Mayor Jim Watson plans to rescind the city’s encroachment fee deal with the owner of Somerset House if construction on the building has not started by the next finance and economic development committee meeting on Oct. 7.
Council approved a reconstruction design for the dilapidated building in December 2013.
But construction still hasn’t started and Watson says he is frustrated the building remains an eyesore in a prime corner of the city.
“This is a beautiful building with a lot of history in it and we’ve tried to be accommodating to the owner and I’ve seen precious little work done to improve not only the stability but also the beauty of the building,” said Watson.
Somerset House is a heritage building located at 352 Somerset St., at the corner of Bank Street.
It was known as the home of the Ritz Hotel from the 1930s to the 1960s.
In October 2007, construction workers knocked out a key support in the basement of the building during a remodel.
This caused part of the southeast wall to collapse, trapping a construction worker in the rubble for nearly two hours and forcing the police to close the four surrounding city blocks for nearly two months.
A legal battle then began between the city and Tony Shahrasebi, owner of the building, which was not settled until 2012.
Shahrasebi agreed to pay the city $650,000 in policing and firefighting costs and to end a $5-million countersuit. The city waived additional encroachment fees to block the sidewalk on Somerset Street.
In March 2014, Watson asked city staff to update council on what permits Shahrasebi’s company, TSK Holdings Inc., had applied for and been issued for the building, as well as the total value of encroachment fees waived to date.
At the time, council voted to extend the period for not charging TSK Holdings, but Watson says he wants to raise the issue again because taxpayers should not be subsidizing an estimated $20,000 per year in encroachment fees.
“A deal is a deal,” Watson said. “We’ve lived up to our end of the bargain and he hasn’t lived up to his end of the bargain.”
Watson says he is inclined to to rescind the deal unless he has some evidence or guarantete the owner has started the work.
He said that he will raise the issue at the finance and economic development committee meeting and then present the motion to council.
“It’s time for him to step up and take some pride in his building and his city,” Watson said.
Jeff Morrison, the former president of the Centretown Community Health Centre, started a petition in October 2012 calling on Shahrasebi and the city to resolve their issues and renovate the building.
He says he’s thankful that the mayor has taken a personal interest in this property, and hopes Shahrasebi will put forth a development plan and timeline.
Morrison says if there are no other options, he would support Watson’s motion to rescind the encroachment deal.
“I think residents of Centretown spoke very loud and very clear when I did my petition two years ago that they want to see this property redeveloped,” he says. “If the owner is not willing to do his part, then I don’t think the city should be doing their part either.”
Shahrasebi says he is currently in negotiations with a potential tenant, but declined to comment further.