Hamilton Spectator: Hamilton council reverses decision, awards $170,000 grant to developer

Posted September 16, 2021

Posted September 16, 2021

A real estate firm will receive a $170,000 city grant for renovations at a King Street East apartment building after all — despite complaints of tenant displacement and hiked rents.

Last week, city politicians rejected Malleum’s application after tenant advocates urged them not to back the tax-based grant under a program designed to encourage redevelopment.

Those who denied the grant found themselves on the losing end of a 6-5 vote to reverse course and approve the public handout after seeking legal advice during closed session Wednesday.

“I’m not pleased,” Coun. Nrinder Nann said after the decision, adding her stance hadn’t changed since she first argued against the grant.

“I wholeheartedly believe that taxpayer dollars — public funds — should not be going to private-equity firms who have a private interest of profit without regard to the social, emotional impact on residents of Hamilton.”

A staff report note the cost of Malleum’s renovations at 540 King St. E. — which has 36 units between two buildings — was roughly $2.78 million. The work was expected to increase the assessed value to about $4.64 million from $2.5 million.

Hamilton ACORN, an advocacy group that has pushed the city to strengthen renter protections, told the city that displacement of tenants through renovations to hike rents and reap profits — “renovictions” — is driving a local housing crisis.

“People are starving on the streets, people are homeless because of these issues and it’s just totally wrong,” Elizabeth Ellis, ACORN’s East Hamilton co-chair, said Thursday about council’s decision to approve the grant.

Malleum, in a written submission to local officials, said when it took over 540 King St. E., “there were six active tenancies and 30 units without valid leases.” Of the six, four tenants had given the previous owner notice to end tenancies, it said.

Moreover, to end tenancies, Malleum says it operates within provincial regulations and expressed disapproval of any landlord that “unilaterally ends a tenancy” to renovate and rent to a newcomer.

Economic development staff recommended approving the roughly $170,000 grant, saying they were “not in a position to independently verify any of the disputing claims.”

The initial decision to deny the grant came as economic development staff tweaked criteria to prevent developers from receiving support for projects that displace tenants.

The new parameters for the programs meant to spur redevelopment downtown — and around Barton Street and Kenilworth Avenue — would rule out projects involving the renovation of exiting residential units.

There are exemptions, including for projects that don’t involve tenant displacement, affordable housing backed by government funding, buildings that have been vacant for two years and non-profit groups.

On Wednesday, Coun. Brad Clark told colleagues he “absolutely” supported the program tweaks but expressed concern over “changing the rules of the game” after the firm had submitted applications under the former rules.

“And I’m really nervous about that. I think it will hurt us on a go-forward basis,” Clark said.

Malleum submitted six grant applications in 2018 and 2019 that have yet to be approved, noted Jason Thorne, general manager of planning and economic development. Four or so will be ready for council’s consideration next month, he said.

Nann, meanwhile, rejected the firm would have been treated unfairly had its application for 540 King St. E. been rejected, noting the previous rules on tenant displacement were clear.

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Article by Teviah Moro for the Hamilton Spectator