At 435 Cherry Avenue, the BC Housing-owned apartment was supposed to open by the fall of 2023. Several delays now place that target two years behind schedule.

(LEVI LANDRY / iNFOnews.ca)

When BC Housing announced it "preserved" housing with a nearly $13 million purchase in Kamloops, new tenants were supposed to move in that same year.

After the North Shore apartment building's previous owner failed to repair some of the fire damage to the building and a pipe burst in a winter cold snap it has fallen more than two years behind schedule.

It's also well over budget.

By this fall, it's supposed to be managed by Interior Community Services as subsidized, affordable housing.

"When you're talking a building going a few million over budget for 40 units, that's a whole other building they could be acquiring," Kamloops Centre MLA Peter Milobar said.

The initial $500,000 renovation estimate was announced in April 2023, which came with a condition that $250,000 would be withheld if the seller didn't take care of certain work. BC Housing followed through with that condition.

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In July 2024, the work was pegged at $2.7 million, but a Crown agency spokesperson said it dipped to $2.5 million after a contractor bidding process.

Residents at 435 Cherry Avenue apartment were forced out in January 2021 due to a fire in one unit. It's been vacant ever since.

Housing Minister Ravi Kahlon said the BC NDP government would "continue to explore creative avenues" to bolster the affordable housing in the province in the 2023 news release, then continued to defend the purchase when critics said it was far overvalued.

When questioned by Milobar in the Legislature last April, Kahlon said it was independently appraised at $10.4 million and it was purchased for $11.4. After closing costs, the total grew to $12.8 million.

"When we see an opportunity to get units available for people right now, because we know the need is there, we go through the due diligence, which we have here... and we do our assessments of how we can acquire that property if it's within the range of the appraised value," Kahlon said. "In the end, our goal, always — coming out of the pandemic, the challenges we're seeing — is to try to get people indoors. That's the goal here."

The price was also triple BC Assessment's tax value, but the minister dismissed those concerns saying there's often a wide disparity between market-value appraisals and tax assessments.

Asked about the delay, a BC Housing spokesperson said it was due to the need to put the work up for contractors to bid on the job.

That was after the Crown agency initially planned to give the contract directly to a Nelson-based construction company last summer, then estimated to cost $2.7 million. BC Housing redirected to an open bidding process, later awarded to local company A & T Developments.

Asked about the increase in construction costs, BC Housing attributed it to "critical upgrades" that were needed, like a new electrical room, sprinklers, HVAC upgrades and a retaining wall.

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That work is being funded, in part, with $1.4 million through BC Housing's capital renewal fund.

Documents for prospective contractors expected two move-in phases for separate floors with the first starting Feb. 1.

After passing that date, BC Housing now expects to have renovations complete and tenants moved in this fall, a two year delay.

Milobar said the delays and underestimated renovations are "ridiculous in the extreme" and criticized the project as a "microcosm" of BC Housing projects across the province.

He pointed specifically to two separate motel purchases in Prince George, where BC Housing paid a combined $12.5 million to the same owner. That owner only bought them a few years before BC Housing came knocking and made a total $11 million in profit from the government.

In Kamloops, he pointed to the frozen pipes that flooded the Cherry Avenue purchase as a repeated misstep. The same thing happened in 2021 at Fortune Motel just a few blocks away, before the province started renovations on what would become a supportive housing site.

One of its two buildings had to be torn down and BC Housing is now seeking bids from contractors to replace it.

"BC Housing and the minister are eroding the trust neighbourhoods and agencies have in them when they come in to those areas and say they're going to do a project, because nothing ever gets followed through on, nothing is ever as it seems, the costs are always way out of whack, timelines get totally missed. It's a mess," Milobar said.

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