The Stanley/New Fountain Hotel is like a well to which PHS Community Services Society keeps returning.
The Downtown Eastside charity’s four senior managers quit and its nine-member board was replaced last week after BC Housing and Vancouver Coastal Health audits found widespread misspending of taxpayer funds.
PHS ran a $2.07 million deficit for the year ended March 31, 2013, but its annual financial report was revised last summer to show a $3.9 million surplus after it sold the Stanley/New Fountain Hotel, built in 1907 at 36 Blood Alley Square.
In 2001, Greater Vancouver Housing Corp gave PHS ownership of the single room occupancy hotel, but 2002 provincial cutbacks halted renovations. City hall paid PHS $2 million for the 104-room Stanley/New Fountain in 2003 and BC Housing chipped in $500,000 for renovations to house squatters from the Woodward’s protests. City hall spent $237,504 for a new roof and arcade fencing in 2008.
A report to council said it was supposed to break even on ground floor commercial leases and room rents, but ongoing maintenance and additional staff needed for tenants with addictions and illnesses led to undisclosed PHS losses.
City hall balked at extending a March 31, 2013 deadline for PHS to buy the property, but city manager Penny Ballem denied it tried to block the sale.
“It’s not our business to say you can afford it or not; it’s not something you’d interfere with,” Ballem said.
Westbank Corp. president Ian Gillespie said his 23 Cordova Property Inc. eventually exercised the option for $2.348 million on April 29, 2013. Under the deal, PHS remains the manager and the developer has to replace the SRO housing. Stanley/New Fountain was appraised at $9.51 million in 2012, so PHS auditor EPR counted a $6 million gain.
“They didn’t have the money to buy it themselves,” Gillespie told the Courier. “They were concerned that it not get bought by some of the elements circling for property in that area.”
Gillespie called it a “defensive move” for Westbank, which owns retail and office space nearby at Woodward’s and 60 Cordova.
As for PHS’s problems, Gillespie said he wasn’t aware until the damning audits were published.
“They were fantastic to deal with, so it’s kind of sad,” he said. “On the other hand, as a taxpayer, I think it’s important that people are looking out for these things.”
City of Vancouver statements of financial information show city hall paid $938,081.06 for goods and services and $133,363 in grants to PHS between 2003 and 2011.
Story courtesy Vancouver Courier
