VANCOUVER -- Two derelict single-room occupancy hotels in the heart of Vancouver's Downtown Eastside are now city property.

The City of Vancouver announced Friday evening that it had reached a settlement with the owners of the Balmoral and Regent hotels to expropriate the properties, concluding a process that began last year and avoiding further litigation.

In a news release, the city said terms of the settlement prevent it from sharing how much it paid for the two buildings.

When Vancouver City Council voted to expropriate the two hotels last year, it followed a recommendation from city staff that the owners should be paid $1 for the properties.

The low price was a reflection of the poor condition of the properties after decades of underinvestment. The Balmoral Hotel was deemed unsafe and closed in 2017, and the Regent was closed the following year. The two properties were subject to years of enforcement and legal action from the city.

The owners of the buildings filed for a judicial review of the city's expropriation, arguing they were entitled to greater compensation for the properties. Late last year, a lawyer for the building owners told city council his clients had received private offers ranging from $7 million to $12.5 million for the derelict hotels.

In its statement Friday, the city said it decided to settle in order to "mitigate the financial risk posed by the upcoming judicial review and potential claims for greater compensation," as well as to enable city staff to move forward in planning for the future of the properties.

Vancouver plans to work with BC Housing to turn the buildings into "safe and secure low-income housing," the city said.

“Bringing the Regent and Balmoral into public ownership marks a hopeful new beginning for residents of the Downtown Eastside and something all residents should be proud of,” said Mayor Kennedy Stewart in the city's statement. “Downtown Eastside residents will be at the centre of creating a new vision for these two sites, and indeed the entire community."