Council is finally getting around to deciding how to deal with nine city-owned properties along Eckhardt Avenue that are currently bearing about $1.6 million in liens from contractors working on the failed hockey dorm project.
“I am hoping by the end of the day council will instruct staff to move forward with a resolution on that issue,” said former acting mayor Garry Litke on Monday morning. In addition to the liens, the contractors launched legal action earlier this year.
Litke, who resigned Monday, said council would be trying to decide whether to settle out of court or let the issue proceed.
“My agenda would be to resolve that, give staff some instructions today and get that resolved over the summer so that by the fall we could start entertaining some of the proposals I have been hearing about,” said Litke.
While he was still mayor, Penticton MLA Dan Ashton maintained the city is not liable for the contractors’ claims.
“I am very comfortable with the city’s legal position on the properties and, as I have said all the way along, they are going after the wrong person,” said Ashton. A freedom of information request made earlier this year revealed that legal bills related to the properties had reached more than $50,088 by Jan. 31 and that the city had spent $37,016 on removing the contractors’ work and restoring the property.
The lands have been in limbo since early 2012, when the project came to a crashing end, as financial backers pulled out and news broke about allegations of fraudulent business practices on the part of developer Loren Reagan.
In February 2013, the contractors moved their case ahead, filing notices of civil claim that named the City of Penticton, along with Reagan and his partners, Mike and Tana Elphicke, the principals of Okanagan Elite Hockey Group, as defendants. Five separate claims were filed by Grizzly Excavating, Avkon Construction, Geopac Inc., R&R Reinforcing and Task Construction Management.
“Given the information we had at the time and the motivation to move forward with something on that land and the recommendations we had from various sources, that’s the decision we made. Obviously not the right decision, we’re paying for that now,” said Litke. “From my perspective, I just want to see it get resolved. We have quite a bit of interest in that property, but obviously as long as there are matters before the courts, people don’t want to get involved in that.”