Absentee landlord sits on empty units as St. Stephen struggles with homelessness
Sam Farley | CBC News | Posted: February 12, 2024 10:00 AM | Last Updated: February 12
Town says it's hard to act on deteriorating properties, RCMP say owner usually unreachable
A Calgary landlord who snapped up 20 properties in St. Stephen three years ago is letting some sit empty as the town grapples with homelessness and a lack of affordable housing.
"I don't understand why you'd buy buildings and keep them empty," said Wendy Gilmore, who lives near 9 Schoodic St., a building that has been empty since tenants and squatters were evicted under a special law targeting drug activity.
Annette Penkala of Calgary, the owner of Starshine Properties, bought the buildings between December 2020 and December 2021 for more than $2.4 million. She doesn't own properties anywhere else in New Brunswick.
Three of her buildings — with nine, seven, and four units — are vacant, and neighbours say several others are never fully rented.
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Despite repeated efforts by email and phone, and a knock on the door of her Calgary home, CBC News has not been able to speak with Penkala. Even the RCMP say she's difficult to reach.
Municipal leaders in the southwestern New Brunswick town of about 4,600 say they don't know Penkala's plans for the properties. Nor can the town force Penkala to fix them up, the municipality says, citing strict provincial rules.
Penkala's local address is listed as 53 Prince William St., the office of lawyer Randall Wilson. When asked how to contact Penkala, he said in an email that he cannot discuss clients.
CBC News visited the Prince William Street address and was told by construction workers in the empty building that the lawyer had moved out "months ago."
Despite this, Penkala still lists the address in corporate and legal documents. Starshine is registered in Edmonton at the address of IncorpMaster, which offers small businesses an address to use for legal purposes.
Cheyann Matthews, co-founder of the advocacy group Take Back our Town, said there's no doubt the vacancies in what were once low-rent units, are contributing to homelessness in St. Stephen.
"Allowing someone to come in and create a monopoly where they buy up 20 or 25 properties — that's not OK," she said.
"That needs to be looked at and scrutinized under the biggest microscope, and there needs to be an understanding as to why that was allowed to happen in the first place."
Statistics from the Southwest New Brunswick Service Commission indicate 39.5 per cent of St. Stephen residents live in apartment buildings or other rental properties.
Almost half of these tenants spend more than 30 per cent of their household income on rent.
The waiting list for affordable housing in St. Stephen sits at 521 households, the province says.
But for townspeople, the problem is not just that some Starshine properties aren't being used for housing. It's also that the apparent neglect has invited other problems — including illegal drug activity among squatters — that are disruptive and worrying to neighbourhoods.
Property was site of a drug eviction
Everyone living at 9 Schoodic St., with seven units, was evicted in August 2022 under SCAN, which stands for Safe Communities and Neighbourhoods Act.
The program allows the province to shut down properties suspected of being used for illegal activities.
Today the Schoodic building is derelict, with a padlocked front door and most of its windows covered or broken.
Security cameras are smashed and a second-floor window swings fully open to the elements.
Following the evictions, squatters took over most of the nine vacant units at a Starshine property at 80 Union St., before they were cleared out of that building too.
Several neighbours, who declined to speak on record with CBC News, said the only legal tenants, an elderly couple, moved out in December.
Now, several windows are partially boarded up and an outdoor staircase to the second level is torn down to prevent access.
A video taken by a neighbour after the evictions shows trashed units, belongings strewn across every room and holes in the walls where wiring was ripped out.
'Constant calls for service,' RCMP say
Squatter activity at 80 Union frequently drew the RCMP, who police St. Stephen.
"It was constant calls for service," said Cpl. Peter Lambert.
"This building and 9 Schoodic Street are probably our two main draws."
Lambert said between 2021 and 2023, there were 140 calls about 80 Union, uncommon for a single address.
"I can understand [neighbours'] frustration and their anger, so they called quite often and even just to get our attention to be around that property because they just did not feel comfortable."
Most calls were for alleged mischief or minor assaults between residents, but Lambert said it still "binds up our system" because police respond to every call.
Gilmore said 9 Schoodic saw police, fire and other emergency workers respond an average of nine or 10 times a week.
Some residents tried to find a little humour in the constant sound of sirens.
"As we joked about it, it was the music of St. Stephen," Gilmore said.
"Our anthem, really."
Asked how 80 Union and 9 Schoodic have impacted crime, Lambert declined to answer on behalf of the RCMP but spoke personally.
"Those buildings did constitute a risk to public safety," he said.
Lambert said officers have made "constant, constant attempts" to reach Penkala.
"All our calls typically go unanswered," he said, adding that RCMP reached the lawyer representing Penkala, and even he "could not reach the owner."
Beyond fixing, local contractor says
Tim McGinley's family and grandchildren live near 80 Union.
A carpenter of over 25 years, he said the building is beyond renting to anyone and beyond fixing.
"I wouldn't even put a frickin' rat in them," said McGinley, who tried without success to get the Fire Marshal's Office to look at the building.
He, too, wonders why Penkala bought the buildings.
"I can't see how buying all these properties up and not doing anything with them, they're not being rented, it just seems kind of weird," he said.
He and other neighbours said some of Penkala's properties were in rough shape before she bought them.
Joe Sullivan, a now-retired local landlord, sold three of the buildings to Penkala and said he doesn't know her plans or why she chose St. Stephen.
Sullivan was asked if the properties were run down when he owned them.
"They may not have been in good upkeep, but they were all occupied," he said.
Starshine has two local property managers, Tim Densmore and Rachael MacEachern. They didn't respond to requests for interviews.
Town finds bylaw hard to enforce
St. Stephen Mayor Allan MacEachern said the municipality does have an unsightly and dangerous buildings bylaw, but it "takes a lot of time" to enforce, and the municipality can "only do so much with them."
He directed specific questions to CAO Jeff Renaud, who would not disclose whether Penkala's properties have been investigated, citing confidentiality.
The deputy CAO, Sean Morton, said the same thing last summer to residents who wanted the town to use the bylaw against another Starshine property, at 64 Marks St., which had no legal tenants but was deteriorating and being damaged by squatters.
In New Brunswick, a municipality's dangerous and unsightly premises bylaw is based on provincial legislation, and it must fall within the parameters laid out by the province.
The act requires landowner permission before an inspector can enter a property.
There are strict timelines allowing the landowner to reply, and for how long a municipality must wait before making a forced entry after notifying the landowner again.
Morton said it's at best a three- or four-month process, but can drag on to years if the property owner doesn't co-operate.
"They can comply one day, the file is closed, and then it can fall right back into the same state and we have to start all over again," he said.
MacEachern agreed the vacant units in the Starshine properties deepen the town's need for affordable housing,
"There's just not enough available this time, that's definitely part of our problem," he said.
"Housing is the main cause of one of our issues."
MacEachern declared a state of emergency in December after the death of a homeless man. Efforts to set up a shelter location since then were shot down by residents.
MacEachern said the municipality is looking at increasing tax rates for abandoned or vacant properties.
"In the end, this is business," he said. "How does having so many empty [buildings] make sense?"
Municipalities are not allowed to set different tax rates for individual properties, provincial spokesperson Clarissa Andersen said in an email.
Cheyann Matthews said she's disappointed with what she sees as Penkala's long-distance neglect.
"She doesn't have to come here, she doesn't have to face anybody . ... It's not right.
"There needs to be accountability."
Corrections:- A previous version of this story gave an incorrect figure for the number of St. Stephen residents who live in apartment buildings or other rental properties. According to 2021 census data, it is 39.5 per cent who live in rentals. February 12, 2024 6:42 PM