The former Bank of Nova Scotia building, located at 291 Water Street was auctioned at St. John’s City Hall Tuesday for less than half its assessed value and more than $600,000.00 less than the price it was offered for an earlier city tax sale.

The property – assessed at $500,000.00 – was bought by Bill Mahoney on behalf of Regal Realty Ltd. for $225,000.00. The bidding opened at $50,000.00 after a suggested $300,000.00 opening mark.

The city wasn’t able to unload the building March 2 during a sale of properties that owed back taxes to the capital city. The Water Street property was in arrears to the tune of $833,599.30.

Mahoney said while he was happy to get the building, he had been prepared to pay a lot more than $225,000.00. “I certainly would have (been willing to pay the assessed value), but that’s fine,” he said following his successful bid. “That building is a project.
There’s a lot of work to be done, so now I have a little more latitude in terms of the renovations I’ll do, and I’ll do them more quickly.”

Mahoney also owns the adjacent Murray Premises and O’Dwyer Manor, which house a hotel and apartments, respectively. Mahoney is not sure what he’ll do with the building yet. “I have a number of options available to me, but right now I have no specific plan for the property,” he said. “There are some synergistic advantages I’d have with that property - it fits my complex of properties very well there. “It certainly would make a very nice office building in the downtown. There’s a great demand for Class B office space and that could certainly fill that void. As well, there’s tremendous demand (for) residential properties…”

Linda Bishop, senior legal counsel for the City of St. John’s, said she’s pleased the building was sold, and while the city didn’t recover all the taxes owed, the loss is not significant. She said it’s better for the city if the building is put to use again rather than sitting empty on a prime downtown corner lot.

“He was a very interested party and certainly a businessman in the city who has developed properties and done well, so we look forward to see something go in that lovely building,” Bishop said of Mahoney’s purchase.

Mahoney said he hopes the city will auction off properties that are in arrears more often, since it benefits everybody if empty buildings are renovated and put to use. He said he’s confident there will be some form of activity at 291 Water Street within six months. “The ultimate goal is to get that building occupied, put it to good use, create activity in the downtown,” he said, “and that’s exactly what I intend to do.”

Winning bidders at city tax-sale auctions must immediately pay at least 10 per cent of the total purchase price in the form of cash, certified cheque or bank draft. The remaining balance must be paid within 30 days.

The Telegram, Wednesday, March 17, 2004. Bradley Bouzane.