Penticton retirement homes cry foul over tax incentive

Penticton council supports $500,000 tax break for proposed retirement resort

Retirement resorts are on their way to being a permanent part of Penticton’s economic investment zone bylaw, but the amendment is not travelling an easy path.

The focus of the debate is Southwood Retirement Resort, a proposed project for the area now occupied by Waterworld RV park off Yorkton. The developer, Eric Hall of Regency Resorts, requested his project be included under the bylaw, which would trigger a $500,000 tax incentive.

Earlier this month, Penticton city council voted to support his development permit application. At Monday’s meeting, council gave three readings to an amendment making retirement resorts a permanent part of the bylaw.

Coun. John Vassilaki, who spoke out against the exemption when it was brought up for council’s consideration earlier this month, remained firmly set against it.

“I believe we are getting away from the original spirit of the bylaw,” said Vassilaki, who felt the bylaw was intended to support commercial and industrial enterprises. “Now we are starting to allow for a certain type of residential that I don’t think fits.”

Vassilaki said there are already many retirement facilities in Penticton and disagreed with calling the Southwood development a resort.

“We’ve got at least 12 other such buildings in Penticton. The only thing they are lacking is the word resort at the end of their name. Instead, they call them retirement homes. To me, a resort is you are on the lake somewhere, you can bring your boat, you buy a condo in there and you go out and enjoy yourself on the resort,” said Vassilaki. “You can dress it up and call it anything you want, it’s a retirement home.”

Couns. Gary Litke and Helen Konanz represented the opposite point of view. Southwood, they said, was not a residential neighbourhood, but a business and a great opportunity for Penticton.

“This is a type of facility that is not available in our community,” said Konanz. Putting retirement resorts in as a permanent amendment to the economic zone bylaw, she said, would invite others to build similar projects here. “This could be a new industry that we can capitalize on.”

The proposed amendment to the bylaw defines the term retirement resort as “a facility intended for long-term seniors rental housing with a high degree of amenity and a resort-like atmosphere,” and “having at least 25 per cent amenity space.”

Regardless of the amount of space given to amenities, Ron Rose, developer and owner of The Concorde Retirement Home, said that Southwood’s mandate will change to match his.

“People age, and when they age, they need care, said Rose. “They don’t stay as a resort, they become care facilities.”

Rose said the tax incentive, which amounts to $500,000 over a five-year period, is excessive. Arguing that council should consider capping the incentive at a lower level, Rose has little doubt that Regency Resorts would build the Southwood Project regardless.

“They have already determined this is what they want and this is where they are going to do it,” said Rose. “I could have put resort at the end of mine and put a pool in. The reason there is no pool is because they (senior residents) don’t use it. It was never worth it for us to put it in the first place, but had I been able to save $500,000 in tax incentives, that’s a whole different game. I can put a $50,000 pool in.”

Leo Mead, owner of Athens Creek retirement lodge, agrees with Rose’s projection.

“If this project is worthwhile doing, they will do it without the incentive,” said Mead, who explained there is currently a vacancy problem for the retirement industry in the Interior. “If this facility goes ahead and gets a tax break, it is making a very unlevel playing field. You are interfering with the marketplace with taxpayer dollars.”

Mayor Dan Ashton explained that the ultimate purpose of the tax incentives triggered by the economic investment zone bylaw was to create more economic activity locally.

“There is an incentive to get people to work in Penticton. It’s an incentive to have an additional 50 people on a payroll, earning a living here in Penticton,” he said.

Litke said it was a big opportunity for the city. “We have a lot of vacant property in Penticton. We don’t have a lot of interest form the development community because of the economic situation,” he said. “Here is a developer who is willing to come to Penticton, invest a significant amount of money, create jobs, create a facility that we do not have.”

The amendment is expected to come before council Aug. 3 for final reading and adoption.