Land along downtown Kelowna’s waterfront is prime real estate and now the city owns several parcels of it after the municipality made a big purchase.
“We do need to start to build something that would benefit the overall community on this very prestigious location,” said Kelowna mayor Tom Dyas.
The city has purchased three properties from developer Westcorp, paying $27.8M.
“We are holding the property at this point in time, when somebody looks at coming to develop the property, they would then buy the property back from the city,” Dyas said.
The acquired properties include a large office building near the Queensway bus loop, the Kelowna Marina, in front of Kerry Park and a parcel of land across the street from the park, which was the former site of the Willow Inn Hotel.
Westcorp had hoped to develop that piece of land, currently a parking lot, into a world-class hotel.
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At one point, the company even provided conceptual drawings of its vision.
Westcorp first proposed a hotel and convention high-rise development for the site more than a decade ago ,but with the project plagued with delays and expired building permits over the years, it was unable to move it forward.
“It became a question whether or not we would actually see this site developed…so we started to have discussions with Westcorp,” Dyas said. “We do need to look at advancing this project.”
Dyas said it’s those discussions that led to the multi-million dollar purchase, which required the city to take a loan from the Municipal Finance Authority.
“The Municipal Finance Authority is set up for municipalities to be able to provide financing at the most attractive rates and the most attractive terms possible,” Dyas said.
“We are holding the property at this point in time. When somebody looks at coming to develop the property, they would then buy the property back from the city,” Dyas said.
Dyas added that the mortgage will be covered by revenue currently generated at the three sites.
While taxation will not be impacted, according to Dyas, the Taxpayers Federation criticized the city’s move.
“The city needs to be focusing on core services, not role-playing as property developers and risking taxpayer money to do it,” said Carson Binda, the B.C. director for the Canadian Taxpayers Federation. “Those interested parties should be coming forward and developing this land without involving taxpayer cash at all.”
On the streets of Kelowna, reaction to the large purchase and loan was mixed.
“I’m ok with it,” said Diane Brodeur. “I do hope they put on height restrictions when they do develop there.”
“I think it’s pretty excessive,” said Linda O’Farrell, another Kelowna resident. “And I think we are overbuilt downtown anyway.”
In an email to Global News, the seller and would-be developer of the site stated, “Westcorp has long believed that a hotel on this key development site was the right thing to do for the City of Kelowna. We very much look forward to this vision being realized.”
Now that the city has purchased the land, it’s turning to the services of Avington Financial Limited, an international brokerage specializing in hospitality, to bring the longtime vision to reality once and for all.
“This has now opened it up worldwide to a substantially larger number of considerations,” Dyas said. “And I think when it becomes a larger audience, there’s a much greater chance of success.”
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