OSOYOOS TIMES-September 9, 2009
By Paul Everest – Osoyoos Times
At the site where the 171-unit Indigo condominium project was slated to be built at the end of Cottonwood Drive, one can find a for-sale sign next to advertisements for the project.
The 1.2-hectare site went on the market in mid-July and the asking price is $7.5 million.
A representative from the commercial real estate firm trying to sell the property, CB Richard Ellis, said the firm is selling the land on behalf of Quest Capital Corp, a finance company.
Derek Wasson, senior vice president for Quest Capital Corp., said his firm holds the mortgage for the property.
In January, the Town of Osoyoos announced it was returning $1.04 million of the more than $2 million it received in August of 2008 from the Vancouver-based developers behind the project, the Kingsway Group of Companies.
The returned monies included $462,212 meant for a number of building, sewage, landscaping, inspection and damage deposit fees as well as $576,656 that was meant for development cost charges (DCCs).
DCCs help the Town pay for infrastructure upgrades made necessary by any new development.
The money was returned because of legal obligations and to help keep the project viable in the midst of the global economic downturn.
Osoyoos Mayor Stu Wells said $1.3 million in assets related to the Indigo project, including density bonuses and a park, were kept by the Town.
When the Kingsway Group of Companies was given a building permit for the development in August, 2008, the estimated budget for the project was $110 million.
Wasson said there have been discussions between his firm and a number of interested parties about the future of the Indigo property.
“We’ve talked to a tonne of people,” he said.
Requests for comment from the Kingsway Group of Companies from the Osoyoos Times went unreturned.
Meanwhile, the owners of the 28-hectare Willow Beach property at the head of Osoyoos Lake have quashed recent reports that the site is for sale.
Robert Wilson, president of Vancouver-based Georgia Laine Developments Ltd., said on Sept. 9 that the property is not for sale and there are no plans to sell it in the immediate future.
Incorrect information about the status of the Willow Beach property appeared in the print edition of this week’s Osoyoos Times and we apologize for any confusion.
The developers purchased the property from the Quintal family for $23 million in June of 2007 and the developers had planned to build a 1,088-unit resort on the site.
The Willow Beach Resort project went as far as third reading in the Regional District Okanagan-Similkameen (RDOS) Official Community Plan and zoning amendment process.
The project stalled at that stage in August of 2008 while the developers looked for ways to finance the resort in the wake of the global economic downturn.
Wilson signed an agreement with the Town of Osoyoos in April, 2008, where the developers would contribute money to the Northwest Sewage Project if the Town would extend its sewage system to service the resort.
The Town and the developers finalized an agreement earlier this year where the developers pledged $18 million towards the planned sewer project, which would connect roughly 130 properties along the lake’s northwest shore to the Town’s sewage system.
The deal between the Town and the developers, however, hinged upon the sewage project servicing the planned 1,088-unit resort.
In June, when it became clear that the project would not be built to the 1,088-unit scale originally planned, the developers said they would only contribute to the sewer extension if the existing 40 properties on the Willow Beach property would be connected.
The Town and province have been negotiating with the developers to keep them involved with the sewage project on a financial level and provide relief for the northwest shore property owners.
Wilson declined to comment on whether the 1,088-unit resort was still in the cards.
“Not in the near future, that’s for sure,” he said, adding that the resort project is in a holding pattern until “the market turns around.”
RDOS rural Area A Director Mark Pendergraft said in June that if the resort is not built, the sewage project could be scaled down in size to a cost of roughly $7 or $8 million.
With a $4.5-million Municipal Rural Infrastructure Fund grant in place for the project, along with a pledge from the Okanagan Basin Water Board to cover 18 per cent of the costs of the sewer extension, there would still be a shortfall of more than $1 million.
That would break down to between $7,000 and $10,000, depending on the final costs of the project, to be picked up by each property owner in the northwest shore area on top of fees for annual service and hooking up to the sewage system.
Wells said on Sept. 4 that the Town and owners of the Willow Beach property are close to finalizing a deal that will allow for the 40 existing units on the site to be connected to the Town’s sewage system while the property’s owners would contribute money to the sewer project.
Wells said, however, that Quest Capital Corp. is now dealing with the Town on money issues related to the sewage project instead of the developers.
Quest Capital Corp. also holds the mortgage for the Willow Beach property, Wasson said.
Wells would not provide details about the agreement, but said the deal would provide an amicable resolution.
“We’re making sure we get what we need out of it,” Wells said.
Wilson said he had received funding approval from Quest Capital Corp. last week to advance money to the Town for the sewage project, but not disclose any further details about the negotiations between his company and the Town.
The Willow Beach project is not the only development that Georgia Laine Developments Ltd. is having financial difficulties with.
In December, 2008, Wilson applied to the Supreme Court of British Columbia for protection from creditors in relation to a 67-strata-lot condominium development project in Vancouver.
The court issued an order granting the protection and that order has been extended to the end of this month.
According to a report prepared in July by the Vancouver-based Bowra Group, an organization assigned by the court to review all of the developer’s expenditures relating to the project, the development is over budget by more than $564,000.
