A budget estimates debate in the B.C. Legislature this week has shed some more light on B.C. Housing’s $12.8 million purchase of a Cherry Ave. apartment complex in Kamloops.

The three-storey, 42-unit apartment building at 435 Cherry Avenue had an assessed value of $4.2 million.

“How can this minister and this government justify paying literally over three times assessed value for a property that was sitting empty and was not having a big run by the development community, as the minister may have tried to indicate when it was first purchased, and they had to buy it before the development community would’ve snapped it up,” Kamloops-North Thompson MLA, Peter Milobar, said, during a nearly-hourlong back-and-forth with Housing Minister, Ravi Kahlon.

“This is a building that sat empty for two-plus years at a time when there are record rents being charged in Kamloops with almost zero vacancy percentage.”

Milobar said if the government was in a rush to buy the building, it would have happened a while ago.

“If the landlord had any interest in actually trying to leverage and get the repairs done in time to start creating revenue off of that building, that would’ve happened,” Milobar added.

“It sat empty for over two years in a hot rental market. This government paid over three times assessed value. Why is that?”

Milobar also referenced comments made by Kamloops-developer Joshua Knaak, who said he would not have paid more than $7-million for the property.

Kahlon told Milobar that an independent assessment of the property by Kelowna-based Appraisal West valued the property at $10.4 million. He also said the actual purchase price was $11.2 million, with the remaining $1.6 million going towards things like closing costs, legal fees, and property transfer taxes.

Kahlon also noted the appraisal did not account for about $400,000 in renovations done by the previous owner that was required after the building was damaged by a fire in Jan. 2021. He also said the apartment building should be ready to open  in about six months once additional renovations have been undertaken.

BC Housing will own the building with the provincial Crown agency currently in the process of choosing a society to manage operations. The government says the building will be available to low- and moderate-income families, seniors, individuals, and people living with disabilities.

“We have significant pressures that we’re facing in Kamloops and the region around Kamloops,” Kahlon said. “We have more and more people who need an adequate level of housing and need it fast.”

“What we’re doing here is providing 42 affordable apartments for low- and moderate-income families in Kamloops.”

– With files from Brett Mineer