Penticton pays a price for failed property deal

Taxpayers now on the hook for cleaning up the mess created when council tried to rush through a land deal

It shouldn’t come as a surprise to anyone that the City of Penticton failed to find a buyer for the nine-city owned lots on Eckhardt Avenue. In fact, the RFP attempt to find a buyer for the project could be looked at as just another poor decision in a long list of them related to the properties.

The lots, which were originally purchased by the city to facilitate the building of the South Okanagan Events Centre, do come with some serious baggage. And we’re not talking about the kind of baggage that surrounds the Frank sculpture, which now resides at Red Rooster Winery.

No, these lots are carrying an even heavier load in the form of some $1.6 million in liens placed on the properties by contractors that got burnt when a dormitory project, started last November, fell apart. As it turned out, the developer, who was later accused of fraud in other business dealings, didn’t have the ability to purchase the property, let alone pay the contractors that had been allowed to start work on the site in advance of the city receiving payment or even issuing an official building permit.

Thanks to these decisions, Penticton taxpayers now have a white elephant on their hands. The likelihood of finding a purchaser willing to take on the liens and still pay a decent price for the property is probably next to nil.

Streamlining processes and redefining priorities are certainly actions that the city should constantly be undertaking to create the best business climate possible. But no machine functions properly without friction and, in the case of the dormitory project, it is hard to understand how the process moved so quickly that getting a substantial down payment was passed by so construction could begin.

Saying that others were convinced too isn’t an acceptable excuse. Admitting that the process was flawed, and publicly taking steps to ensure the city is protected when making similar deals, however, would show that the city bureaucracy, both elected and employees, had learned something.

 

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