Prison fight: Historic B.C. Pen property in New Wesminster faces foreclosure and legal battle

The remaining building from the infamous prison is a protected heritage site that is now the focus of skirmishes among real estate investors

A riverfront Metro Vancouver property that was once the site of murders, executions, riots and hostage-takings is now the focus of skirmishes among real estate investors, lenders and their lawyers.

Now, the storied property is the subject of fierce litigation between two families that came together to buy the site in 2021 before falling out, and a foreclosure action initiated in recent weeks by a lender alleging the owners haven’t made payments in several months.

Over the years, ideas have been floated to redevelop the property, including plans for a hotel, but at this stage, the property’s future is unclear.

“It’s an interesting building, because it has a sordid history,” said New Westminster Mayor Patrick Johnstone. “It’s an important part of the city’s history. But how to meld that with a modern building that is going to provide some service to the community and some value to the community is an interesting challenge.”

After the prison’s closure in 1980, most of its property was redeveloped into a residential neighbourhood. But one of the last prison structures still stands at 319 Governor’s Court — the gatehouse, a century-old two-storey building that looks like a castle. For years it was the main entrance to the prison and housed administrative offices.

“The fortress-like appearance was for many years the grim public face of the institution,” says the

property’s entry

in the B.C. Register of Historic Places. “The battlements, turrets, and towers, with the formal stairs approaching it, make this structure a landmark on East Columbia Street and a potent reminder of the site’s long historical occupant.”

In recent years, the gatehouse building has housed several commercial tenants, including offices, a daycare, nail salon, and a pub.

Last month, Autumn Sea B.C. Mortgage Ltd. filed a petition in B.C. Supreme Court seeking to foreclose upon the property. The property owners stopped making interest payments to the lender on a $3.1 million mortgage in July, the November petition alleges.

Public records show the property is owned by Governor’s Court Holdings, a B.C. company incorporated in 2021 shortly before purchasing the property for $5.08 million.

A lawyer for Governor’s Court Holdings filed a response last week, arguing the property is worth $6.67 million, and “there is more than sufficient equity in the property” for the lender and no basis for a court order of immediate conduct of sale. The lawyer, Avtar Dhinsa, did not reply to calls.

B.C. Assessment assessed the property at 319 Governor’s Court at $4.55 million for 2024, the same valuation as 2023.

The directors of Governor’s Court Holdings included members of two families, the Sodhis and the Bajwas, corporate records show, but the Bajwas ceased to be directors in March 2022.

Since 2021, the families have been locked in a legal dispute. In the claim and counterclaim, the two families accused each other of forgery, defamation, and “blatant abuse of process,” among other things. None of the allegations have been tested in court.

Viramjit Bajwa said the litigation has made it difficult to refinance the property, which has led to the recent foreclosure proceeding.

“We both need to get to our senses” and resolve the dispute, Bajwa said. If not, the property “will probably go on the auction block,” he predicted, which could mean losses for the investors.

“Development on this site is not entitled to the owner, but could be permitted by council, should it appropriately respect the heritage of the site,” the report says.

The property owners never submitted a formal application to city hall, a City of New Westminster spokesperson confirmed.

Bajwa believes the project has merit, saying “there’s a dire need for a hotel in New West.”

Sunny Sodhi said he does not care about Bajwa’s desire for a hotel.

“It doesn’t matter what he says. It has zero meaning,” Sodhi said.

Currently, Sodhi’s plan is to continue operating the property with the existing tenants, he said. “We’re going to sit on it for a while.”

Both men agree it will be in both sides’ best interests to end the litigation, refinance, and avoid foreclosure.

“Our lawyers will be working with the Bajwas’ lawyers to settle this case ASAP,” Sodhi said.

Sodhi said he is “1,000 per cent” confident they will be able to find new financing, pay out Autumn Sea, and avoid foreclosure.

“We are not scared,” he said. “There’s no way we’re going to let this property get away. We have invested over $2 million into this property. That’s a lot of hard-earned money.”

With research by Carolyn Soltau, Postmedia News