Terms of the settlement, including value of the deal, weren’t released.
But the city said in a news release the deal with the Sahota family will now see BC Housing turn the hotels, which have a combined total of about 300 rooms, into “safe and secure low-income housing.”
“Bringing the Regent and Balmoral into public ownership marks a hopeful new beginning for residents of the Downtown Eastside and something all residents should be proud of,” said Mayor Kennedy Stewart in the release. “Downtown Eastside residents will be at the centre of creating a new vision for these two sites, and indeed the entire community.”
City council approved expropriation of the buildings in November 2019 in an attempt to bring the hotels into public ownership and convert them into social housing. The Sahota family then filed for a judicial review of the city’s expropriation.
The owners withdrew their application for review as part of the settlement.
The city has since completed the expropriation process by making advance payments and filing the vesting notices in the land title office, making the city the registered owner of the Balmoral and Regent.
“The decision to settle with the property owners was made by the city to mitigate the financial risk posed by the upcoming judicial review and potential claims for greater compensation, and to enable staff to begin planning for community engagement on the future of the properties,” the release said.
Lawyer Evan Cooke, acting on behalf of the Sahotas, sent an emailed response Friday to Glacier Media when asked about the deal, which read:
"The extended closure of the Balmoral and Regent Hotels in the midst of the Covid-19 pandemic, coupled with the on-going opioid crisis in the DTES, have weighed heavily on our minds.
As a consequence, we have determined that the public sector is better equipped to respond to the acute needs of the area’s residents at this time; including their urgent need for housing, mental health and substance abuse support, and other critical programs.
For the good of the community, we can now confirm that mutually agreeable settlement terms have been reached and that the City of Vancouver now holds title to these two pivotal properties in the Downtown Eastside. The terms of settlement are confidential. No further comment will be forthcoming."
Back in November 2019, Cooke spoke to city council and requested council abandon the move to expropriate the hotels. He suggested at the time the family had received multiple private offers ranging from $7 million to $12.5 million for each building.
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. In November 2019, the city's estimate to repair both hotels was $90 million.
The city worked with BC 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.
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.
Glacier Media 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.
The city promised Friday “a robust engagement process” next year “that ensures low-income residents can and do participate in the visioning of these sites." City staff aim to report back to council on next steps and timeline for the revitalization of the hotels in early 2021.
Recent city estimates put the street homeless population at 750, with at least 200 people living in tents in Strathcona Park.
For an analysis of how long the Balmoral and Regent, along with other Downtown Eastside hotels, have been a problem for the city, click here.
Note: This story has been updated since first posted.