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Municipal Politics
Urban Planning + Architecture

Lessons from Blood Alley: When Citizens Became Developers

Fifty years ago, two Gastown hotels were set to be bulldozed. They survived to become the site of an innovative social housing project.

Jesse Donaldson 29 Aug

Jesse Donaldson is an author and journalist. His forthcoming work is 49.2: Tales from the Off-Beat, a series examining the weird and wonderful elements of Vancouver’s history. The first installment, Land of Destiny: A History of Vancouver Real Estate will be published in fall 2019 by Anvil Press.

Fifty years after they first faced the wrecking ball, Vancouver’s historic Stanley and New Fountain hotels are set to come down.

Vancouver city council unveiled a plan this spring to demolish the deteriorating Cordova Street single-room-occupancy hotels — both of which are on the Canadian Register of Historic Places — while retaining their facades and replacing them with a low-rise tower containing 80 units of social housing.

When the hotels were condemned in 2017, more than 100 residents — among the city’s most vulnerable and marginalized — lost their homes, in just one of many such displacements. Another 300 people were forced to move following the closure of the Sahota-owned Balmoral and Regent hotels.

The city’s Stanley/New Fountain project was hailed by advocates as a victory for neighbourhood residents and a necessity at a time when homelessness has hit a record high.

But as heritage advocate and architectural historian Harold Kalman notes, this isn’t the first time the properties have been on the chopping block. In fact, their impending demolition in spring 1969 led a small group of academics, advocates and residents to transform the aging buildings into one of the most innovative social housing projects of the time.

“We managed to do a hell of a good thing,” Kalman says on the phone from Victoria where he now lives. “The UBC academics of the day were engaged in their city. They were interested in their place. Most of us were newcomers. We cared about the city of Vancouver, and we wanted to make it a better place.”

Kalman, who arrived in Vancouver in 1968 from Montreal, was an assistant professor of architectural history when he first took notice of Gastown and, in his words, “got absolutely swept up in what was happening down there.”

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Harold Kalman in 1970, in front of the Stanley/New Fountain revitalization project. Photo courtesy of Pugstem Publications.

Then known as “Skid Road,” the Gastown of the late 1960s was a collection of derelict warehouses and crumbling SROs. But following an abandoned plan to demolish much of the neighbourhood and build a freeway, community groups and conservation experts, Kalman among them, began to pay attention to the neighbourhood.

The battle over the expressway marked a turning-point in community activism and sparked a push to revitalize and beautify the neighbourhood with an eye to preserving its heritage value.

The area had also caught the eye of local developers, who recognized the profit potential of a revitalized Gastown. They bought up buildings for a pittance, renovating them and evicting their low-income tenants in favour of a younger, hipper crowd.

Gradually, new merchants set up shop, taking advantage of cheap rents and the neighbourhood’s changing image. Suddenly, like today’s residents of the Stanley, Balmoral or the Regent, the inhabitants of 1960s Gastown found themselves displaced from crumbling century-old buildings with nowhere to go in a rapidly gentrifying neighbourhood where property values were rising by the day.

Then, in spring 1969, Army and Navy Stores decided to demolish two SRO hotels across from its flagship location on Cordova Street to build a parking lot. News of the impending demolition of the Stanley and New Fountain generated widespread outrage.

As Kalman explains, the Stanley and New Fountain — built at the start of the 20th century to house resource workers — were structurally sound. Until a fire in 1969 they had been home to more than 100 people. Army and Navy, founded by Vancouverite Samuel Cohen in 1919, had purchased the hotels in 1952, granting a lease to the proprietors until 1968. It was legally entitled to knock down the hotels to make way for a parking lot.

But the Cohen family was unprepared for the ferocity of the public backlash about their plans. The Vancouver Antique Flea Market delivered a petition to council that contained more than 500 names. In May 1969, Kalman spoke before city council, arguing that the two hotels “play a uniquely irreplaceable role in the future of Gastown.”

A delegation of residents led by former cook Roy Coveney, who would go on to form the Gastown Residents Association, made their own impassioned plea for the hotels’ preservation.

Their hard work paid off. The Cohen family withdrew its application for a demolition permit and agreed to sell the property, if a buyer had funding and a development plan.

But, as Kalman recalls, there was one major problem.

“I wasn’t a developer,” he says. “I was a middle-class teacher at UBC. What did I know? My father had been involved in a few small developments, but nothing on that scale. I said: ‘I’m not going into this by myself. I need partners.’”

‘The means to stand fast’

In late 1969 Kalman connected with local heritage advocate Pat Richardson, real estate sales agent Charles Bosman, who was also Kalman’s neighbour, and contractor Robert Peterson, a colleague of Bosman’s at real estate firm Wall & Redekop, which later morphed into Peter Wall’s Wall Financial Corp.

