A long awaited public auction for four parcels of land in Hay River, including the troubled and fire-damaged Mackenzie Place high rise, attracted no bids Aug. 11.
Sam Mugford, the director of finance and administration said in an email that the municipality will have to put the property for auction again next year in hopes that the town can collect back property taxes owed and find a resolution to the housing challenges presented by the building.
“The Town will treat this like all other properties which have delinquent amounts owing,” he said. “We will follow the process as set for by Property and Taxation Act (PATA). The Town will put the property up for auction again if the delinquent balance continues to exist in 2022.”
Right now, building owner Harry Sadteo owes about about $170,000 in back taxes from 2018 and 2019, plus interest.
Mugford said that the 2020 and 2021 property taxes have been levied with interest accumulating and that Sadteo now effectively owes the town closer to about $392,000.
“Interest accumulates at a rate of 1.8 per cent per month on all payable balances in accordance with the Town’s Financial Administration bylaw,” Mugford wrote in an Aug. 16 email. “Under PATA there is no distinction between the two; once interest is incurred it becomes part of the property tax liability.”
The assessed value of the property, initially set at $5.9 million in 2019, was reduced to $2.9 million in 2020 due to the fire and as the result of requests for reassessments by Sadteo, Mugford said.
According to the act, the minimum bid during an auction is 50 per cent of the assessed value.
“So the minimum bid is based on half of that, or roughly $1.45 million,” he said.
“The Town has and will continue to pursue every avenue to collect delinquent taxes on all parcels within its jurisdiction.”
One of the stipulations in PATA includes that someone bidding on a property has to put down a cash deposit of 25 per cent on the day that the full bidding amount is accepted at the tax auction.
“Even if someone had bid on the high rise, the owner still has 30 days to pay off the delinquent portion and reclaim the property,” Mugford explained.
With no bidders last week, the building has remained empty since the March 2019 fire which resulted in 125 people who were living in 122 units being displaced.
Mugford said that the town recognizes that the building has contributed to a housing shortage since the 2019 fire which abruptly ended dozens of affordable housing options for residents.
However, the municipality is limited as to what it can do to directly address the issue beyond following the direction from its legal representation and PATA because the building belongs to a private owner.
“Though the Town would like to see this building rejuvenated, it is limited in its authority to affect change in this regard and understands the complex nature of the circumstance,” Mugford said.
The building is about 50 years old and is believed by the municipality to need serious renovations before it can be reoccupied.
Traditionally it has provided a wide array of housing needs across the spectrum in the town’s downtown core.
“It is difficult to speculate (the extent of impact on housing from the building fire) but we know how many units were in the building and how many were occupied and where those people went – some to basements or other accommodations,” Mugford said.
“But it was really a a total mix of tenants who lived there. Some included professionals, teachers, nurses, as well as other long-term Hay River tenants who have been there for decades. Others included people who had housing problems.”
Zoning bylaw
The town is also in the midst of updating its zoning bylaw to try to improve housing availability, however Mugford said it will take some time before actual units can actually be made available.
“The town has been working to rezone existing properties for residential use and develop new areas to ease some of the demand for housing, however these changes take time to create meaningful impact on housing availability,” Mugford said.
Sadteo said on Friday he wasn’t happy that there was no one interested in the structure.
“I was kind of disappointed that no one came forward and bid on it and I’m not sure if it (the public auction) was well publicized,” he said.
He said several times this year that he had been optimistic that the building could be auctioned off this year and more housing options could be provided for those in need in 2021.
Sadteo wrote in an open letter to Premier Caroline Cochrane that the territorial government is not treating the housing situation in Hay River urgently enough.
“The current NWT government in their mandate, has highlighted housing as an area of great concern,” he wrote in the letter, which was shared with the Hub over the weekend. “However, in spite of being allocated $80 million by the federal government, there appears to be reluctance by the current NWT government to demonstrate their promise to the residents of Hay River and the NWT to assist in providing this (most) basic of human needs.”
Hay River South MLA RJ Simpson and Hay River North MLA Rocky Simpson did not respond to questions before press deadline. Questions sent to the Northwest Territories Housing Corporation also went unanswered.