Bizarre backstory revealed in fate of troubled B.C. hotel

Last month, Port Alberni's city council ordered the demolition of a pub and hotel in the heart of the city's tiny downtown. Beyond the business, the Port Hotel's 28 residential units also provided low-barrier housing to some of the community's hardest-to-house residents. 

The town has grappled with conditions in the Port Hotel since at least 2020, when city council first considered a report filled with pictures of the building's deficiencies and the man behind the numbered company that owns the property promised to do better.

Things came to a head this year when renewed complaints culminated in the discovery of asbestos inside the building's walls and the evacuation of the remaining tenants. 

A lawyer for owner Peter Wang made a last-ditch appeal to stave off demolition, but councillors wouldn't budge, meaning destruction is now imminent. 

As he argued for more time, the lawyer claimed Wang had been subject to a kind of corporate identity theft — replaced overnight as director of his company by a woman who took over all correspondence with the city and demanded rent from tenants under threat of eviction.

Left unsaid was that the woman and Wang were former business associates found liable in B.C. Supreme Court earlier this year for a scheme that "preyed" on the wishes of Chinese citizens hoping to fast-track immigration to Canada through investments in B.C. businesses.

'A 2-sided investment'

As CBC has learned, their legal battles provide insight into the fate of the Port Pub and Hotel, as well as pubs in Nanaimo and Gabriola Island — and a cemetery in Saskatchewan. 

The situation raises questions both about the responsibility of investors in low-barrier housing and the duty government has to ensure those properties are well maintained.

"I don't have a housing department. And we don't own residential housing. We don't have a housing commission or anything like that, or a housing authority," said Mike Fox, Port Alberni's chief administrative officer.

"And if we did, we would be upheld to a different standard than some owners of private facilities."

The Port Pub and Hotel is situated a stone's throw from Port Alberni's waterfront quay, up a wide main street that also hosts city hall, the Salvation Army, a hopping Mexican restaurant and the busy Wildflower bakeshop and café.

Tanice Mast works, lives and operates her store — Tenacious Heart Studio — one block up on the opposite side of the street. The deterioration of the condemned hotel and pub is a sore point.

An empty lot next door housed what she jokingly calls "the bike shop" — a place to move stolen bikes and bike parts. Then there's the spillover of drug use, garbage and human waste that finds its way onto the street.

Mast says the building is a constant source of complaints to bylaw officials, police and fire officers. She could say the same for many of Port Alberni's other empty or seemingly abandoned buildings.

"I'm completely baffled by the attitudes I've seen of some of these building owners because it would never cross my mind to let something go to such waste. And — even further than waste — to start contaminating the areas around it," she said.

"If you've invested in a property, that should be a two-sided investment. Where you get the benefits of having such an investment, but then your neighbours should also be enjoying benefits of having that owned by responsible individuals."

'The subject of a fraud'

A report to council in January detailed the city's history with the Port Pub and Hotel dating back to 2020 when council agreed to "refrain from considering enforcement measures so long as significant and appropriate progress" was made fixing bylaw and fire code violations.

Despite that promise, the property had Port Alberni's highest police, fire and bylaw call volume. The most concerning violations were under the fire code: "emergency doors not working as intended, tied open or barricaded with garbage piled at the bottom of the fire escape."

"There is significant garbage accumulating inside of the structure, often extending out into the alley, sidewalk and fire exits, obstructing egress," the report said.

"Communal washrooms are out of service, missing doors off of units, padlocks on the outside of doors, exposed wires, drug paraphernalia, rats, interior ceilings, walls and doors are full of holes, leaking water, missing drywall and black mould is visible throughout the top and bottom floors."

In a plea for clemency before council in July, Wang's lawyer — Micah Goldberg — said while "some of these issues are structural, a significant number are not."

"There are no easy solutions to several of these issues, the effects of which are related to the psychological condition of the tenants," he wrote in a brief submitted to council, which cited "the ongoing mental health crisis the province is experiencing."

Goldberg told councillors his client was taking remedial steps to repair the property by installing smoke alarms and carbon dioxide detectors, fixing escape doors and sending a safety plan to the fire department.

But he said those efforts were interrupted when the B.C. Online account belonging to the numbered company through which Wang owns the hotel and pub was compromised and the names and addresses of the directors were changed.

"It was essentially the subject of a fraud that it has only recently been able to rectify," Goldberg told the councillors.

"When my client retained contractors to enter into the property, they were restricted by the individual we believe was responsible for the fraud, who sent those individuals away. That same individual was responsible for attempting to collect as much rent as possible."

Railways and cemeteries

In a lawsuit filed earlier this year to regain Wang's control of the numbered company, Goldberg names the "individual" he spoke about in Port Alberni as Qian Fan — also known as Sophie Fan.

As recently as February, Fan and Wang were co-defendants in a B.C. Supreme Court ruling won by Chinese citizens who claimed the former business associates promised to help them find a path to citizenship through investment in B.C. businesses.

"The defendants preyed upon the plaintiffs' wish to immigrate to Canada with a scheme designed to use investment funds for their own purpose and with no apparent intention of actually assisting the plaintiffs' immigration efforts," wrote Justice Nathan Smith.

"The targets of this scheme were made vulnerable by their lack of knowledge of English or of Canadian immigration rules and requirements."

