City to lose $1.5M on development

by Jennifer Zielinski -Castanet Nov 8, 2011 / 2:14 pm

The Okanagan Hockey School is getting closer to having dorms near its training facility.  At Penticton City Council Monday night, Mayor Dan Ashton says there was some good feedback from the public hearing.  "There was a push for the zoning bylaw for those particular addresses. That made it to second and third reading and will be held at this point in time depending on what transpires with the sale of the property," says Ashton. Council recently voted to sell nine residential lots on Eckhardt Avenue immediately west of Alberni Street for $925,000.  The plans are for a seven-storey building, featuring some commercial units on the ground floor, with dormitory units and other living facilities on the upper floors, to be leased to the hockey school.  The city paid $2.3 million for the properties.  Penticton City Councillor John Vassilaki says although the property has been assessed at fair market value he believes the estimate is half a million dollars too low. " Some of the people who live right next door to the property are concerned that because the city is selling those properties so low that the value of their properties will drop." During Monday night's council meeting, Vassilaki was the only one to vote against the sale of the land.  According to Vassilaki the developer of the property will be getting other deals, on top of the sale. "The building that will be put up, will receive five years of free taxes, along with 50 per-cent of the Development Cost Charge and 50 per-cent of the building permits will go to them."  Vassilaki believes the developer will be getting a benefit of one million dollars from the sale of this land.  The city bought the property three years ago when the event centre was being built, as a way to widen the revenue for the centre, not as an investment for the city, says Vassilaki.  "I am dead set against selling city land unless it is for agriculture."  However, Vassilaki has no problem with the project that will take place on the land as he acknowledged that the Hockey School is one of the largest generator of revenues for the community.  "I am for the project it will do a great thing for the hockey school and for the college, because if there are rooms left over some college students will be able to rent them."  Vassilaki is concerned that the land sold for the school, will be land the city will need in the future.  " If we go to try and purchase that land in five years from now we will pay millions of dollars to get a hold of that kind of land, at that location which is close to all our facilites."  Castanet has learned, through B.C. assessment, vacant lots in the same area of Eckhardt Ave. are assessed at $293,000. If nine of these lots were sold for the B.C. assessment's value the total sale would be $2.6 million.  Mayor Ashton says the consideration of the sale will be brought up at the next Council meeting November 21.