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Vancouver council to expropriate derelict Downtown Eastside hotels

City to pay Sahota family $1 each for Balmoral and Regent hotels

City council took the rare step Wednesday to expropriate two privately run Downtown Eastside hotels known for decades as buildings with deplorable living conditions and magnets for crime.

The unanimous vote means the city will now pay a nominal fee of $1 for each of the Sahota family-owned Regent and Balmoral hotels, which are located across from each other on East Hastings near Main Street.

Two of the Sahota family members — Pal and Gudy — were on the speakers’ list Wednesday to address council, but failed to show in the chamber when their names were called.

Lawyer Evan Cooke, acting on behalf of the Sahotas, requested council abandon the staff recommendation to expropriate the hotels. Cooke said the family had received multiple private offers ranging from $7 million to $12.5 million for each building.

Representatives from the Heritage Charitable Foundation and the owner of the Brandiz Hotel at 122 East Hastings also urged council not to expropriate, saying they had made offers to buy the hotels.

But several councillors were skeptical that private buyers could produce the almost $90 million in repairs needed to return the Balmoral and Regent to safe, secure and affordable hotels.

Barring any legal pushback from the Sahotas — which could come in the form of a judicial review — city staff will now work with B.C. Housing on a plan to renovate the hotels.

City staff told council they will also look to the federal government for funding and begin a community consultation process. Staff would not speculate on when the buildings could open again.

“To effect these kinds of renovations — regardless of whether it’s the city or a private buyer — would take a considerable amount of time for permits and the actual construction work,” said Andrew Newman, the city’s associate director of real estate operations.

“I hazard to put a guess on how long that will be, but we’re talking years.”

In explaining staff’s rationale to call for expropriation, Newman said the city made multiple offers on paper and verbally to the Sahota family and its representatives, but received no response.

Staff settled on a recommendation to pay $1 each for the buildings based on independent appraisals showing “negative market value” in the valuations of the properties.

The move by council involves the city spending at least $350,000 on each of the hotels to keep them secure and monitored by on-site and mobile security for at least three years.

The city will also pay $1,000 to the holder of the Regent Pub lease.

The Balmoral has been vacant since June 2017 and the Regent since June 2018. Both hotels have at least 150 rooms. The city closed both buildings because they were deemed unsafe to occupy.

At the time, the city cited engineering reports detailing fire hazards, rotting wood, sagging floors, water damage and mould inside the Balmoral. Similar problems were raised by the city in its decision to close the Regent.

The city worked with B.C. Housing and non-profit housing operators to find temporary and permanent homes for the tenants, including moving some into the provincial government-owned Jubilee Rooms around the block on Main Street.

COPE Coun. Jean Swanson. Photo Dan Toulgoet

The unanimous vote Wednesday was emotional for COPE Coun. Jean Swanson, who called on the city for years — before she was elected to council in October 2018 — to force the Sahotas to improve conditions in their hotels.

Swanson waged that campaign with fellow advocate Wendy Pedersen of the Downtown Eastside SRO Collaborative and many others in the community, including Jack Gates and Sam Dharmapala.

Gates, a former resident of the Regent, was involved in a lawsuit against the Sahotas related to the conditions of the hotel. Dharmapala, a bookkeeper for the Sahotas at both hotels, went public with his inside knowledge of the family’s business. He told council he was called "a rat" for his decision.

Pedersen, Gates and Dharmapala all spoke in support of expropriation.

“We had such eloquent speakers [to council today],” Swanson said through tears.

“At least three of our speakers have literally risked their lives for this moment — Jack and Sam and Wendy.”

Former Regent Hotel tenant Jack Gates in the council chamber Wednesday. Photo Dan Toulgoet

The Regent and Balmoral have made the city’s top-10 list of problem hotels for almost 20 years and have been cited by police in numerous reports for drug activity, violence and other crimes.

The Courier reported in April 2018 that police responded to 845 calls in and outside the Regent between Jan. 1, 2017 and Feb. 22, 2018; the Balmoral generated 248 calls for the same period, although it was closed in June 2017.