Vancouver council votes to expropriate ‘blighted’ Downtown Eastside hotels for $1 each

City of Vancouver expropriates ‘slumlord’ hotels for $1 each
WATCH: City of Vancouver expropriates 'slumlord' hotels for $1 each

Vancouver city council has voted to expropriate a pair of “blighted” single-room occupancy hotels in the Downtown Eastside for one dollar each.

The vote came after a day of speakers, many who backed the city’s move, and objections from the lawyer representing the Balmoral and Regent Hotels’ owners.

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The vote was unanimous, with Councillors Melissa De Genova and Rebecca Bligh absent.

Earlier Wednesday, the Evan Cooke — the lawyer for the Sahota family, who owns the buildings – said the City of Vancouver could face a lawsuit if it tries to expropriate them at the $1 value.

The dilapidated Balmoral was evacuated due to “life-safety” concerns in June 2017, and the Regent was evacuated a year later for the same reason.

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

According to the city, independent valuations have found both buildings actually carry a negative valuation.

Evan Cooke, the lawyer for the Sahotas, told councillors Wednesday that the buildings’ $1 valuation was “troubling.”

Protest block party held outside Balmoral Hotel on the eve of evacuation deadline
Protest block party held outside Balmoral Hotel on the eve of evacuation deadline

Cook told council the properties had seen almost 10 offers by “sophisticated, arms-length purchasers” with bids ranging from $7 million to $20 million.

The city says it made an offer to buy the properties back in Aug. 2018 that was ignored. Cooke argued Wednesday that the city had offered $3 million per building, far below competing bids.

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

“The owners have communicated over and over again for more than six months that they are willing to convey the title of these buildings to the City of Vancouver, they are not obstructing the turnover of these properties for rehabilitation and for ongoing use for social housing,” he said.

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“They have only asked that they be treated fairly in the process and they be paid market value. And I can’t imagine what’s better market value than a series of arms-length offers.”

Cooke said the city’s expropriation proceedings mean that the owners cannot sell the properties, and urged the City to withdraw its application, warning that if it failed to it could be at risk of litigation.

Balmoral Hotel Evictions
Balmoral Hotel Evictions

Pressed by Vancouver Mayor Kennedy Stewart about the nature of the relationship between the Sahotas and the “arms-length purchasers,” Cooke said they may know the buyers socially, and that he couldn’t unequivocally rule out the possibility they had had previous business dealings together.

“I’ll be frank, Mr. Mayor, I haven’t looked into that point, I would have to do considerable due diligence to figure that out, so I’m not prepared to give that assurance, but I’m also not aware of any such association between the parties,” Cooke said.

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

The City has documented hundreds of cases of bylaw violations and deplorable conditions at the Balmoral and Regent.

The owners pleaded guilty to a slew of those violations in April, after facing 60 charges related to deplorable living conditions at the Balmoral. In December 2017 the city referred nearly 500 violations related to the Regent to prosecutors.

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As punishment, the Sahotas have agreed to pay a $150,000 fine and make a $20,000 donation to the Union Gospel Mission and a $5,000 donation to EMBERS Eastside Works.

Housing activists blast Vancouver City Hall for SRO hotel evictions
Housing activists blast Vancouver City Hall for SRO hotel evictions

Many of the dozens of speakers who attended Wednesday’s meeting spoke to the living conditions in the buildings, including bugs, floods, lack of heat and hot water, poor maintenance and violence.

Fiona York, coordinator with the Carnegie Community Action Project, presented a petition, saying residents of the neighbourhood were united in supporting expropriation and the conversion of the buildings to housing at shelter rate.

“This will send a clear message to landlords about maintenance of SRO stock and also … as part of a call for more social housing in the DTES,” she said.

Robert Patterson of the Tenant Resource and Advisory Centre echoed York’s call, suggesting the City must consider the extraordinary nature of the landlords, who had let the buildings fall into an extreme state of disrepair.

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“If council at this point isn’t willing to use this power in such an extreme situation, we fear it sends the message [that] these orders and bylaws can be ignored with no real consequence,” he said.

He argued taking ownership of the buildings was the only way to ensure they would be brought back to livable quality, considering the fact that the Sahotas had ignored multiple bylaws, city orders and directives from the Residential Tenancy Branch.

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Future of SRO in Vancouver’s Downtown Eastside up in the air
Future of SRO in Vancouver’s Downtown Eastside up in the air

“I would ask you in particular to focus, in making this decision, on the stories of the people that have lived here, of the harms that have suffered as a result, and the lives that were lost in these buildings,” Patterson said.

While many of the speakers backed expropriation, the message was not unanimous. Council heard from at least two parties interested in buying the properties.

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

Lisa Giesbrecht, director of the Heritage Charitable Association, said her group had made an offer to buy the properties 10 months ago, and want to convert it to privately financed low-income housing.

She called the idea of expropriation “deeply disturbing,” and noted that even BC Assessment had valued the properties at millions of dollars more than the city.

“We understand the condition of the buildings and we are satisfied that privately financed project management can open these 345 desperately-needed rooms in a timely and economical manner,” Giesbrecht said.