The Bizarre Case of the City Vs. Granite Ventures

In a truly bizarre scene at City Hall yesterday, council spent six hours playing judge and jury for an eccentric case involving a fire, an alleged muck-up by City administration, and around $160,000 in damages claimed by a building company, owned in part by their colleague Coun. Niels Konge.

The story began just over a month ago, in the early hours of Saturday, Nov. 9, when a fire ripped through an abandoned building on Franklin Ave., between the Centre for Northern Families and a new 24-suite condo development by Granite Ventures. The week before the fire, City inspectors had granted nine conditional occupation permits for the building, even though the building lacked siding. They were scheduled to return for further inspections on the Monday, but the fire set off a chain of events that appears to have quickly spiraled out of control.

After learning that Granite Condos had been partially occupied the night of the fire, and that the fire alarm in the building had not worked properly, on Tuesday Yellowknife fire chief Darcy Hernblad advised that a Do Not Occupy Order be posted until proper siding was installed.

“With the lack of siding you’ve got all kinds of voids, little nooks and crannies,” said Hernblad, explaining his rationale for the No Occupy Order to councillors. “If the fire gets in behind that, it’ll get some momentum, it’ll get started really good. Basically, we’ll end up with a huge fire, and it’s very difficult for the Yellowknife Fire Division to deal with these fires when they get such a huge start.”

Hernblad himself didn’t issue the order for residents to leave the building – instead the City’s building inspectors issued it under the Building By-Law on the advice of administration. A few hours later, after meeting with the project’s disgruntled proprietors Greg Littlefair and Niels Konge, a compromise was reached, allowing the nine permitted occupants to stay in the building if a 24-hour fire watch was in place. Two days later, the City followed up with an official Fire Watch Order, mandating that all units beyond the permitted nine be vacated; an order that appears not have been followed by Granite Ventures.

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On Nov. 17, the company appealed both the (then-defunct) Do Not Occupy Order and the Fire Watch Order. Ten days later, they sent another letter demanding significant reparations from the City for the financial damage the orders caused the company.


The crux of the case, as presented by Granite Ventures’ lawyer Glen Rutland on Monday, was that the City had acted in an “unreasonable and arbitrary” manner in issuing the orders, and that, “by refusing to grant further conditional occupancy permits, the City has forced Granite Ventures into an untenable position.”

The faulty fire alarm was fixed on Monday, before the order was issued, claimed Rutland. That same day, design professionals from PSAV Architects confirmed that the yet-to-be-permitted units had no “life safety issues.” Moreover, if the building was deemed safe enough for nine people to move in when it was inspected on Nov. 2, why was it all of sudden considered unsafe for everyone else to move in?

“It’s not a fair process, and it’s not fair to punish Granite Ventures, who simply rely on the City’s indications,’ argued Rutland. “Granite ventures provided them with a completion date, they got occupancy, there’s no reason to believe that was going to change and there was no new information that the City had to warrant that change. It’s not reasonable.”

For their trouble, Granite Ventures demanded reparations from the City – effectively, though not technically, suing them for roughly $160,000 (the amount Rutland claimed the whole debacle cost Granite Ventures in lost rents, fast-tracking the installation of siding, and, of course, his own legal fees). If the City couldn’t pay, well, it could always waive several permitting fees expected to cost Granite Ventures tens of thousands of dollars.

City strikes back

The Granite Ventures argument held little water from City administration’s perspective. Yes, perhaps City inspectors had issued the first nine permits before they should have; but the orders following the fire were a reasonable response to a public safety problem.

“In light of the new information we had after the permit was posted, with the fire occurring next door, with the chain of events that occurred, it was a very serious situation that we were compelled to act on,” said Jeff Humble, the City’s director of Planning and Development. “We would have been negligent as directors and managers if we failed to act on this information.”

But then why was it safe for nine people to stay in the building but no more?

All part of the compromise, says Hernblad: if a fire should occur, “the less [occupants] the better… I don’t know what the magic number is. But I know nine is better than 19.”

To make matters even more complicated, the City’s lawyer Kerry Penney claimed that the whole issue was moot, because City Council did not have a legal right to hear this kind of case, let alone award damages. It was a nifty bit of legal wrangling: the Building By-Law specifies a whole range of things that can be appealed to council – Fire Watch Orders are not on that list.

This argument didn’t sit well with Rutland: “They’re using the Fire Watch Order to do the same thing as a Do Not Occupy order… But we can’t appeal that. Had they issued a Fire Marshal’s Order, we could appeal that, we could have due process… It’s the City essentially using a tool that they have to avoid any sort of review of their decisions.”

A little weird

No doubt the situation is serious. But with this last line of argument, the scene took on a certain comic dimension: here was city council, taking six hours of their day to hear arguments that it’s unclear they were even allowed to hear; they were being asked, after hearing the arguments, to decide whether they were legally allowed to hear those same arguments, (even though no one on council has a legal background); and finally, they were being tasked with deciding whether or not to open up the public purse to repay a private company which a fellow councillor partially owns.

They have 60 days to parse through this tasty dog’s breakfast, though Mayor Heyck says they should have a decision within 45 days.

For Littlefair, the whole situation is just one, particularly explosive, example of ongoing tensions between builders and City admin: “You can talk to just about any builder and he’ll tell you about his frustrations dealing with these bylaws and the interpretation of the bylaws and the building inspections and the inconsistencies.”

For the City: “if there was a fire that occurred [in the building] and we were talking about lives lost [it would be far more serious]… And that was the really the fundamental issue with what we did,” said Humble. “We’re talking about life safety, and you can’t put a figure on that.”


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