Share this Story: Vancouver votes to expropriate two derelict Downtown Eastside hotels for $1 each
Vancouver votes to expropriate two derelict Downtown Eastside hotels for $1 each
The move comes after a lawyer for the property owners warned the city it is exposing itself to by expropriating them for $1 each.
Susan Lazaruk
Nov 07, 2019 • November 7, 2019 • 3 minute read • Join the conversation
The Balmoral Hotel, in the 100-block of Hastings Street, Thursday, October 31, 2019. Photo by Jason Payne /PNG
Vancouver city council has voted to expropriate two of the Downtown Eastside's most notorious low-income apartment buildings, despite a threat of a lawsuit.
The mayor and councillors, with two abstentions, backed a staff recommendation to pay the Sahota family $1 each for the derelict Balmoral and Regent hotels near Main and Hastings because of the estimated $86 million renovation bill.
Vancouver votes to expropriate two derelict Downtown Eastside hotels for $1 each Back to video
Expropriations are usually done when the city needs a right of way for a common good, such as for transit. Deputy city manager Paul Mochrie said expropriating buildings under these circumstances was unprecedented in Vancouver. But he said it is legal, though subject to a judicial review within 30 days.
After listening to 30 speakers, mostly residents or housing advocates supporting the expropriation — a tearful Coun. Jean Swanson put forward the motion to accept the staff recommendation.
"We desperately need shelter rate housing and not $750 a month housing," said Swanson, adding the city needs to safeguard social housing at the $375 a month welfare housing rate for its 2,000 homeless citizens.
Pictured is the front door of the Balmoral. Photo by Jason Payne /PNG
The two buildings were condemned and closed by the city for safety and code violations in 2017 and 2018, and several speakers spoke from first-hand experience of how the suites had mostly lacked heat, hot water and electricity and were plagued by mould, bugs, rats and structural deficiencies. The Sahotas racked up bylaw infractions before the closure and reportedly paid $150,000 in fines last year.
Staff told councillors the owners had been offered $3 million, based on B.C. Assessment figures, for each of the buildings but got no response.
So they opted for expropriation route and came up with the $1 apiece figure based on the amount of work needed to make the single-room suites habitable — an estimated $46 million for the Balmoral and $40 million for the Regent.
Two owners, Pal Sahota and Gudy Sahota, were on the list of speakers on Wednesday but neither appeared.
Their lawyer, Evan Cook, urged councillors to abandon the expropriation or "risk considerable litigation."
He said the Sahotas had received several "arm's-length" offers of between $7 million and $12.5 million per building, so the city's earlier $6 million offer "wasn't worthy of a response."
He said there was "no obstruction" by the Sahota family in dealings with the city. "They just wanted to be paid market value," he said.
Pictured is former Balmoral resident Jonathan Hall, 47. Photo by Jason Payne /PNG
Two of the speakers addressing council said they represented interested buyers who offered to pay more than three times the city's $6 million offer.
Lisa Giesbrecht of the Heritage Charitable Foundation, formed this year on behalf of unnamed philanthropists who want to invest in social housing, had offered to pay $20 million if the city dropped its bid to expropriate.
She didn't have an estimate on what the renovations would cost but the investors had plans to make all the single-room occupancy suites livable again by next year, based on a business model used in two other SRO hotels they run on the DTES.
Gwendoline Allison, who represented the husband and wife owners of another single-room occupancy hotel in the DTES, said they offered to pay $19 million for the two hotels.
Allison said the couple had plans to keep half the suites at shelter rates and rent the other half at market rates. They charge $750 a month for the market rate suites in their existing hotel, council heard.
Longtime housing advocate Wendy Petersen told council the city has a great opportunity to maintain social housing stock on the two sites.
"This proposal is the best news we have had in this area for a long time, so please expropriate the buildings," she said. "If the owners disagree on the price, let them battle it out in court."
With files from Nick Eagland