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

Lawyer Evan Cooke said his clients had received at least 10 offers for the properties

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 considerable risk of litigation by expropriating them for $1 each.

Council voted unanimously on Wednesday to expropriate the Balmoral and Regent hotels, which Mayor Kennedy Stewart described as a landmark decision.

“Today’s historic vote to expropriate the Balmoral and Regent hotels 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.

“The decision to bring the buildings into public ownership was not taken lightly. Safe, secure homes are desperately needed in our city and today’s decision recognizes the impact these buildings had on the Downtown Eastside community.”

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.

An official said then that it was the first time the municipality had pursued expropriation to provide public housing.

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.”

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.

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.

Last year, the city said it also wants to replace 50 per cent of the remaining SROs by 2028, totalling about 2,000 rooms, with new social housing.

Hina Alam, The Canadian Press

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