Balmoral-Regent deal cloaked in secrecy, at Sahotas' request
The lack of transparency around the City of Vancouver's acquisition of the Balmoral and Regent hotels was a condition insisted upon by the Sahota family, the former owners of the buildings, city staff say.
When the city announced last week that it had reached a deal to take over ownership of the two currently empty and infamously derelict single-room occupancy (SRO) buildings, the news release said the terms of the settlement prevented the city from disclosing financial details.
What was unclear, though, was who pushed for that secrecy and why the city agreed. But on Wednesday, the reason for the confidentiality was explained in an internal communication from the city's legal department to the mayor and council, after days of questions from the media, including this reporter, seeking details of the deal and an explanation for why it was being shielded from scrutiny.
“The city agreed to this deal under the condition, put in place by the Sahotas, that the sale price would not be made public,” said Alvin Singh, Mayor Kennedy Stewart's communications director. The city agreed to that stipulation, Singh said, “in order to expedite the process and avoid further costs through potential litigation.”
It took a little bit of pressing to get that information.
The city refused to make anyone available for an interview this week, deferring questions about the Balmoral-Regent settlement to the B.C. government, and the province deferred questions to the city. It was the mayor's office that eventually responded.
The Balmoral-Regent deal was first reported last Friday by The Tyee and confirmed by the city later that afternoon in a news release that quoted B.C.'s new housing minister, David Eby, describing the acquisition as “welcome news.”
It isn't typical for governments to choose 4:45 p.m. on a Friday to deliver “welcome news.”
But still, the Balmoral-Regent settlement was hailed as a victory by many, including COPE Coun. Jean Swanson, who has more experience in the Downtown Eastside than most people at city hall and generally doesn't mince words if she feels the city has bungled something.
But the media and members of the public wanted more information about the deal.
When public entities like the city use public money for the public good, there is usually a certain expectation of transparency.
In September, B.C.'s Office of the Information and Privacy Commissioner (OIPC) ordered the release of information relating to the provincial government's 2008 sale of the Little Mountain housing project in Vancouver. That Little Mountain deal was, in many fundamental ways, a very different matter than Vancouver's recent agreement with the Sahotas. But in that September decision, the OIPC adjudicator noted that B.C.'s freedom of information laws exist to “make public bodies more accountable to the public,” which includes subjecting deals between private companies and public bodies — funded by taxpayers — to public scrutiny.
The Sahotas, in an emailed statement from their lawyer, Evan Cooke, described the settlement terms as “mutually agreeable.”
The Sahotas' statement said: “We have determined that the public sector is better equipped to respond to the acute needs of the area's residents at this time.”
In response, Postmedia News asked Cooke whether that means the Sahotas might transfer any other properties to public sector ownership, and if not, why the “acute needs of the area's residents” are served by selling the Balmoral and Regent, but not the Astoria, the Cobalt or any of the dozens of other Vancouver properties they own.
Cooke, unsurprisingly, declined to answer.
But the question gets at another reason it's important for the public to understand, at the very least, why the city might have been willing to agree to shield such an important deal from transparency. While the Balmoral and Regent are particularly noteworthy buildings — the most notoriously rundown SROs at the city's most notorious intersection — there's an issue at play larger than those two towers.
The Balmoral and Regent have been the subject of many years of enforcement efforts and legal wrangling from the city — bylaw violations, condemnations, evacuations, an attempt at expropriation — but this month's settlement happens to land at a time of significant interest, at least at the municipal level, in exploring government-funded acquisitions of privately owned housing.
In October, Vancouver city council approved a staff proposal to pursue partnerships with senior governments to buy up privately owned SROs, an ambitious strategy that could cost up to $1 billion.
Some want to expand this kind of approach beyond SROs, to use public money to convert existing apartment buildings into permanent affordable housing. Postmedia reported in August that key players in B.C.'s non-profit housing sector were talking with the provincial government about a proposed $500-million fund to enable non-profit groups to acquire privately owned rental buildings when they come on the market, and operate them as affordable housing.
It's a big idea that many people believe has potential. But like any major publicly funded undertaking, it should be subject to transparency.