Interest expressed in controversial Penticton property
One of the original backers of the deal to build a dormitory for hockey students in Penticton says he is still interested in making the project work.
Alex Fraser, a venture capitalist and principal with Citation Ventures, was working at providing funding for the failed dormitory deal before it fell apart in February, leaving a range of tradespeople and contractors unpaid for the work already done on the site near the South Okanagan Events Centre.
Fraser said that like the contractors, they invested time and money in trying to make the deal work, as well as a lot of frustration dealing with Loren Regan, the principal developer. The trigger for the final collapse of the deal was when Regan was accused of fraudulent business dealings in relation to his company, Okanagan Hockey Elite.
While they city is still considering the future of the nine city-owned lots along Eckhardt Avenue, Penticton Mayor Dan Ashton expects they will eventually be put up for sale again. He said the city is willing to consider proposals, but was cautious about speaking to Fraser’s comments.
“We would like to see something to be of benefit to the entire city,” Ashton said, pointing out that Fraser’s company had not participated in the recent request for proposals on the property.
In April, the City of Penticton started a RFP process, trying to find a new purchaser for the properties, which are now encumbered with about $1.6 million in liens from the unpaid contractors. That process closed in May, and last week, after discussing it in-camera, council reported that none of the three proposals received were acceptable and they were terminating the RFP.
“We had high hopes,” said Wade Wagstaff, owner of Grizzly Excavating. “Everyone was sitting back hoping that a deal would come out of the RFP process.”
While Wagstaff can’t speak for the other contractors, he said he hasn’t been contacted by anyone from the city about his lien on the property. He describes the loss of income from work done on the dormitory as devastating, especially since he made good with the people working under him.
But, Wagstaff said, he is not just going to roll over and accept the loss. While he is not sure about the next steps, he thinks it may end up in legal action if the liens aren’t eventually dealt with.
Fraser said he expected the RFP process to fail, which is why Citation had not participated. However, he continued, he had told Ashton prior to its start that his company would still be interested in setting up another deal to build a dormitory or similar building on the lots, though it would have to be on a smaller scale than the original plan, which was too big to be profitable. But a scaled-down project, he said, coming out at $10 to $12 million, would be possible.
“I still think there is a deal to be done,” he said, adding that he and his partner would want a 30-day window to talk with the contractors holding liens and work out a deal to pay them. If an agreement can’t be reached in that time, he said they would turn it back over to the city.