A tug-of-war over two rundown hotels on Vancouver’s Downtown Eastside has taken another twist, with a non-profit group back in charge of operations after having being kicked out in a dispute with the buildings’ owner.
And legal action filed by the city against the owner and other associated parties has been stayed.
Both developments are a result of foreclosure proceedings that were launched last year but moved into high gear last week, when a court-appointed receiver assumed control of the buildings and began hunting for prospective buyers.
The city was advised on Sunday that its legal proceedings had been stayed, Councillor Kerry Jang said on Monday.
“We’re happy if we get a decent owner in there – and we expect that owner, whoever is to buy [the buildings], to comply with all city bylaws,” Mr. Jang said. “If we have a buyer who will comply with the city, then we don’t have to proceed.”
The city took legal action against George Wolsey and associates last year in a bid to force the defendants, the buildings’ owners, to bring conditions at two hotels in line with city bylaws.
City inspectors found a host of deficiencies, ranging from broken windows to cockroaches. The two hotels – the Wonder Rooms on Cordova Street and the Palace Hotels on Hastings Street – have been a concern to city officials for years.
Last August, after complaints from tenants to city hall, Vancouver-based nonprofit Community Builders agreed to take over running the buildings, which together provide 71 rooms that are typically rented at welfare rates.
But that deal fell apart over what Community Builders says was a dispute with Mr. Wolsey.
Now, the group is back, saying its priority is stable conditions for people who live in the buildings.
“Under the direction of the Receiver, CBG will attempt to restore order and wellness for the 71 tenants in the two buildings. The structures will be put on the auction block in the upcoming months by order of the BC Supreme Court. The long-term stay of the tenants will depend on the housing agenda of the new owners,” the group said on its web site.
Community Builders manager Gordon Wiebe said he could not comment on specifics, but on Monday confirmed his group had once again assumed management of the buildings after being off the scene since December.
The Supreme Court of B.C. last year appointed Campbell Saunders as receiver for the two hotels and several other properties. Court documents list a $2.5-million mortgage that is in arrears.
Neither Campbell Saunders manager David Macdonald nor Mr. Wolsey were available for comment.
Community groups have raised concerns about SRO hotels being bought and redeveloped in the Downtown Eastside, saying that poor people who now live in the hotels are being pushed out by redevelopment.
The province in recent years has purchased a number of hotels in the Downtown Eastside as housing and the city and province are also building new social housing projects.
The two hotels are covered by a city bylaw that is supposed to protect SRO rooms but community groups argue that the bylaw doesn’t prevent new purchasers from renovating the rooms and renting them out at higher rates.