Lawsuits tie up site of collapsed historic hotel

After more than a century at the centre of downtown Toronto, the façade of the former Empress Hotel crumbled. Then a suspicious fire ripped through the vacant heritage property eight months later, leaving it in ruins and triggering its demolition.

The destruction of the three-storey, 19th-century red-brick building – which was home to bustling businesses including the popular Thai restaurant Salad King before the wall collapsed two years ago – has left a void in the downtown retail strip. Neighbours have since banded together to initiate a planning process, in hopes that prominent buildings don't end up the way 335 Yonge did. Ryerson University, which has a Yonge Street entrance flanked by the empty lot, is a keen player. "The neighbourhood pulled together and said, in a bunch of ways, that we care about this street," said Ryerson vice-president Julia Hanigsberg.

However, the Globe and Mail has learned that the Empress property is at the epicentre of three recent lawsuits, which threaten to hold it hostage for years. The ground, now covered with gravel, has been relegated to temporarily housing contruction equipment, and its owners have been reclusive in recent months.

The Lalani family began leasing 335 Yonge in the 1980s and subsequently bought it, according to property records. The numbered company that now owns it, 2160943 Ontario Ltd., lists its directors as four men with the last name Lalani who have addresses in York Region.

The owners and their lawyers either declined to comment or did not respond to several requests for interviews.

One of the tenants at the time of the wall collapse, Wanda's Belgian Waffles Inc., is claiming $900,000 in damages from the owners, including for loss of business, loss of equipment and misrepresentation of the "poor structural state" of the building. "We kind of lost everything at that location," co-owner Robert Ayoub said in an interview.

It was obvious years before the collapse that the façade and towers needed to be repaired, and a basement tenant was complaining of leaks, Wanda's alleges in a statement of claim filed in court in April.

Wanda's, which also claims it is owed $13,125 for an unreturned security deposit and rent, is asking the court to put a certificate of pending litigation on the site. "It would bind the land – like a mortgage, it becomes security for the claim," Wanda's lawyer Andrew Lewis said.

Former neighbour, HMV Canada Inc., is also suing the Lalanis, as well as the City of Toronto, for $700,000 in damages.

HMV alleges in its statement of claim, filed early this year and amended in June, that the owners and city were negligent and allowed the fire to spread to their building, causing "significant damage." Failing to provide adequate security, improper maintenance or allowing squatters are among the ways they may have been negligent, the company alleges.

In July, police charged 53-year-old Stewart Poirier, of no fixed address, in the alleged arson.

Last month, the city filed a notice of intent to defend against the lawsuit and the owners filed one this week. None of the claims have been proven in court.

Since the fire, there have been a few events at the site. After one food truck gathering last December, Al Lalani Jr. agreed to an interview with The Globe. Mr. Lalani identified himself as the son of one of the owners and said he had taken charge of the property.

When asked about past concerns about the heritage building not being maintained, he said his family had been working on restoring the structure for years prior to the wall collapse. Before he took over, he said the person primarily in charge of the building was his uncle Noori, who is listed as the president and as a director of the numbered company.

Al Lalani Jr. said that the destruction of the building hadn't created a devastating economic loss for the family. "It's a big deal to lose that revenue, but we're working towards restoring it," he said.

He said he wanted to turn his family's site into "a signature property that sets a precedent for new development on that strip."

Documents filed in court in Sarasota County, Florida, last month suggest Noori Lalani may be facing financial woes. He's the operating manager of Maya Development Company, L.C., which owns 44.7 acres of vacant, lightly wooded commercial land in North Port.

The Florida Community Bank, National Association, filed a claim against the company and Mr. Lalani last month, alleging monthly payments of interest were missed in April, May and June this year. The bank says it demanded $58,275 from him in June and is now moving to foreclose the mortgage that was taken out in 2004.

Noori Lalani, reached on his Florida cellphone, declined to comment on the allegations there and in Toronto. A motion to dismiss the bank's claims, which haven't been proven in court, was filed by Mr. Lalani this week.

In Ontario, the Lalanis have launched a lawsuit against Intact Insurance Company. The claim, filed in court in April says Intact "wrongfully denied coverage for all losses and damages sustained as a result of the wall collapse." The insurance was for up to almost $4.7-million, according to the claim. A spokeswoman for Intact said that although the claim has been filed in court, Intact hasn't been served yet because the company is still in talks with the owners' lawyer.

Local councillor Kristyn Wong-Tam said she hasn't heard from the owners about their plans this year. She said there were discussions last summer about having an open-air market or cafe but nothing materialized. "Anytime we see a property in the state that the vacant lot is in... it should be a concern for any general community," she said. "It's probably more of a concern for iconic Yonge Street."

Although he didn't have a time-line on any development, Al Lalani Jr. last December echoed his neighbours' concerns. "The faster we develop and relieve that dead space from the City of Toronto," he said, "the better it is for the community and for us."

With files from Stephanie Chambers