The City of Vancouver has reached an agreement with the Sahota family to settle dozens of bylaw charges related to two run-down single-room occupancy hotels the family owns in the city’s Downtown Eastside.
But the fate of the buildings is still unknown, as the family and the city have yet to come to terms over the city’s plans to expropriate the buildings.
The Sahotas – three siblings who together own properties including SRO hotels, apartment blocks and houses worth an estimated $218-million at the time of a Globe and Mail investigation last year – agreed to pay a fine of $150,000 and donate $25,000 to two local charities.
The court-approved settlement came after the Sahotas pleaded guilty to a “majority” of charges listed in a December, 2017, press release from the city, spokesman Neal Wells said last week in an e-mail.
Court records list numerous charges against the hotel owners, operating as Balmoral Hotel Ltd. and Triville Enterprises Ltd., including failing to maintain electrical wiring and to keep walls and floors in good repair.
The agreement, reached in B.C. Provincial Court this past November, is separate from the process through which the city is seeking to expropriate the buildings, Mr. Wells said. The city did not publicize the settlement at the time and Mr. Wells disclosed it to The Globe last week after inquiries about the expropriation process.
The charges and violations fell under the city’s standards of maintenance and fire bylaws, which each provide for fines of up to $10,000 for every violation.
Wendy Pedersen, a housing advocate who has worked with former tenants of the buildings, called the $150,000 fine “miniscule” and questioned why the city would settle the bylaw charges while still trying to acquire the buildings.
“It just seems like bad bargaining,” Ms. Pedersen said. “Why would you give away any leverage?”
Mr. Wells said the city considered all its legal options and that the expropriation process was still underway.
“The City Prosecutor pursued all avenues that were available to the City and we recognize that the value of the resolution does not reflect the historic harm done to the Downtown Eastside community through the unsafe conditions of these two buildings,” Mr. Wells said in an e-mail.
Under the agreement, $20,000 went to Union Gospel Mission, which runs meals, housing and other programs in the neighbourhood, and $5,000 to Embers Eastside Works, a city-backed operation that links people to job and volunteer opportunities.
The charities were “mutually agreed upon,” Mr. Wells said.
The buildings, the Regent and Balmoral hotels, for decades have provided about 300 low-cost rental housing units to residents, including many living with mental illness or addiction.
Also for decades, there have been scores of health and safety violations at the buildings, including blocked fire escapes, rats, bedbugs and broken toilets.
The city ordered the Balmoral closed in June, 2017. The Regent was ordered closed a year later, in June, 2018. Both buildings were closed for health and safety issues, including structural concerns.
Then, in July, 2018, the city announced plans to expropriate the buildings, citing “decades of mismanagement by the building owners.”
In August, the Sahotas asked the province to appoint an inquiry officer to review those plans, saying expropriation was “premature and unnecessary.” Both parties subsequently agreed to put the inquiry process – in which an inquiry officer comes up with a recommendation as to how the proposed expropriation should proceed – on hold until May 1, in the hopes of coming to terms.
The Sahotas withdrew their request for inquiry last month, Mr. Wells said, and negotiations are continuing.
Neither Gurdyal Sahota or Pal Sahota, the brothers who are most involved in running the family properties, replied to requests for comment.
The assessed value of both buildings has decreased since they ceased operating as income-generating rental buildings.
The Balmoral, for example, has a total assessed value of $3.2-million as of July 1, 2018, compared with $10-million in 2016.
The Regent has an assessed value of $3.2-million as of July 1, 2018, compared with $12.2-million the previous year.