In reaching a final judgment, Smith untangled a dizzying array of corporate ownership to explain how one investor — a Chinese railway magnate — came to believe he might establish a mini-railway on protected property in Squamish's agricultural land reserve.

The judge found another investor — the former owner of a Bible Park in China — likely provided funds to buy a share of a cemetery in Moose Jaw. 

And he said that both investors were "induced" to purchase Gabriola's Skol Pub in a deal that saw Wang installed as the pub's manager.

"During the time Mr. Wang claims to have been managing the pub, he had also agreed to manage a restaurant in Chemainus and a pub in Nanaimo for other clients while giving an undertaking to the government of Saskatchewan to be the full-time manager of a cemetery that was being purchased in that province," Smith wrote.

In a "note on credibility," the judge said he rejected both Fan and Wang's evidence "where it conflicts with any other evidence."

"I found their evidence at trial to have generally been contrived, concocted and fabricated with an intention to mislead the court," the judge said in a later proceeding to assess special costs.

"This pervasive untruthfulness amounts to reprehensible conduct."

'I was so naive'

Fan has not responded to the lawsuit filed to wrest back control of the numbered company that owns the Port Pub and Hotel, but in an email to the city presented to council, she claimed a share in the founding corporate ownership.

She also accused Wang of creating "a situation in which the burden of the property will be dumped on someone else, including the financial and legal burdens to come."

The lawsuit against Fan claims at least $300,000 in penalties from the city as well as the cost of "repairing the extensive damage to the Port Alberni property and the costs of appealing the Port Alberni orders" to demolish the building.

In a telephone interview with CBC, Fan claimed she "established" the numbered company that came to own the Port Pub and Hotel — but said she only found out last January the corporate shell actually owned physical property.

The single mother says she doesn't have the money to respond to the lawsuit.

She says she accepts the judgment in the case where she and Wang were co-defendants, but does not agree with the judge's assessment of her actions.

"I was so naive," she said. "The customers, they trust me.... They thought I won't cheat them, and I did not cheat them, but the result is so bad."

Fan says she is supported by relatives and makes what little extra she earns buying items at thrift stores that she sells online.

"My life was destroyed," she said.

Wang did not respond to an email from CBC asking for comment. Goldberg said the request had been sent to a different legal firm responsible for handling matters concerned with the pub and hotel.

'The economic basis'

In addition to a "practical" and "moral" basis for keeping the Port Hotel and Pub standing, Goldberg also laid out "the economic basis."

The property was assessed at $1.16 million last year, the bulk of which — $936,000 was attributed to the value of the building.

Goldberg estimated the cost of remediation at nearly $628,000 — on top of the $300,000 in penalties owed the city.

"The value of the property is based almost entirely in its structure, not the land. If the structure is demolished, 105 (the company) will not have sufficient equity to pay for the demolition and penalties." he wrote in a submission to council.

"In addition, 105 prefers to collect the rents that would flow from the remediation rather than the demolition, which would almost certainly be followed by a sale."

B.C. Housing says the agency didn't provide any funding to the private owners of the Port Hotel and Pub but assisted the building's 39 residents in finding housing on two hours' notice after the discovery of the asbestos.

In background provided to CBC, the Ministry of Social Development and Poverty Reduction said, "The department provides funds for shelter/rent for clients, but it is up to our clients to decide where they live."

Following the lawyer's presentation, Port Alberni city Coun. Debbie Haggard said she appreciated Wang's legal difficulties.

"But I don't feel that's an excuse to let the property deteriorate as badly as it has and to become in such a state that the tenants had to be evicted for safety and health reasons," she said.

"And all this time, your client has been collecting rent from the tenants that have lived in this property."

Goldberg said he couldn't provide "ironclad guarantee assurances" his client wouldn't face challenges in the future associated with providing low-barrier housing.

He cited the legal problems, saying, "While it's true my client was in receipt of some rents that were being provided by the government, other rents, we understand, may have been redirected to someone else."

'They don't care'

As she cast her vote for demolition, Coun. Cindy Solda said the city has faced similar situations with other dilapidated buildings. 

In fact, the fate of another chronic problem building was considered at the same 2020 meeting where the Port Pub and Hotel's troubles were raised. Former owner — Martin Chambers — spoke to council via video.

Chambers, who died in 2022, spent nearly 13 years in a U.S. prison for laundering money for a Colombian drug cartel. But he didn't mention that in his presentation.

"People who own buildings are not necessarily living in Port Alberni, and they don't care," Solda said.

"That really bothers me. I don't think anybody should have to live in conditions like the people that lived in the Port Pub. The city has been knocking on the door, saying, 'You need to fix it, you need to fix it.' We have not heard anything, and so my faith is gone."

Mast thinks demolishing the building is an "important precedent to set because it gives the neighbourhood the tools to take these buildings on and demand pretty reasonable standards for the building owners to follow."

She says housing in Port Alberni is expensive, and rentals are hard to find.

She can understand why property draws investors — but says owners need to be held accountable to the people who pay the rent. Especially if the money ultimately comes from government.

"Where money is being funnelled from government directly to property owners, I think there should definitely be presence," she says.

"You get what you inspect. You can't just assume these places are good places to live or safe places to live. So I think the government's responsibility in that is to ensure that wherever they're spending money, deserves that money."