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The Balmoral and Regent hotels are pictured in the downtown eastside in Vancouver, on Nov. 6, 2019.JONATHAN HAYWARD/The Canadian Press

The City of Vancouver has acquired two shuttered buildings from the Sahota family, ending a lengthy fight to expropriate the 300 rental units and jumpstarting a plan backed by the province to renovate and rebuild the Balmoral and Regent hotels – century-old towers synonymous with the poor living conditions on the Downtown Eastside.

The Mayor of Vancouver and the province’s Attorney-General confirmed the November sale Friday after being asked about the city being listed on land titles of both buildings, which were ordered closed by the city years ago after its inspectors failed to keep the owners from letting conditions inside become unlivable.

City staff had previously recommended that council take the unprecedented step of expropriating the two buildings for $1 each, underscoring the dire condition of the properties and setting the stage for a possible court challenge from the owners. Both the Sahotas and the city agreed to keep the value of transaction secret as part of their deal.

Mayor Kennedy Stewart said, in an e-mailed statement, that all residents should be proud that these eight-storey buildings are now publicly owned and thanked the city council, the provincial government and its housing agency for making this happen.

David Eby, B.C.’s Attorney-General and minister responsible for housing, said his government helped make the deal a reality by agreeing to fund the demolition of the Balmoral – which has been shuttered since 2017 – and the renovation of the Regent, which was ordered closed a year later. He said BC Housing will take over the projects and likely replace the single bedrooms that share bathrooms with fewer suites that have their own bathrooms and small kitchens. He could not provide an estimate on how many millions this dual redevelopment would cost nor disclose the amount Vancouver paid for the properties.

“If the Sahotas got $5 from the City of Vancouver people would be angry, but I also recognize the reality of the fact that the city was working from a template of expropriating the properties,” Mr. Eby said.

Both buildings were previously owned by Vancouver’s Sahota family: three elderly siblings who over decades amassed extensive property holdings, including apartment buildings and single-room occupancy hotels, while racking up a lengthy track record of bylaw violations and maintenance problems.

In a statement through their lawyer, Evan Cooke, the family on Friday confirmed they had reached an settlement with the city, for undisclosed terms.

The extended closing of the Balmoral and Regent Hotels in the midst of the COVID-19 pandemic, coupled with the continuing opioid crisis in the Downtown Eastside, “weighed heavily on our minds,” the statement said.

The city ordered the Balmoral closed in June, 2017, and shuttered the Regent a year later, in June, 2018, citing health and safety violations. At the Balmoral, according to court documents filed this year by the city, a structural engineer’s report warned that floors were weak enough that “if a heavy load, such as a full bathtub, was added to a bathroom floor … there was a potential for a localized collapse” and that consequences for such a collapse would be severe.

The city scrambled to find new housing for tenants from both buildings, which together provided just over 300 units.

The owners pushed back, filing a court petition in December, 2019, seeking to have the expropriation process cancelled and alleging that, “there had never been any good-faith negotiations between the parties.” The petition also said the owners had received about 10 offers for the buildings, ranging from $7-million to $12.5-million per building.

The city has taken over the buildings amid debate over an encampment in the city’s Strathcona Park.

That encampment, set up in June, started with a few dozen tents around a running track but quickly grew; recent estimates put the number of people staying at the encampment at about 200.

City council in October passed a motion to spend up to $30-million to buy or lease vacant hotels and other buildings to provide housing for people experiencing homelessness.

Ajantha (Sam) Dharmapala, a former bookkeeper for the Sahotas who quit to become a rental-housing activist, called the deal a huge victory. “Finally we won,” he said Friday. “If the community, tenants and workers had not come forward these hotels [were] going to stay [open] until they collapsed with people [inside].”

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