City must act soon on Kelly-Ramsey hulk
Future of Rice-Howard Way may hang in the balance
By Paula Simons, Edmonton JournalOctober 24, 2009 6:50 AMComments (4)
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...an arson fire this spring.
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...an arson fire this spring.
Photograph by: Shaughn Butts, The Journal, File, Edmonton Journal
For decades, the grand old Kelly-Ramsey Building has been the heart and soul of Rice-Howard Way. Over the years, it's been home to artists' studios, theatre companies and dance schools, not to mention a host of popular and busy restaurants, bars, bistros and sidewalk cafes.
In a city short on both downtown street life and heritage buildings, the Kelly-Ramsey Building was a treasure, a gracious historic structure that filled Rice-Howard Way with culture, bustle and apple strudel.
The heritage block is really two buildings in one. The imposing brown-brick Kelly Building, designed by architect William D. Van Sicklen, was built between 1914 and 1915, by Edmonton blacksmith-turned-alderman-turned-realtor Jack Kelly.
The adjoining Ramsey Building, taller and slimmer, faced in granite and limestone, was built as a department store in 1927 for James Ramsey, Edmonton's so-called "Merchant Prince." Together, they are two of the last survivors of the old downtown commercial centre, reminders of our unique urban Prairie history.
Despite its storied past, the Kelly-Ramsey Building faces a bleak future. In March, the building was damaged in an arson fire. It now stands derelict and forlorn, filled with pigeons, a magnet for panhandlers, a ghostly eyesore.
The longer it sits derelict, the worse the impact on the Rice-Howard Way cafe district. And the longer it remains unrepaired and open to the elements, the more likely it is that we will lose this signature downtown site, as we lost the old Arlington apartment building.
Coun. Ben Henderson, whose ward includes Rice-Howard Way, vows that won't happen.
"The Arlington wounds still run pretty deep with us. The city will fight tooth and nail to make sure this building's not turned into a parking lot. I will fight tooth and nail to save it, and I won't be the only one."
But it won't be easy. While the Kelly-Ramsey block is included on the city list of historic buildings, it has never been designated an official historic resource. That means the city has little power to prevent its demolition, or to order its repair. The city can't designate a building against an owner's wishes without paying the owner full market compensation for any lost value. And since the corner would be worth more without the building than with it, the cost to the city to protect the structure against its owner's wishes could run into the tens of millions.
Technically, the block is still owned by Worthington Properties Inc., the debt-plagued company owned by Edmonton's Dan White.(My attempts to reach White by phone and e-mail were unsuccessful.)
White's longtime friend and business ness associate, Michael O'Reilly, has been charged with shopbreaking and arson in connection with the fire, which was centred in White's own office.
His trial on those charges is set for January.
(For the record, O'Reilly, who's currently out on bail and has yet to retain a lawyer, says the media reports about the case are ruining his life and his ability to earn a living. "Dan and I grew up together. The whole thing is absolutely ludicrous," he says.)
According to a land title search, Worthington bought the building in 2005 for$1.7 million. The most recent city property tax assessment put its market value at $4.68 million But the property is heavily encumbered, with 11 caveats on title.
According to the land title certificate, there was a first mortgage of $2.5 million and a second of $780,000.The property is also pledged as part of the collateral on a$20-million loan to Worthington from Calgary's Paragon Capital Corp.
Worthington hasn't paid the property taxes on the building for the last two years. A property tax search shows the company in arrears for almost $135,000 in city taxes. Revenue Canada also has liens on the title for almost $3 million.
Worthington is so deeply in debt that this spring, the court ordered the Kelly-Ramsey block, as well as several other Worthington properties, sold in an effort to satisfy some of the company's many creditors.
The building was listed for $10 million, more than double its most recent city-assessed value.
At that price, there were no takers, says David Young, senior vice-president with CB Richard Ellis, the real estate company appointed by the court to handle the sale.
"We never had an offer that all the parties involved were willing to accept," Young says.
The judicial sale period expires today. But late this week, says Young, Bancorp Income Mortgage Fund Ltd. of Vancouver, which holds the first mortgage on the property, got a separate court order for a new judicial sale, which will put the site back on the market.
So what should the city do?Should it sit back, let someone buy the building and wait for the new owners to either knock it down, or let it decay? Or should it step in now, and simply buy the building--at what you might call a fire-sale price?
Buying the property outright may seem like a wild idea, but Henderson says it could actually make a lot of economic sense. If the city were to designate the building a heritage site, they'd have to pay the owner market compensation anyway. And the owner would then be able to apply to the city for millions of subsidy dollars to fix the building up.
Instead, he suggests, the city could just cut out the middleman, buy the building and fix it now.
"My fear is that if someone else buys it, they will buy it as a speculative property and hold it for 20 years. And that will kill Rice-Howard Way, kill it, kill it, kill it."
Once the city restored the building, he says, it could either sell it back to private owners or lease out the lower level to restaurants and shops, and use the upper floors for city offices, or affordable housing and studio space for artists, or some other public purpose.
"Clearly, we have to find out whether it's doable from a price point of view. We have to put a business case together," he says. "But I guarantee you we could buy the Kelly-Ramsey Building 20 times over, for what we spent on the 23rd Avenue interchange."
Henderson is right.
It's not just a question of saving a fine old building that adds character, beauty and human scale to our urban streetscape. It's a question of stopping the spread of rot in the city core.
You might well call the Kelly-Ramsey Building an essential, integral piece of our downtown's social and physical infrastructure.
Allowing the site to fester for years like an open wound could have disastrous consequences.
City inspectors who toured the site on Friday found it to be in surprisingly good shape, with most of the structural damage centred in the area near White's former office. But the longer the building sits, exposed to the elements, the more it will degrade.
If the city wants to save the site, and save Rice-Howard Way itself, it needs to act soon.
[email protected]/Paulatics
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