Heartbreak hotel Family of former owner of Hotel Fort Garry continues decades-old fight for redress following property assessment blunder By: Kevin Rollason Posted: 7:00 PM CDT Thursday, Jun. 21, 2018 Last Modified: 12:18 PM CDT Saturday, Jun. 23, 2018 Updates

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This article was published 20/06/2018 (2135 days ago), so information in it may no longer be current.

In a different life, John Perrin would be talking to hotel guests as they came through the doors of the Hotel Fort Garry, shaking their hands in a restaurant, and helping make sure they were pampered during their stay in his property.

But that would have been a different life, one charted by a different tax assessment.

Instead, Perrin has spent the past three decades — after his family had the now-105-year-old hotel wrested from them by the city in a tax sale — in a fight to restore his family’s name, to right what he sees as a “miscarriage of justice” involving a bungled property assessment, and to get compensation for what they lost.

That 1980 tax assessment, which was later determined to be off by a staggering 91 per cent, and subsequent legislative roadblocks that prevented appeals set off a long and frustrating legal battle with the city and province — there’s still no end in sight.

“I don’t think there’s another case like ours,” Perrin said recently. “It’s unique — that’s what our lawyer says.”

“Instead of ensuring we, as property owners, had access to fundamental justice in assessment appeals, the city deliberately frustrated and prevented our appeals… instead of protecting our right to fundamental justice as property owners in the City of Winnipeg, provincial legislation in effect at the time created the conditions leading to our abuse,” he said.

“We are seeking acknowledgment and an apology from the province and from the City of Winnipeg, as well as some degree of financial redress to be shared between the two governments.”

Longtime Winnipeg tax lawyer Michael Mercury said there is still merit to Perrin’s case today.

For decades before he retired, Mercury and lawyer Ross Nugent battled the city in court over assessments and tax bills. Their legal work is responsible for regular reassessments being done.

Mercury also acted for the Perrins during their initial fight, as well as property owners on Portage Avenue downtown who also wanted to appeal their assessments at the time.

“They (the Perrins) were unjustly treated by the law and the courts,” Mercury said. “And by the time the law was clarified, he had lost the hotel.

“We reduced the assessment, but by that time he had lost his hotel… He was never compensated for that. This was a great injustice — it was tantamount to expropriation without compensation.

“I feel so sorry for him.”

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In hindsight, the Sept. 13, 1979, Free Press story printed alongside the one announcing the sale of the Hotel Fort Garry to Perrin’s family almost foreshadowed what was to happen.

Though unrelated, a front-page headline proclaiming “City expropriation ‘horror story’” was next to “Hotel Fort Garry sold to Winnipeg group.”

Perrin’s dad, Jack, a Winnipeg businessman who was president of Harvard Investments Ltd., bought the “financially troubled” Broadway hotel for $2.4 million. The sale not only included the building, but the property on the entire block bounded by Broadway, Assiniboine Avenue, Fort and Garry Streets.

“We’ve got to get local people in there enjoying the hotel,” Jack Perrin said in the story. “It needs a lot of local promotion.”

However, J.G. Cormier, CN Rail’s vice-president of public affairs and hotels, warned in the same story the hotel had been losing money for five years and losses were in the six-figure range.

“It’s probably the most charming building we’ve had to work with, and we’re selling it with a great deal of regret,” Cormier said.

He added it was an older building without the efficiencies newer buildings have, it was in a relatively poor location, and it suffered from “a stagnant market.”

Perrin said his father didn’t really look at the purchase as simply buying a hotel.

“From his perspective, he was buying real estate,” he said. “He paid about $2 million for the entire site, but only $100,000 was allocated to the hotel itself.”

Perrin said it wasn’t until his father received the 1980 tax bill for the property that they realized they had a problem.

“He couldn’t believe his eyes. It was $280,000… This was on a building he paid $100,000 on.”

To make matters worse, the assessment appeal deadline had already passed and, compounding the problem further, they had no idea when they bought the hotel what the assessment was or what the tax bill would be — because there wasn’t one. CN paid a grant in lieu of taxes because it was a Crown corporation at the time.

“The city assessor got it badly wrong,” Perrin said.

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Having missed appealing the assessment that led to the 1980 tax bill, the Perrin family was ready to appeal the tax assessment for 1981.

However, the province had passed Bill 100, which froze assessment values at the 1980 level for both the 1981 and 1982 tax years. The city’s position, one that no other municipality adopted, was that the legislation took away the right of property owners to appeal assessments.

In 1983, the Supreme Court overturned the city’s decision — when ruling on the case involving the downtown Portage Avenue business owners — so that assessment appeals could again be heard.

But by this time, the hotel was no longer owned by the Perrins — the city had taken title in a tax sale, although the Perrins were still allowed to operate it.

Despite this, the Perrins did appeal the assessment, but were only partially successful in knocking down the amount. When they appealed that decision to the province’s highest court, they were stymied yet again: while every property owner in the rest of the province was allowed to appeal assessments to the Manitoba Court of Appeal on points of law thanks to the Municipal Act, the provincial government had neglected to put the same principle into the City of Winnipeg Act.

