Condo project in trouble

By Wolf Depner - Penticton Western News Published: June 04,

A major local residential development known as Alysen Place has gone into receivership. News of the receivership started to emerge Monday and received additional confirmation yesterday through city officials and documents. Developer Jake Bergen of the Pilot Pacific Group refused to discuss the state of the project without denying that it had gone into receivership and promised to issue a statement within two weeks. This development appears to cast a major shadow of uncertainty over the project once hailed as a flagship development for the southern end of Penticton and follows the demise of the Skaha Beach Club and Spa project proposed by developer Mel Reeves. Rising construction costs and financing issues forced Reeves to cancel his ambitious project some 13 months ago and Alysen Place now appears to be the most recent victim of a slumping economy that has depressed demand for up-scale real estate.

Bergen had first proposed his three-tower project more than three years ago as part of a broader scramble for development opportunities in the south end of Penticton near Skaha Lake. Developers had identified the area as an attractive and affordable alternative to the northern end of Penticton, where development opportunities along Okanagan Lake have dried up. That push to develop the southern end of Penticton also included Reeves’ project to be located near Alysen Place. But if Bergen and Reeves pursued comparable ambitions in the same neighbourhood, Bergen appeared to be more successful than Reeves because Bergen actually started construction last year. Bergen also differed from Reeves by staying out of the public limelight for the most part by avoiding controversies. While Bergen angered some residents through frequent design revisions, he never generated the same kind of resentments among certain segments of the public as Reeves, whose initial plans called for a private cabana on a Skaha Lake beach front lot zoned for future park zone. Reeves also ruffled feathers when he was trying to build a private home near a sensitive riparian area on Sickle Point just south of Penticton.Yet it now appears that Reeves and Bergen have suffered a comparable fate.

The public started to become aware of this news Monday when council discussed potential remedies for unfinished building projects. An attached report outlining options for council claimed that Alysen Place has been within the care of a receiver, a fact later verbally confirmed by planning manager Gary Leobold. “Yes, that is true,” he said. He said that the city started dealing with the receiver about two months ago when it got a letter informing the city about the state of the Alysen Place project. He refused to discuss specific details that led to the receivership. It is complicated by the fact that the first phase is nearing completion. Contractors have also laid the groundwork for the second phase. Leobold said the city is currently working with the receiver to get the first phase ready for final occupancy and holds out hope that the rest of the site would eventually be developed.Yet Alysen Place is not the only development facing an uncertain future. Local developer John Lansley recently informed that city that he has suspended work on a Marina Way project.

City staff are currently reviewing the financial impact of these recent developments on city budgets in terms of lost revenues such as taxes and development cost charges.Mayor Dan Ashton acknowledged that the city would have liked these projects to go ahead, but tried to sound optimistic. “We don’t expect Penticton to contract. We expect Penticton to grow at a reasonable rate,” he said. Yes, some proposed developments have not gone ahead, said Ashton. But does this not mean that the city does not remain an attractive place to live and do business, he said, pointing to a host of new developments on the northern and southern end of Penticton such as 100 Lakeshore Drive and the Waterford respectively.“There have been a lot of developments that have succeeded,” he said. As for the lost building revenues, Ashton said the city will remain financially responsible. “Council is doing the best to be pro-active, not just reactive.”