New chapter opening for Penticton’s City Centre building

New ownership plans to transform City Centre building into professional offices

The City Centre building sold this spring for $4.8 million and the new owners envision it becoming a hub for professional services.

The City Centre building sold this spring for $4.8 million and the new owners envision it becoming a hub for professional services.

One of downtown Penticton’s most iconic buildings is set for a major transformation its new owners hope will return something that went missing: its identity.

The City Centre building, which began life as a department store almost 60 years ago, was purchased this spring by a group of doctors that plans to restock it with professional offices.

That transition took a major step forward earlier this month when the fitness centre that occupied most of the top floor moved to a new building a few blocks away.

Now that space, plus the former home of Jose’s Pepper Club Cafe below it, will be gutted so they show better when prospective new tenants are given a tour, explained Mike Roney, a real-estate professional who’s also part of the new ownership group.

“In the greater scheme of things, we don’t have a lot of space to offer, but the space that we have is probably the best space in all of Penticton,” he said.

Roney said new tenants — besides the drug store that opened in August — could include accountants, lawyers and medical specialists, and “our expectation is we’ll be 100 per cent leased at this time next year.”

In the past five years, the building has hosted an eclectic mix of residents that included an art gallery, a snowboard shop, an MLA’s office and a physiotherapy clinic, plus the restaurant and gym.

“When the downturn in the economy happened in the 1990s and the early 2000s, the building suffered, (and) the marketing efforts for leasing it up were never really focused on trying to create an identity for the building,” Roney said.

“So the tenant mix, because of the economy and because of the competition that was out there for office space and retail space, put the landlord in a position where they probably did some deals that they didn’t necessarily want to do.”

The former owner was Kenyon and Co., from which Roney said his group purchased City Centre this spring for $5.8 million. Kenyon and Co. didn’t return a call for comment.

Property records show the building and land sold for $4.8 million, and Roney said the extra $1 million was paid for the parking lot behind it. Records also show the land under the building has decreased in assessed value, from just over $1 million in 2010 to $778,000 in 2012.

Roney declined to provide lease rates for the building, but said prices will be “reflective of the Penticton market.” He noted too that some of the profits will be invested through a charity to fund the operation of a medical building in Kenya.

Kirby Layng, who manages City Centre Fitness, said lease rates weren’t a deciding factor in the decision to move the gym to its new home on the 200 block of Martin Street.

“Overall, this location, being on the ground floor, is going to be a lot better,” Layng said.

Barb Haynes, executive director of the Downtown Penticton Association, also thinks the move will be for the better, because the repurposed City Centre should attract more day-trippers to the neighbourhood.

“That will create people making appointments, people looking to come into the downtown and …  spinoff benefits to the rest of the retail community and restaurant community,” Haynes said.

She applauded the switch to professional services, rather than retail or a new restaurant on the upper floors, which don’t get much walk-by traffic. But it was retail that gave the building life.

According to records held by the Penticton Museum and Archives, the first tenant, a Bay store, had its grand opening on Sept. 2, 1954. Business boomed, and only six years later the third floor was added.

The Bay later pulled up stakes for Cherry Lane shopping centre, and City Centre became home to Zellers in 1985. By 1996, the discount retailer was gone, clearing the way for the overhaul that led to the recent mix of shops and services.

Roney said the new owners are “waffling” on a name change, but it looks as though the giant, green sculpture of a female figure that dominates the three-storey atrium is on her way out.

“Long-term,” he said with a laugh, “we will probably donate that somewhere.”