Rodmay Heritage Hotel is seeking compensation from the City of Powell River for a lost lease.
Marion Blank, director and owner of the hotel, said the hotel has leased office space to various tenants during the past 10 years. City inspectors and fire department representatives have inspected the space over the years and occupancy permits have been issued.
Blank said a tenant at the hotel gave notice earlier this year for leaving and a new tenant was secured to occupy the vacated space.
“The new tenant went to the city to get an occupancy permit and was informed that the Rodmay was not zoned for this use,” Blank said. “The Rodmay had a lease with the new tenant and they were to move in. The tenant had to find a new location.”
Blank said the city reviewed the permit and determined that the office space was an acceptable use but the tenant had moved on. Due to the high vacancy rate in Powell River it will be difficult for the hotel to secure a new tenant, she added.
“It has amazed me how we can lose our revenue flow from a city hall mistake,” Blank said.
“We wrote the city and they sent the letter off to their insurance company, stating that they were not negligent.”
Blank said the hotel lost more than $4,000 over the signed six-month lease. The hotel has no other choice but to take the city to small claims court, she added.
“We asked them [the city] to consider compensating us for our loss but they have sent a letter claiming no responsibility for this decision. It has impacted us and we could certainly have used the revenue to pay against our business licences, taxes and water bills.
“I think if the city has made a mistake and that it has caused a real loss to a business, then that business should be compensated for the loss.”
Blank said the Rodmay’s owners believe the city could compensate them for the loss by either paying them directly for the lost revenue in the lease or waiving some taxes. “Instead, they sent information to their insurance broker, who sent us a letter stating that the city was not negligent in their decision making,” Blank said. “They also stated that we should not contact them [the city] any further on this matter.
“It is our position that the city made a mistake regarding the zoning of our building and office space and that they should take steps to compensate our business for the loss we have incurred to date.”
Nicole Purves, a representative of the Municipal Insurance Association of BC, said the file is part of an ongoing investigation so the association would not comment on the matter.
Thomas Knight, the city’s director of planning services, said regarding the Rodmay Hotel, he could confirm that the owner has sought compensation from the city, which has insurance coverage for the claim made by the hotel.
“Until a determination has been made by the city’s insurer, the city has no further role,” Knight said.
