City in conflict of interest in hotel license fight, lawyer alleges

The owners of a notorious inner-city hotel have alleged the city of Edmonton was in a 'perceived conflict of interest' for trying to shut down the bar at the York Hotel at the same time it was trying to buy the land.
The owners of the York Hotel were appealing the city's cancellation of its nightclub licence. ((CBC))
The owners of a notorious inner-city hotel say the city was in a conflict of interest when it ordered the hotel's bar to close while trying to buy the property.

"I am instructed that the push by the city to cancel the York Hotel's business license was contemporaneous with an approach initiated by the city of Edmonton to one of the shareholders of Elmak Holdings Ltd. to acquire the York Hotel," Elmak lawyer Kim Wakefield wrote in a July 2009 letter to the city.

"The reasonable inference is that the city is using its business license powers to aid and abet the acquisition of the York Hotel and to do so on terms favourable to the city."

The city flatly denied Wakefield's allegations in a reply from Chief Licensing Officer Randy Kirillo in September.

"No consideration is given to the property negotiation between the City of Edmonton and the owners of the York Hotel," Kirillo wrote.

"This matter was brought to the attention of the chief licensing officer by the licensee. It was then used to imply that the business license review was tied in with the property negotiations and its outcome would be influenced by the negotiations. That is not the case."

The pending sale became public for the first time Thursday after Wakefield told a council committee meeting the city was finalizing a deal to buy the hotel.  According to correspondence between the city and Wakefield late last year, the price for the hotel and the vacant land around it was set at $3.04 million. The closing date for the deal is April 1.   

Negotiations for the hotel began in June around the same time the city ordered the hotel's bar closed for safety reasons.

Public safety concerns prompted license cancellation

The city cited a large number of public safety concerns, including a failure to curb and report criminal activity on site. Documents show police, paramedics and firefighters went to the York 1,214 times from beginning of 2007 to the end of 2008.

According to documents, the city alleged the owners of the York Hotel didn't do enough to curb problems at the bar.

 In one case cited by the city, a man was alleged to have died of "acute alcohol toxicity" at the hotel.  According to police, the man drank all day at the bar and was carried upstairs to his room with the full knowledge of staff. He died later that evening.

In 2007, a York Hotel representative attended a meeting about bar safety with the Public Safety Compliance Team in which they promised to close at midnight, add four more security guards and make staff more visible.

But months later, a document from the Public Safety Compliance Team suggested the changes didn't improve the situation at the bar and cited a "consistent lack of responsibility on the part of the ownership, management and staff."

The bar remains open while Elmak Holdings appeals the ruling. The hearing was scheduled to take place Thursday but was moved to March 26.

Last summer, Wakefield suggested his clients would not get a fair hearing when councillors heard the appeal because of public comments made by some councillors about the York Hotel.

At time, the owners were even considering hiring a criminologist to challenge the city's crime statistics.

"The York Hotel is not the author of the events reported …but is simply a venue where deeper societal problems are played out," Wakefield wrote. 

Kirillo dismissed that suggestion in the September 18th letter to Wakefield.

"Portrayal of a location as being so bad as to justify relinquishing the owner's responsibility to mitigate the problem inside the business, nullifying the need to initiate and maintain fitting business and management practices is far too cynical a proposition for those empowered and tasked with regulating businesses and business activities," Kirillo wrote.

Elmak Holdings Ltd. has nine voting shareholders.  Requests by CBC News for comment were turned down.

City councillors would also not comment Thursday on the pending land sale. Administration confirms the city wants to purchase the land for the Boyle Renaissance Project, an urban renewal initiative that would provide hundreds of housing units for the homeless.

The York Hotel could be turned into studios and apartments for local artists, city housing manager Walter Trochenko said.


With files from Tim Adams