Napanee’s Answer to Springfield Tire Fire
Hotel Hollywood (115 John) and Pie in the Sky (117 John) were structurally interconnected buildings under separate ownership but physically separated only by a frame wall with a common entrance to the upper floors. In 2012, Town staff decided they were in danger of falling down, evicted the owners and then fenced off the buildings. The property remained in that state for 1673 days while the Town dithered and residents scratched their heads.
Neither building fell down. In 2017, the Town hired Demolition Plus to demolish them and truck 100 tons of rubble to South Fred landfill. Demolition costs: $54,700. Legal costs $49,450. Tax arrears: $134,956. Damage to our Town’s reputation: Impossible to quantify. The vacant lots are to be offered for sale for the taxes owing but it is questionable whether anyone will bid the amount that is owing.
Michael Crock, owner of Hotel Hollywood abandoned the property a decade ago, then died, and the property has remained unoccupied since. No taxes have been paid since 2006. Over the years, the building deteriorated; water entered the rear limestone wall and in November 2012 a portion of the outer face of the rear limestone wall fell off. There was concern that, with the rear wall unstable, and with a vertical crack in the load-bearing south wall (which preceded the collapse of the rear wall) the building was unstable. The area adjacent to the east and south walls of 115 John was fenced off and, without question, this was necessary to protect the public.
At the time of collapse, taxes on Hotel Hollywood were 6 years in arrears yet no action had been taken to sell the property for taxes. Proceedings could have been started after 3 years of arrears. Although the building is across from Town Hall, and had been abandoned for 6 years no effort had been made to prevent its continued deterioration to the point where it collapsed.
Pie in the Sky was owned by Stephen and Anne Hull who operated a cafe on the ground floor and two apartments above. There were no issues with their building but the good people in the building and planning department were concerned that the instability of Hotel Hollywood might affect their building.
The Hulls had no right to enter Hotel Hollywood to effect repairs.
The Town, however, did have this right. They were entitled to enter Hotel Hollywood and effect emergency repairs so as to make it safe and to add the cost to the taxes.
On December 20, 2012, the Town officials showed up at Hull’s building and ordered the residential tenants out. On March 12, 2013 they returned and evicted the Hulls from their cafe. Hull stopped paying taxes and eventually was forced into bankruptcy.
The process by which this decision was made has never been disclosed. When asked at a meeting on April 11, 2017, the CAO asserted that this decision was made by council. No record can be found of any such decision of council. Possibly the decision was made in secret session, after the open meeting on February 21, 2013. There is no record as to the recommendation leading to council’s decision and no record of whether council was given any options to either repair to building or evict Hull and fence it off. Although the Hull’s rights hung in the balance, the decision was made in their absence and without any input from them.
The fence was extended around the entire building and no one was allowed to enter either building. Reports of the evictions appeared in The Napanee Beaver on March 21 and The Guide on March 28. Both buildings remained abandoned and fenced off until October 2017 when they were demolished.
Both Hull and the Town had obtained engineering advice. The experts agreed that, if left unchecked, in time the stability of Pie in the Sky might be compromised. They disagreed on the imminence of the threat. The Town’s own engineer stated:
“Based on our observations and analysis, we find that the property at 115 John Street is unsafe. It is prone to going or sudden collapse at any time due to snow load, wind load, or merely ongoing deterioration. A full collapse or even partial collapse of 115 John Street would have significant impact on 117 John Street as 115 and 117 John St. are not independent nor separated structurally. We are concerned that 117 John Street cannot be deemed safe.
It is recommended that 115 John Street continue to be prohibited to access with additional measures put in place to block off pedestrian traffic on all building sides until such time as the owner of 115 John Street completes appropriate stabilization and rehabilitation or controlled demolition. It is further recommended that the Town consider investigating and prohibit the use of 117 John Street until the stabilization and rehabilitation or demolition works on 115 John Street are completed.”
Had the Town chosen to stabilize 115 John, the cost could have been added to taxes and there would have been a prospect or realizing something on a tax sale. After the eviction, both buildings were abandoned and essentially worthless. Council may have thought that the Town should not spend public money fixing private property. But, the alternative turned out to be much worse.
