New casino lease not in the cards for Penticton Lakeside Resort

David Prystay said enough is enough, announcing last week that RPB Hotels is ending its longstanding lease with Lake City Casinos.

General manager David Prystay of the Penticton Lakeside Resort holds a royal flush in the hotel lobby following his recent announcement the facility would not be renewing its contract with Gateway Casinos when the current lease runs out in the spring of 2017. A $2 million rennovation project is planned to add more convention space and additional rooms.

General manager David Prystay of the Penticton Lakeside Resort holds a royal flush in the hotel lobby following his recent announcement the facility would not be renewing its contract with Gateway Casinos when the current lease runs out in the spring of 2017. A $2 million rennovation project is planned to add more convention space and additional rooms.

David Prystay said enough is enough, announcing last week that RPB Hotels is ending its longstanding lease with Lake City Casinos at the Lakeside Resort.

“We decided to take the lead hand and let them know we would not be entertaining any thought of renewing the lease with the casino at this hotel,” said Prystay, the hotel’s general manager. Lake City Casino has been located at the resort since May 2000.

“They were aggressively looking for a new place to move to,” he continued. “They haven’t said they are leaving, but if they are pursuing someplace else to move to, that means they are leaving, in my terms. Instead of waiting for them to tell us what to do, we are going to tell them what to do.”

Prystay plans to convert the space currently occupied by the Lake City Casino and covert it into a state of the art convention centre. He also plans to renovate the resort’s existing catering facilities and add a minimum of 64 rooms, while renovating the existing 203 rooms.

“It will give us the largest private convention facilities in the interior of B.C.,” said Prystay. “We told them (Lake City Casino) we have no intention of renewing the lease beyond May 15, 2017. There is no wriggle room.

“I decided that we may as well move forward and take care of our own employees and ensure we have a good future in Penticton, not wait for them for to make their move, which leaves us in the lurch.”

Tanya Gabara, spokesperson for parent company Gateway Casinos, said they tried to work with the Lakeside Resort and had presented expansion concepts that would include live entertainment and an expanded food and beverage service.

“There wasn’t any interest to explore these options or make them work,” said Gabara. “We are not content to just stay and offer what we know our customers are less satisfied with. They want these other amenities to be part of the experience, so we began explorations elsewhere in Penticton.”

The vision, according to Gabara, is to create a full-service entertainment destination with gaming, rather than a purely gaming house.  Gateway has been investigating several possibilities for a new location, though Gabara declined to give specifics.

“We continue to explore a lot of those options and once we have walked through the regulatory and due diligence, we will have an announcement on what the plan is,” she said, adding that moving the casino to Penticton Indian Band land is a possibility.

“That is always an option. We have looked at many locations,” she said. “We are committed to doing business in Penticton and remaining a community partner. It is very important to us.”

Moving to the PIB would come at a loss to the City of Penticton, which receives a percentage of the casino profits as a host city.

“It’s been averaging the last few years around $1.6 million,” said Mayor Andrew Jakubeit. Along with that, he continued, there are jobs and tax revenue, plus the amount the casino spends as one of the city’s larger electrical utility customers.

“We are working really hard to keep them in town. Hopefully we will be able to come to providing more specifics shortly, but my key focus is ensuring the jobs and revenue — particularly the revenue — and taxes stay within the City of Penticton,” said Jakubeit.

Jakubeit said that to his knowledge, the property recently purchased by the city adjacent to the South Okanagan Events Centre has not been discussed with Gateway Casinos. Gabara was also unable to say if the newly-purchased land had been discussed.

“We have no knowledge of what the city is going to do with that property. I am not part of the development team, so I would have no idea if they had even explored that location,” she said.

Jakubeit also said he isn’t concerned that the Lakeside Resort will be competing with the Trade and Convention facility, which is owned by the city.

“They have already been in competition anyways. We will be working on plans to coexist and leverage as much as we can out of each opportunity,” said Jakubeit. “If we get more conferences in here, all the better.”

The Lakeside reinvesting in their property is fantastic news for the city, according to Jakubeit.

“That is a really large initiative that they are going to be putting forward and we hope it will spur some of the other (hotel and motel) properties to modernize or reinvest into their offerings,” said Jakubeit. “It has been one of the drums we have been beating, about a need to be addressed. Good on David for championing this and being the industry leader.”