year lease, including the amenity fee. Then on Nov. 23, with one day's notice, the board was called to a meeting at city hall. That's when the eviction notices were issued.

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The notices gave W2 until Dec. 31, 2012, to vacate the main-floor café, and until Feb. 28, 2013, to vacate the basement and second-floor spaces. (There was a separate notice for each floor.) Mr. Tan says he's been told the City has agreed to stay the Notice of Eviction for 90 days, but he isn't sure if this means they now have until the end of February or March, 2013.

W2 board chair Dethe Elza said he is also "a little unclear" on the deferral. "We've had an ongoing discussion with the city for a long time that didn't always go well. It's on better footing now," he said. "The city's been really good with working with us. We have to come up with a plan for the city that we can follow through with."

W2 is now restructuring, suspending some programs in addition to laying off its staff. "We've had an extreme budget crisis. We're in a bad financial situation," said Mr. Elza. "It's an arts centre run by artists and people in the arts. Mistakes have been made and as a board we really need to step up our game and take our jobs more seriously."

Asked what mistakes he was referring to, Mr. Elza wouldn't provide specifics, but said, "We've been much better at helping others than helping ourselves."

In an interview Friday afternoon, Mr. Robertson said he too was unsure of the deadlines W2 is facing. "I don't know the latest. I know there's lots of back and forth now to figure out a way forward and ensure we have a vibrant hub there," he said. "W2 has been a great concept, but a challenging business model."

The city's general manager, community services, Brenda Prosken, was not available for an interview by deadline on Friday, nor would anyone from the city who knew details of the eviction notices speak to The Globe about the issue. But Ms. Prosken did issue a written statement about the situation with W2.

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"The board of W2 has indicated a need for an economic and organizational renewal. We support the move in a new direction that provides a sustainable model to serve the organization and community. We are reviewing their tenancy with them and have invited them to come forward with a new proposal," read the statement, in part.

When asked how he feels about yet another cultural organization failing in the city under his watch – in the same year as the Playhouse Theatre Company and MusicFest Vancouver – Mr. Robertson said the city has suffered some unfortunate losses, but has also seen great successes.

"There's always a churn of organizations and businesses coming and going and even venerable institutions like the Playhouse Theatre have their lifespan. And it sucks to lose great organizations that inspire the community for decades, but we've got many new arts and culture organizations emerging and succeeding at the same time. It's a very dynamic community."