Lawyer for hotel owners says Vancouver risks litigation with $1 expropriation

Vancouver: A lawyer for the owners of two dilapidated hotels in Vancouver’s Downtown Eastside says the city is exposing itself to considerable litigation risk by seeking to expropriate the properties for $1 each.

Evan Cooke says the Balmoral and Regent hotel owners have received at least 10 offers from “arm’s length purchasers” for the properties from June last year up to July this year.

The city filed a notice of expropriation for the buildings about 15 months ago after it wasn’t able to negotiate their purchase, and at the time an official said it was the first time the municipality had pursued expropriation to provide public housing.

Council is scheduled to vote Wednesday on the expropriation and several people queued up to speak with most applauding the city’s proposal to seize the hotels. However Cooke says that one of the offers received by the owners was in the range of $20 million and was made on the basis that the city withdraw its expropriation notice. He 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 says. “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 says that if council expropriates the properties, the city should spend $350,000 on each building 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, 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.