After the Perrins pointed this out to the province, the provincial government amended the act to allow these types of appeals, but because they didn’t make it retroactive, once again the family was powerless to do anything.

“The City of Winnipeg took advantage of confusing provincial legislation to repeatedly prevent us from appealing our property tax assessment,” Perrin said.

While fighting for their right to appeal the assessment, the Perrins didn’t pay what they alleged were artificially high property taxes. By 1982, the tax bill had risen to a three-year total of $1,066,000.

In February 1984, with the hotel still losing money and its property taxes unpaid, Great-West Life decided to foreclose on the hotel’s garage and parking lot mortgage.

It sold the property to Martin Bergen and he later built Fort Garry Place on the land.

“That land was the main reason why dad made the (hotel purchase) deal in the first place,” Perrin said.

 

The city went ahead with the final step in the tax sale and seized title of the hotel in 1987, not waiting for the Perrin family to win their fight to appeal any of the assessments. The city turned around and sold the hotel to Quebec hotelier Raymond Malefant for $1 million.

It was a bitter pill to swallow when, four years later, the Manitoba Municipal Board and the Court of Appeal found the city’s original assessment, as the Perrin family had long argued, was too high.

Instead of a tax bill of $1,066,000, the total amount for those three years should have been about $95,000 — 91 per cent less.

“But by then we had lost the hotel,” Perrin said.

And the $1 million the city received from the buyer when it sold the hotel? The city kept it.

A few years later in 1993, the hotel was taken over by the current owners, Ida Albo, Rick Bel and a silent partner.

“I know Ida and Rick,” Perrin said. “It’s a fabulous building — it is one of Winnipeg’s jewels. They’re doing a great job.”

● ● ●

Despite the ongoing tax battle, the hotel’s financial situation was turning around.

“We were succeeding by 1983,” Perrin said.

“During 1983 and 1984 we did quite well at the hotel. But all through this it was our word against theirs… the business couldn’t afford to pay these taxes. We would have paid the regular taxes, but not this.

“It was the most frustrating and nasty situation you could have because a hotel’s future bookings are based on confidence in the future.”

Perrin’s dad, a prominent city businessman, took it the hardest. Jack died in 1992, five years after the hotel was taken from him.

“It was a nightmare — it truly was,” he said. “My dad was terribly upset and disgusted. He felt — and rightfully so as I find to this day — that we had seriously been abused by the system.

“I honestly think we still would be the owners of that hotel if there hadn’t been this.”

Perrin said they also would have developed the property behind the hotel, but they wouldn’t have built something as large as the apartment complex Fort Garry Place.

“My dad wanted to have a lower rise development,” he said. “So people could still see the hotel from the south.

“But it was completely stymied by the tax problem.”

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There have been five mayors and five premiers in office during Perrin’s fight. He has tried to convince each of them, including current Mayor Brian Bowman and Premier Brian Pallister, that his family suffered a wrongdoing. Each plea has fallen on deaf ears.

In an email on Thursday from the mayor’s office to the Free Press, a spokesman said Bowman is aware of Perrin’s case.

“Mayor Bowman is certainly sympathetic to Mr. Perrin’s concerns and appreciates the emotional impact this decision had, and continues to have, for him and his family. However, Mr. Perrin’s concerns are best adjudicated through and considered by the courts rather than seeking political remedies.”

Perrin last tried to contact Premier Pallister in a letter dated May 24. He is still waiting for a response. On Friday, a spokesperson for Municipal Relations Minister Jeff Wharton issued this statement to the Free Press: “While we recognize and appreciate that this has been a long and difficult process for the family, this matter has been reviewed and there is no further action the government can offer or take.”

Through the years, Perrin even contacted an old family friend, former Premier Duff Roblin.

“He said, ‘John, this is a ghastly story and a denial of natural justice. You should seek redress from the province’.”

It reached the Legislature floor once, in 2005, when then-Tory opposition MLA Denis Rocan urged the NDP Doer government that “this is a wrong that must be righted.”

“(They) have not been afforded the protection of the state but have been victimized by a marshalling of the power of the state against them. In fact, provincial laws, rather than affording protection, aided and abetted the truly offensive, odious even, acts of the City of Winnipeg.

“This is truly a ghastly story. The Manitoba government and Legislative Assembly surely have a moral obligation to provide redress under the circumstances.”

Mercury said there is a process in place where the province can offer compensation to the “gross injustice” suffered by the Perrin family.

“The province has precedents,” he said. “When there is a gross injustice they can make a payment out of ‘grace and favour’. There is a moral duty. These people were really done in.”

Perrin, now 68, was 37 when the city seized the hotel. But he won’t stop fighting to right the wrong.

“Sometimes I ask myself why am I soldiering on, but anybody who has been through something like this would press it,” he said.

“It’s just not right… my dad would say ‘how could you do this to us? We were always honest and contributing people’… I feel a responsibility to continue it on behalf of myself and the family. The company was bankrupted.

“What I’m asking the province to do is acknowledge that this was a major screwup.”

kevin.rollason@freepress.mb.ca