City of Vancouver could expropriate ‘blighted’ hotels in DTES for $1 each

Vancouver's notorious Balmoral Hotel.
Vancouver's notorious Balmoral Hotel. Global News

Vancouver City Council is set to vote on expropriating a pair of notorious Downtown Eastside single room occupancy (SRO) hotels.

If approved, the city would pay just $1 for each building because of their terrible condition.

READ MORE: Owners of notorious Vancouver SROs fined just $150k over hundreds of violations

The Balmoral and Regent hotels, both owned by the Sahota family, were evacuated by the city for “life-safety” reasons, the former in June 2017 and the latter in June of last year.

The evacuations forced the city to find housing for about 300 low-income people.

Click to play video 'City of Vancouver files to take ownership of Balmoral and Regent hotels' City of Vancouver files to take ownership of Balmoral and Regent hotels
City of Vancouver files to take ownership of Balmoral and Regent hotels – Jul 30, 2018

Earlier this year,The family pleaded guilty to multiple bylaw charges related to hundreds of documented violations and deplorable living conditions, and fined about $150,000.

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The city offered to buy the buildings last summer, but says it was unable to negotiate a deal.

READ MORE: City of Vancouver files 60 charges against owners of “disgusting” Downtown Eastside SRO

Council then moved ahead with expropriation proceedings, which were delayed when the owners filed an appeal of the process. That inquiry application was rescinded in the spring, meaning the City can now move forward if councillors agree.

According to the city, the $1 valuation “is the result of the City’s appraiser considering a renovation scope and cost estimate provided by multiple sub-consultants.”

Property consultant reports commissioned by the City found each property actually carried a significant negative value, either if renovated — minus renovation and hazardous material removal cost — or if completely demolished.

READ MORE: Which is the worst single room occupancy hotel in Vancouver’s Downtown Eastside?

In the case of renovation, the Regent would have a value of −$17,840,000 and the Balmoral −$22,960,000. In the case of demolition the Regent would be worth −$100,000, and the Balmoral −$240,000, the consultants found.

Click to play video 'The Regent Hotel in Vancouver shut down' The Regent Hotel in Vancouver shut down
The Regent Hotel in Vancouver shut down – Jun 21, 2018

If council moves forward, it would also pay $1,000 to the leaseholder of the pub in the Regent.

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However, while the city would only pay $1,002 in direct costs to acquire the buildings, which have sat vacant since their evacuation, the total cost of acquiring them will be much higher.

READ MORE: City says Balmoral Hotel needs ‘significant amount of work’ to bring it up to code

Last summer, the city earmarked a further $350,000 for each hotel to secure them for up to three years.

The City says if it does expropriate the properties, it would work with BC Housing to renovate and transform them into self-contained social housing units, and develop a future operating model and funding to ensure the units remain affordable.

Council will vote on the expropriation next Wednesday.