Brighton Block battle: Future of century-old building affected by litigation, forced sale

Four years ago, a local developer was almost ready to reopen a century-old building on Edmonton's Jasper Avenue. The Brighton Block had a storied history, panoramic views of the river valley and brand new Class A office space, but it would soon become mired in financial trouble and legal action.

The battle over the building, which has received more than $900,000 in city funds for historic preservation, reflects pandemic pains, the city's struggling commercial vacancy rates and the difficulties of rehabilitating rundown structures.

As the building at 9666 Jasper Ave. has sat mostly vacant in recent years, businessmen have been arguing in court about its value and future.

David Johnston, the city's principal heritage planner, says it's a shame the building has been empty. But, he added, with restoration work completed, the Brighton Block could be a "cornerstone" of the redeveloping Quarters district, just east of downtown.

"The stage is set for a tenancy in the building," he said.

Beginnings as a photographer's studio

The Brighton Block, which used to be called the Brown Block, was designated as a municipal historic resource in 2001. According to an architectural and historical assessment prepared for the City of Edmonton in 1988, photographer Ernest Brown had it built in 1911-12 as his photography studio.

The historical assessment called the Edwardian structure "one of Edmonton's more distinguished pre-World War I brick commercial buildings," with Beaux-arts influence.

Brown's studio had marble walls, Italian terrazzo floor and tropical palm trees. A 1913 Edmonton Journal article described the studio and reception salon as "the most complete and well-appointed, not to say beautiful ... in the west."

Brown, who had come to Canada in 1903 and became known as a community activist as well as a photographer, spent the most important part of his career in the building. His business collapsed after the First World War and he died in 1951.

According to the Alberta Register of Historic Places, various businesses have operated in the building over the years, including the Georgia Turkish Baths, known as the city's "oldest public steam bath."

The Ukrainian Canadian Archives and Museum of Alberta bought the Brighton Block in the early 2000s but sold it for $1.875 million to Ken Cantor, president of Primavera Developments.

Cantor is an officer, director and shareholder of Brighton Block Inc.

Over the next three years, Cantor led the building's transformation, preserving its exterior and adding three storeys with floor-to-ceiling glass windows.

CBC Edmonton toured the building in 2019. At the time, Cantor said he tried to save some of the original timber-framed concrete interior, but encountered dry rot and mould. He said he hoped the redeveloped building "would engender a renewed sense of pride in the city."

The pandemic, a forced sale and litigation

A land title certificate obtained by CBC News last year shows the Brighton Block had three mortgages: $1 million, which was later amended to $4.5 million, from Dale Johannesen and $3 million from PCL Construction Management. The third mortgage, for $4.5 million, lists a B.C. numbered company, Geoff Reed, Ken Cantor and Denise Cantor as mortgagees.

In a statement of claim filed in the Court of King's Bench in May 2021, Dale Johannesen said Brighton Block Inc. had defaulted on its mortgage and owed him more than $4 million.

Brighton Block Inc. filed a statement of defence the next month, saying it hadn't been given reasonable notice before the enforcement proceedings. Brighton Block Inc. filed a counterclaim, saying the mortgage lender had no right to have a pending lien registered on the land title.

Cantor, testifying in court last year, said the pandemic killed the company's leasing opportunities.

"It just fell off a cliff and never hit a bottom," he said.

According to court documents, one company pre-leased a floor of the building but abandoned it due to financial difficulties. Cantor's company, Brighton Block Inc., was working out of the building's sixth floor to fulfil insurance occupancy requirements.

One appraiser, in a valuation report, said soft, uncertain market conditions and increasing lending rates were compounding the property's problems.

Disagreement over property's value

In the fall of 2021, an applications judge found Johannesen's mortgage was enforceable and ordered a judicial listing of the property.

The Brighton Block was listed for sale for $9 million in February 2022. Court documents show some groups toured the premises but there were no offers.

Another disagreement emerged over the value of the property, with an appraiser for Johannesen, the plaintiff, finding the property was worth much less than the value assigned by the appraiser working for Brighton Block Inc., the defendant.

A numbered company offered to buy the Brighton Block in October 2022 for $4.82 million.

Applications Judge Lucille Birkett approved the sale of the building in November last year. Cantor's company, however, is appealing her decision. Brighton Block Inc. argues the judicial sale process in the foreclosure wasn't procedurally fair.

Court documents show Johannesen was paid net sale proceeds of about $4.5 million and the City of Edmonton received about $93,000 for an outstanding property tax balance.

Brighton Block Inc. tried to stop the sale of the building last year. The company's lawyer said in court that the offer did not reflect the property's value and the building should be relisted with a new real estate agent.

In an appeal of the judge's decision, the company says the judicial sale process was not fair and there were "reviewable errors" in the judge's reasoning.

In a written brief filed in April 2023, Johannesen said Brighton Block's appeal is moot since the sale happened and the mortgaged lands have been transferred to the buyer.

Cantor did not make himself available for an interview but said the company was pleased with the work and support received from the design and construction team and the city's heritage planning group.

Through a lawyer, Johannesen declined to comment and the building's new buyer also did not agree to an interview before publication.

Anomaly in Canada

Experts who work in the historical restoration field say repairing some features of heritage buildings can come with unexpected costs, but the Brighton Block story is not a common one.

"I haven't seen one that's gone through so many efforts by different people," said Andrew Waldron, executive director of the Canadian Association of Heritage Professionals.

He said the pandemic didn't really hurt the industry, though it may have prolonged some projects, and the climate crisis demands more buildings be preserved instead of demolished.

Because the roof wasn't fully complete during the previous restoration, water was getting into the building and accelerating its deterioration, said Johnston, the city's heritage planner.

The city gave a previous owner $150,000 in the early 2000s for rehabilitation work and $743,000 to Brighton Block Inc. for the same purpose in 2017.

Johnston said it's a shame the Brighton Block has been empty, but it could eventually be "a real jewel on Jasper Ave."