In February 1970, the quartet incorporated the Cordova Redevelopment Corp. with each shareholder contributing $10,000. The original vision was an early example of mixed-use development. The bottom floors would be leased as commercial space and the revenue would subsidize the low-income residences above. A residents’ association would share in decision-making and any profits would be distributed amongst the residents.

As time passed, the arrangement grew more complex. First, the Cordova group pitched the redevelopment to the Canada Mortgage and Housing Corp., which in 1970 had $200 million in federal funds available for innovative housing initiatives.

The Crown corporation denied the initial request, But CMHC’s Pat Ferguson and Vancouver manager Kingston Ganong took notice, ultimately arranging a generous low-interest mortgage that covered 95 per cent of the total value of the properties.

“Because of the CMHC connection, we were able to leverage an enormous amount of money with a very small investment,” Kalman recalls. The Cordova Redevelopment Corp. was able to buy the properties.

Around the same time, First United Church, located near the hotels, commissioned a feasibility study of the project from the architectural firm of Birmingham and Wood. Architect Dave Spearing became one of the development’s biggest cheerleaders, and the study’s report could just as easily have been written about the Balmoral, the Regent, or any of today’s Gastown SROs.

“At the present time there is an acute shortage of low-rental housing in the area, and it is rapidly growing worse as Gastown is being developed as a fashionable ‘mod’ precinct,” the report reads. “What accommodation is available at low rents generally has substandard heating, plumbing and ventilation, and is commonly dirty and verminous.... This project provides an opportunity to deal with the housing problems of a group in urban society whose normal lot is to occupy the worst housing available in our cities, and to be forced out of any area which experiences revitalization. To give even a few of them the means to stand fast in their chosen area, and to have decent accommodation without the label of charity would be a significant contribution to humanizing the urban core.”

Subsequently, the city purchased a portion of the property from the Cordova Redevelopment Corp. as part of an urban beautification scheme that would turn Blood Alley into a public square.

The redevelopment corporation pressed on with plans to renovate the hotels, bringing in architect Richard Henriquez to oversee the project.

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Construction in Blood Alley Square, August 1973. Photo by T. Sebastien, courtesy of the City of Vancouver.

Construction started at the beginning of 1971. But in 1972, the project ran into trouble. As estimates rolled in from contractors, costs suddenly ballooned past the point that the corporation could manage.

“It scared the hell out of us,” Pat Richardson’s husband Ormond told the Province in 1972. “It became beyond reach entirely.”

Changing hands

Locked into their mortgage and fearing disaster, the quartet backing the corporation sold their shares to two young Winnipeg businessmen. Upon hearing of the sale, Ganong, CMHC’s Vancouver manager, ordered a legal inquiry, but ultimately allowed the sale to go forward.

“We have been very cautious in this development,” Ganong assured the Sun in July 1971, “not because of the people involved, but because it is a new adventure. It is the first time we have been involved in such a project, and it is a bit riskier than our usual involvements.”

“The Gastown scheme may not be an ideal solution,” added journalist Boyce Richardson in his 1972 book The Future of Canadian Cities. “It would be preferable for the citizens themselves to own the equity in their enterprise; some of the citizens were suspicious of the long-range intentions of the real-estate companies backing the Cordova corporation.... Still, it has been a remarkable effort for a group of people whose opinions had never been considered before in the history of Vancouver development.”

Ultimately, the project was completed and subsequently managed by the Stanley and New Fountain Society until it was taken over by Portland Hotel Society in 2007.

Today, the Stanley and New Fountain sit empty. And the project to replace them shows how much the city has changed in the past 50 years. Unlike the initial venture, which was jumpstarted by a small group of investors and held together by public money, today’s New Fountain/Stanley is a partnership between the province and development giant Westbank properties.

Kalman, after his experience with the project, started his own consulting firm, Commonwealth Historic Resource Management, in 1975. He’s written several books on heritage preservation and architecture and is a member of the Order of Canada.

When asked about the future of the Downtown Eastside and the lessons from the Stanley/New Fountain ventures, Kalman emphasizes a point that would likely be anathema to today’s developers: a social conscience needs to outweigh the profit motive.

“It’s about developing a solid vision; something smart, that’s in the city’s interest, and that’s achievable politically,” he says. “We were a small, committed group of people — none of whom were doing it out of self-interest. It wasn’t as if we were these crazy academics who didn’t believe in profit. We did. We were all investors, but profit wasn’t the first priority. It was about doing good.”  [Tyee]

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