Century-old stumbling block in city plans for hotel

Restriction has thrown a stumbling block in the City of Penticton’s plans to promote a hotel next to the South Okanagan Events Centre.

A century-old property restriction has thrown a stumbling block in the City of Penticton’s plans to promote a hotel next to the South Okanagan Events Centre.

Additional research on the land title turned up a 1912 indenture restricting the use of the property to parks, sports and recreation, a horse racing track or for public benefit.

Mayor Andrew Jakubeit said the property was likely obtained from the estate of rancher Tom Ellis, who in the late 1800s owned much of the land in the area.

“I believe it was for a nominal fee, and that was one of the provisions in there. For what reason, I don’t know, obviously it was more than 100 years ago.”

While the current uses could be defined as public use or benefit, Jakubeit admitted it would be a stretch to include a hotel under that definition.

“It was a little thin to say a hotel is public use. Elements of it is, but not enough to really pass the muster,” he said.

There is an out included in the indenture, requiring “the assent of majority of the city’s duly qualified electors expressed in the same manner as at a vote for elections of members to a municipal council.”

In other words, a referendum for the community to decide on whether the new use is acceptable. The City of Penticton passed this new information on to prospective developers on July 15, in a fifth addendum to the request for expressions of interest.

The fourth addendum, issued on July 2, warned developers new information was coming and pushed the closing date to July 23 in order to give the city more time to investigate — the third time the deadline had been extended from its original June 15 closing date.

“We wanted to make sure. We sent someone to Kamloops and they manually went through all the records to find it,” said Jakubeit. “It was a little slow to get this information because we then went through all our records to see if there was ever a referendum in the last 100 years.”

Jakubeit said the city has also thoroughly investigated the Skaha Lake park properties being leased to Trio Marine for their waterslide development and found no similar restrictions.

“We have and there is no conflict. That was never a condition of us acquiring it (the park properties).”

Colleen Pennington, the city’s economic development officer, said she doesn’t expect the new information to reduce interest in the idea.

“I fully expect, given where we are in the process, that we will get a lot of responses still on the EOI, which is what indications were that we were going to get,” she said. “We are very hopeful people will  go forward at least with the EOI, because it is not binding on either party. Then the challenge for the city and council is to decide what the next steps are.”

Jakubeit said he is confident of a yes vote in a referendum. He thinks much of the opposition to the hotel idea stems from not having a detailed idea of what the development would look like or could do for the city.

“It depends on what the strength of the submissions are how it will be received in the community. Once we have that, we will decide if we want to move forward or if it is dead in the water,” said Jakubeit, noting that the cost of a referendum is about $30,000.

“That is just for the logistics and mechanics, not to educate the people on what the referendum question is and the pros and cons,” he said. “Some of the negativity is coming from the industry itself, circling the wagons, saying we don’t want competition.”

Jakubeit said the city needs more accommodation, though reports show only a 52.5 per cent occupancy rate.

“We want to expand our tourism, because that is our foot in the door for economic development. We don’t have a five-star product and a lot of our inventory, some would argue, is dated,” said Jakubeit. “There is a segment of our hotel population that needs to be modernized. I think having competition come in raises the bar.”