Vancouver expropriates two derelict hotels on the Downtown Eastside for $1 each

VANCOUVER — City council has voted to seize control of two derelict hotels in Vancouver’s Downtown Eastside after a lawyer for the property owners warned the municipality it is exposing itself to the risk of litigation by expropriating them for $1 each.

Mayor Kennedy Stewart described council’s unanimous decision on Wednesday to take over the Balmoral and Regent hotels as a “historic vote.”

The expropriation “is a clear message that we are not afraid to use every tool at our disposal to create new affordable homes,” he said in a statement.

A teary-eyed Coun. Jean Swanson, who has spent years advocating for the people of Downtown Eastside, made the motion to vote for expropriation, calling it a “moral decision.”

Coun. Adriane Carr told her colleagues: “There are no two better examples of urban blight than these two buildings.”

Lawyer Evan Cooke said his clients had received at least 10 offers for the properties, with one in the range of $20 million if the city withdrew its expropriation notice.

The city filed a notice of expropriation for the buildings about 15 months ago after it wasn’t able to negotiate their purchase.

Cooke asked the city to abandon the expropriation and negotiate with the owners on the basis of actual evidence on the market value for the two hotels.

“The owners have communicated over and over again for more than six months that they are willing to convey title of these properties to the City of Vancouver,” Cooke said.

“They have only asked that they be treated fairly in the process and paid market value.”

Cooke also suggested the city allow the owners to negotiate with outside parties.

“(The owners are) not trying to hold on to these properties but it’s a bit rich, I think, for the city to block an open-market sale of these properties when there’s so much interest.”

Two of the property owners, Pal and Gudy Sahota, were listed as speakers at the council meeting but they did not appear when their names were called.

A staff report also recommended that the city spend $350,000 on each of the buildings to make them secure, which would include installing security systems and conducting regular patrols.

Paul Mochrie, deputy city manager, said it would cost about $46 million to renovate the Balmoral and about $40 million for the Regent. He put the cost of demolishing them at about $3 million.

The Balmoral and Regent hotels are known as single-room occupancy buildings, or SROs. They sit opposite each other on East Hastings Street.

It’s a model of housing that sprang up in Vancouver as transient accommodation for loggers and fishermen many years ago, but has since become a source of low-income housing.

More than 300 of the city’s lowest-income tenants were relocated when the hotels were separately ordered shut down in 2017 and 2018 by the chief building officer after they were deemed to be unsafe.

A presentation by Andrew Newman, the associate director of real estate operations for the city, said the Downtown Eastside is home to 19,960 people. About 53 per cent of them are considered low income.

Jack Gates, who was a tenant at the Regent Hotel, told council the bathroom floors were rotten in the building.

“I never knew when I was taking a shower whether the tub would fall through,” he said.

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