Why has the City of Prince George agreed to pay $4.15 million for the Knights Inn motel, which had an assessed value in July 2023 of only $1.211 million?
“BC property assessment values are not the basis of sale value for any property,” said city communications advisor Claire Thwaites in an email to the Citizen.
“A third-party appraisal company came to the final value conclusion of a market value of $4,150,000.”
Mayor Simon Yu said having BC Housing provide incentives makes the purchase of 44-unit motel at 650 Dominion St. a wise investment, especially considering property values in the city have risen 20 per cent over the last year or two.
“We as a council looked at the numbers and made a decision and it seems to be a good deal in terms of the long-term benefit to the city,” said Yu.
“Based on the money we’re getting from the province to do this it doesn’t look like it’s out of line with the assessment. Normally the assessment value is substantially lower than what the purchase price is. As a mayor, I’m happy with what this deal consists of.”
BC Housing will continue to lease the building for two years, from March 31. 2024 to March 30, 2026 and will pay the $1.134 million cost of that two-year lease up front to the city. The remainder of the purchase price ($3.036 million) will come from the city’s Endowment Reserve Fund.
As part of the deal. BC Housing will pay the taxes and utility costs for duration of the lease and it will have an option to extend that lease another six months. Based on its new lease, at $47,250 per month, that could provide the city an additional $283,500 if the lease is extended.
The province will also contribute $450,000 to pay for potential future demolition costs instead of being on the hook to provide money to restore the now 61-year-old motel, as per standard lease conditions.
City planners are currently seeking public input to help develop the Civic Core District Plan, which focuses on the area surrounding the Prince George Conference and Civic Centre. The Knights Inn property sits on an adjacent block east of the Civic Centre and north of Kopar Memorial Arena in an area the city is considering as the potential site of a new downtown arena and performing arts centre.
“It’s a piece of property we as a city need to have in order to develop the downtown core properly,” said Yu. “Right now, what it’s being used for temporarily is fine, but in the long term we can work this thing into a core design something more in line with arenas, symphony halls and conference centres as part of the development.”
Knights Inn was converted to supportive housing in October 2021 and it was also used as temporary housing during the pandemic to isolate patients who tested positive or were exposed to COVID-19. BC Housing paid the owner close to $1 million for a two-year lease and provided $1.5 million to the Prince George Native Friendship Centre to operate the facility.
“Most likely it will continue as some form of supportive housing until such as a time as we have our plan ready,” said Yu. “We can request of the lease holder to end the lease if we need to develop this earlier.”
