Source: St. Catharines Standard

A historic hotel-turned-student residence is on the market under power of sale — but the owner isn’t giving up on the downtown property.

The 1850s-era building at 30 Ontario St. was recently listed on an online real estate site for $5.8 million, after the owner defaulted on a $3.9-million loan from the State Bank of India (Canada).

Michael Oana, president of residence operator Castles for Students, said his company ceded control of the property to the bank to deal with a costly sprinkler installation ordered by the Ontario Fire Marshal. But Oana said Thursday “it was always understood” the company planned to pay off its loan and find new financing.

“We have no intention of allowing this property to be sold under power of sale,” he said.

Oana said the recession frustrated several refinancing attempts, making it impossible to deal with the “saga” of fire orders that have dogged the residence.

Owners of the 113-bed residence were told by fire officials to install sprinklers and inside hookups for fire hoses in 2006 — less than a year after a city fire inspector gave an all-clear to the newly-purchased building.

The company successfully sued the city and recouped $500,000 from the city’s insurance company. But Oana said the money didn’t cover the cost of the needed fire renovations.

The company is charged with not complying with a fire marshal’s order. Chief fire prevention officer Jim Waycik said the matter should go to trial later this year.

The property is now run on behalf of the State Bank of India by local property managers Wilson Blanchard. Real estate agent Robert Miles said the needed fire upgrades are almost done.

If the building is sold, a new sprinkler and standpipe system “will be 100 per cent operational,” Miles said.

Waycik emphasized the popular student residence was not a fire hazard before the repairs because the owner had a constant “fire watch,” paying someone to be emergency eyes and ears for the building. A final inspection of the building is pending, but Waycik said the residence already has sprinklers on all occupied floors.

“It’s in great shape. We are much, much happier about the building now,” he said.

The bank has done close to $750,000 worth of renovations to the former Welland House Hotel. Those upgrades may attract a new buyer, but Miles said the current owner can also repay his loan and regain the property.

That has been the plan from the start, Oana said.

“We’ve been in the position to pay out the bank for several months,” he said, but “outstanding details” around new mortgage financing still need to be resolved.

“I expect it will be addressed within a matter of the next few weeks.”