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The two buildings provided low-cost rental units for decades, even as residents and housing advocates complained of chronic pests, disrepair and fire safety violations.

Rafal Gerszak/The Globe and Mail

A director of a Vancouver-based charity says it has made a “fair market value" offer for two notorious hotels on the city’s Downtown Eastside, saying it wants to repair the rundown buildings and operate them as low-cost rental housing.

Heritage Charitable Foundation made unsolicited offers for both the Regent and Balmoral hotels last week, foundation director Lisa Giesbrecht said on Monday.

The buildings are owned by Vancouver’s Sahota family.

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Ms. Giesbrecht would not disclose the offer amounts, but said the offers are subject to several conditions, including arranging financing and the city giving up its plans to expropriate the buildings.

She maintained that her group – which is linked to other non-profit groups that run existing low-cost housing, including at least one building owned by the Sahotas – could bring the two buildings into decent repair and run them as low-cost housing for less money than the city or province would spend.

“We are confident in our privately financed ways that we can go faster and cheaper [than public-sector renovation],” Ms. Giesbrecht said.

“I admire all forms of supportive housing but I must say that government forms, when you’re sitting in our seat … we definitely do it on the faster and cheaper side,” she said.

The offers throw a new wrinkle into the saga of the two buildings, which sit across the street from each other on East Hastings Street and for decades provided low-cost rental units, even as residents and housing advocates complained of chronic pests, disrepair and fire safety violations.

The city ordered the Balmoral to close in June, 2017, and the Regent to shut a year later, in June, 2018. The following month, the city announced plans to expropriate the two buildings.

Since then, the process has largely moved out of public view. Last August, the owners challenged the process by asking for an inquiry, as set out in B.C.'s Expropriation Act, arguing the city had failed to negotiate in good faith with the owners.

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By this past April, when The Globe and Mail asked the city about the status of dozens of bylaw charges against the two buildings, the city said the owners’ request for an inquiry had been withdrawn. The bylaw charges, it turned out, had been settled months earlier, in November, 2018, when the Sahotas pleaded guilty to a majority of charges and agreed to pay a fine of $150,000 and another $25,000 to two neighbourhood charities.

That settlement didn’t sit well with housing advocates, who questioned whether the city had given up leverage.

The city, meanwhile, said its legal options were limited.

In court recordings of that hearing accessed by The Globe, city lawyers argued the penalty was the largest handed out in history for such bylaw violations and would be a deterrent for problem landlords. And city solicitor W. Robert LeBlanc said the expropriation process means “the end is near with respect to the offers on these two buildings.”

The buildings have an assessed value of about $3.2-million each as of July, 2018. The assessed value of both buildings has plummeted since the city ordered them closed, reflecting the loss of rental revenue. The Regent, for example, had an assessed value of $12.2-million before it was closed.

Efforts to reach the Sahotas were unsuccessful.

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Vancouver Mayor Kennedy Stewart declined to comment Monday because, his spokesperson said, the expropriation process continues.

City Councillor Jean Swanson, a long-time activist for affordable housing, echoed the mayor’s privacy concerns and declined to comment. She said, however, that much more federal and provincial funding is needed to house the more than 2,000 people recently counted as “sleeping rough” in the city, an official tally that likely underrepresents the total number of homeless people.

“It’s way cheaper to house them than to keep them on the street,” Ms. Swanson said.

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