Aquifer breach damage costs soak Vancouver

City hopes to collect on $9.9M repair bill

VANCOUVER — The City of Vancouver will try to collect on a repair bill of at least $9.9 million after drilling on a city residential lot caused a massive aquifer flood that has yet to be contained while endangering neighbouring multimillion-dollar homes.

In September 2015, Feng Lin Liu, owner of 7084 Beechwood St., was building a mansion on his $3-million vacant lot.

A contractor who was hired “on a handshake” to build Liu’s home hired an inexperienced team of drillers to install a geothermal heating system, according to the city.

The drillers — also hired on a handshake — pierced the aquifer, unleashing torrents that have been gushing about two million litres of water a day. The accident sparked an evacuation order and fears that a sinkhole could swallow about 12 nearby homes.

The drillers quickly fled the construction site and left Canada, according to the city. Liu is now responsible for the damage, deputy city manager Paul Mochrie told Postmedia News last week.

By March end, the city had paid $7.9 million to stop the underground flood, Mochrie said. The city hopes that B.C. Groundwater, the company contracted to cap the aquifer and shore up shaky ground, will finish the task by midsummer, leaving the city with an estimated bill of $9.9 million.

But the city has repeatedly underestimated the difficulty and cost of the operation. In September 2015, a city staffer wrote: “Total costs may go to $200,000 … [and] it sounds like the homeowner is taking some steps to manage things.”

Last August, the city estimated it could take another month to stop the flooding and finish repair work under 7084 Beechwood.

“It is the first time in B.C. anyone has had to deal with a flooding aquifer in a dense urban area,” Mochrie explained.

Thierry Carriou of B.C. Groundwater said the firm is now trying to pour concrete and plug the breach, and he is “confident” of a 70 per cent chance the task will succeed.

“There is always risk until the well is fully empty, but the risk has been reduced,” Carriou said.

When the city’s final bill is paid, efforts to recoup costs in B.C. courts could prove as messy and challenging as plugging the aquifer.

The city has declared the drilling accident at Liu’s Beechwood lot a nuisance.

Mochrie said that under the order, since Liu didn’t “remedy” damage for the drilling work, which was done without a necessary permit, the city took over and paid for repairs. The city has since applied unpaid taxes against the property, he said.

Property-tax documents indicate about $2 million in taxes has been levied, so far.

“That tax needs to be paid by anyone who owns the property,” Mochrie said.

Mochrie said that could include CIBC, the bank that provided Liu with a mortgage for the property. CIBC is now foreclosing on Liu’s Beechwood property, legal filings show, and a number of contractors have also placed builder’s liens against the property.

In January, Liu stopped making his mortgage payments, and CIBC is now owed $1.67 million on Liu’s $1.75-million loan, B.C. Supreme Court foreclosure filings say. CIBC has had difficulty locating and serving Liu with legal notices, according to recent court filings.

In late April, a B.C. Supreme Court order permitted CIBC to send Liu notice-of-foreclosure proceedings to the mailing address of a $3.7-million, 5600-block Elizabeth Street home. Mortgage documents for the Beechwood property say that Liu is a businessman, and that his home address is a $5.5-million, 2600-block Edgar Crescent home.

The value of Liu’s Beechwood property was assessed at $3.06 million in 2016.

But an updated 2017 assessment has reduced the value to $2.09 million, which means the city’s mounting repair costs will far exceed the property’s value.

Mochrie said the final tax bill against the Beechwood property could be increased.