City takes ownership of Eau Claire townhomes, says former owners can leave or sign lease to stay

The people who live in what is now the doomed River Run townhouse complex in Eau Claire are facing more tough decisions after the latest offer from city hall.

The city has officially taken ownership of their properties and will soon demolish them as part of the $5.5-billion Green Line LRT megaproject.

The owners must decide if they're going to accept the city's appraised value of their homes — or continue to fight.

"The appraisal is not credible, and the amount they paid us isn't enough to buy an equivalent property in our chosen community," said Patrick Lindsay, one of the owners at the complex, which was built in 1995.

They say the thought of an appeal and another battle with the city seems daunting.

"That could be another two to three years, and this has already gone on five years," he said.

The remaining residents must also decide whether they are going to move out or sign a lease and pay the city to stay in their homes.

"We can pay rent to the city to stay in our own homes until the end of May. So then we have to get out and find another property."

A group of River Run townhome owners meet to discuss the latest development in the expropriation of their homes by the City of Calgary. (Bryan Labby/CBC)

Eight of the owners gathered at Lindsay's townhome this week to express their frustration and disappointment with how the city has treated them through a five-year long tussle.

The latest insult, they say, is the city's appraised value of their homes. They say it's not enough to buy a similar property in the same area.

It's not known what the actual market price is for the River Run units because of uncertainty caused by the years-long expropriation saga.

Harvard Developments plans to transform the outlined area into a mixed-use, transit oriented development over the next several years. The Green Line LRT will run through the area. (Harvard Developments)

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Lindsay says the last property to sell was in 2019 and it went for $950,000. He believes the price was below market value because of the uncertainty.

The owners say the appraisals have fallen short by tens of thousands, even hundreds of thousands of dollars.

Lindsay says his townhome, a 1,700-square-foot, three-storey property with another 600 square feet in the developed basement, is a stone's throw from the Bow River. It has four bedrooms above grade and outdoor space with mature trees. He says comparable properties found on Realtor.ca, ranging from $1.1 million to $4.75 million, exceed the city's offer.

Legal fees pile up

Another sticking point is the amount of money they've spent fighting the expropriation. It's reached $400,000 and they believe it should be covered by the city, under the terms laid out in the province's Expropriation Act.

The land title for one of the townhomes in Eau Claire, showing the city as owner as of Oct. 25, 2023. The city expropriated 21 of the 23 properties as part of the Green Line LRT project. (Bryan Labby/CBC)

"It's more like held hostage or some very powerful, almost punitive way of negotiating," said Gordon Holden, one of the other owners, who stopped himself and said the city hasn't been negotiating but instead "dealing" with them.

Pam Douglas, another owner, feels shortchanged by the city because of a lack of information and communication.

She says it's been stressful for her and her children. She says no one initially responded to her emails about extending her stay beyond the Feb. 22 deadline and she wasn't sure where to go. She's since signed a lease to stay until the end of May.

Douglas says it's almost impossible to purchase another property because her equity is tied up with the uncertainty of her appraisal and whether she's going to appeal it.

Holden agrees.

"So we're purely immobilized. We're trapped here because the big city has put this shadow over the entire property, and so we're stuck here in a way that's so damaging to our ability to move anywhere, to move forward."

City's conduct chastised 

The inquiry report, released last summer, was critical of how the City of Calgary conducted itself in dealings with the River Run owners. The inquiry officer said transparent and forthright communication with the owners was "in short supply or clearly absent."

The report also said a culture shift is needed to improve communications with property owners that would be objectively transparent and even-handed.

The city was asked what, if any, changes have been made since the inquiry and provided a statement:

"Expropriation is never the city's preferred method of acquisition. We prefer to negotiate mutually acceptable agreements with impacted property owners. Throughout our negotiations, we always seek to refine and improve the process. In cases where an agreement is not reached, it may become necessary to initiate expropriation proceedings as outlined in the Expropriation Act, thereby making it a legal matter."

An artist rendering of the Eau Claire area that will be redeveloped as part of the Green Line LRT project. (Harvard Developments)

The River Run owners say it's baffling why the city has been so heavy-handed and, in their words, unfair.

Joel Gaucher, another owner, says he thought the city's behaviour would have changed after the inquiry.

"We got a nice report, a scathing report, with some pretty heavy language, but it didn't change the city's conduct at all," he said.

Kal Sandhu, who is also one of the owners, believes the city's conduct has actually gotten worse.

He says the city is not negotiating in good faith, it's not providing a level playing field and it's not paying their legal fees.

"Since the inquiry, the city has gone highly vindictive," he said.

A spokesperson for the Green Line project says the city took over as owner of all 23 units last October, with a deadline of Feb. 22 for owners and tenants to be out.

Wendy Tynan says discussions have taken place regarding an extended stay. She says the city estimates about half of the units will remain occupied until the end of May.

The inside courtyard in the River Run townhouse complex. The city is now listed on the land titles for all 23 units. (Bryan Labby/CBC)

Harvard Developments has big plans to redevelop the Eau Claire Market land into a mixed-use, transit oriented project.

Lindsay believes the River Run complex has gotten in the way of those plans.

"We're the inconvenient acre between them and the water," he said.

"As a result of the city's decision to throw our 23 homes in a landfill, the developer has their massive project to transform into a waterfront development."

Tynan says the city still plans to start demolition of the townhouse complex and Eau Claire Market as early as June.

Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at bryan.labby@cbc.ca or on Twitter at @CBCBryan.