In July 2014, Hotel Hollywood was offered for sale for taxes owing, $39,648.25 representing 9 years of arrears, interest and penalties. Not surprisingly, there were no offers. At that point, the Town had two years to sell it for what they could get. But the Town did nothing. No record can be found of any options being presented to council and council itself did not initiate any inquiry. The 2 year period ran out in July 2016.
The Town’s lawyers have posted their take on the case on their website here.
The report of the court hearing indicates that the cost to the Town of the legal proceedings was $49,450.36. It is unknown how much additional the Town has spent on the engineering reports, fencing and subsequent costs. The Hulls made a consumer proposal under The Bankruptcy Act and there is no possibility of recovery of any costs from them.
After the Hulls were evicted they stopped paying taxes. Taxes on Pie in the sky to date now total $30,666. On January 2, 2016 the Town was in a position to start tax sale proceedings on Pie in the Sky too.
Incredibly, this was not done.
On September 26, 2016, councillor Harvey inquired about the status. The Treasurer replied:
“The Tax Arrears Certificate is being prepared but has not yet been registered on the property. We expect that this will be done shortly.”
Tax sale proceedings were eventually started on December 8, 2016. Eleven months were lost and the property could not be sold until at least 2018. Both buildings were derelict with water leaking in but, contrary to all the predictions, both remained standing. Demolition costs were estimated at $80,000 to $90,000.
To make matters more complex, on July 14, 2015, council passed a resolution to list both buildings under The Ontario Heritage Act. Section 27 of the Act provides that the owner must give the municipality 60 days notice before demolishing the building.
Apparently, by March 2017, someone, somewhere, somehow made a decision to demolish both buildings. Probably the matter was discussed in closed session. On April 3, 2017 the Chief Building Official ordered the Hulls to demolish their buildings by May 1. Notice was served on Hull by registered mail and posted on the building. A similar order was made against Crock despite the fact that he had died 10 years earlier. Just how either owner could legally demolish either building is unclear since the property was now designated under the Heritage Act. The Act required to give 60 days notice before applying for a demolition permit which might take another 30 days to issue.
On April 11, in response to a question from councillor Harvey, the CAO gave a brief verbal summary of what had happened to that point. Councillor Harvey, who was not on council in 2013, asked how the decision was made in 2013 to evict Hull from 117 John rather than buttress up 115 John. The CAO simply replied that it was “a decision of council” without commenting on whether staff had presented alternatives and/or made recommendations.
On April 25, council confirmed that it had authorized staff to proceed with the steps necessary to demolish Pie in the Sky and Hotel Hollywood after May 1. Tax arrears had grown to $109,000. The CAO indicated that there might be environmental and safety issues involved in demolition. See: front page story in April 27, 2017 Whig Standard. See story in Weekly Guide May 2, 2017.
On October 10, 2017, Demolition Plus reduced the 2 buildings to a pile of rubble which was trucked to the South Fredericksburgh landfill. Dump fees were waived which reduced the demolition costs but also reduced the remaining capacity of the landfill.
There is an eerie similarity between this episode and the loss of the adjacent Paisley Hotel in 2005 following the eviction of the occupants by the Town.
The legal and engineering fees, lost taxes, fencing and demolition costs will be paid from our taxes. The damage to the viability of our downtown and our reputation as a Town that is “open for business” cannot be quantified.
Hopefully, council will sit down with staff and do a thorough postmortem to see what can be learned from the experience.
There are a number of questions that all residents should ask.
The Town had choices in 2013. Was council ever presented with them?
What recommendation, if any, did staff make in 2013?
Does council still believe today that they made the right choice?
Why has everything happened in closed session and the public kept in the dark? Now that the matter is complete, why is there any need for continued secrecy about what happened.
The building stood, pretty much unchanged, for over 4½ years. Was the risk in 2013 sufficiently imminent and pressing for the Town to abruptly close down a viable business when the owner has done nothing wrong and had no power to correct the problem next door?
What lessons can be learned from this episode about our building and planning department and about the interface between council and staff?
Would we not save money and improve our development potential if we had a professional engineer in charge of the building and planning department and a full time professional planner to replace the good people at IBI Consultants and AECOM?
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