Penticton

The plans to build the new dormitory for the Okanagan Hockey School have been put on hold, at least for now, after the initial funding put in place by the developer dried up.

"Unfortunately, last (Thursday) night was the closing date for the sale of the property from the city to a developer," says Penticton Mayor Dan Ashton.

File photo

Penticton Mayor Dan Ashton

Last November, Penticton Council voted to sell nine residential lots covering 1.3 acres for $925,000.

"The developer had put down a non-refundable deposit, which the city has. However, there are some costs now associated where the developer had engaged companies to start the work."

Penticton taxpayers are not liable for those costs, as Ashton says the city took measures to ensure they were protected.

As well, Ashton believes the project is not only still viable, but also well worth it.

"Many people think that, and we're hoping that this short term financial glitch will come to resolution very quickly."

Penticton Council held an in-camera luncheon meeting of Friday to further discuss the issue of the failed sale.

Ashton met Thursday with Alex Fraser of Calgary based Citation Ventures, and is optimistic the deal can be pulled back together.

Fraser's company was contacted in late November when the initial lender back out.

"He was in Penticton for a second trip regarding this property and it's my understanding that they are coming back next Wednesday. I'm hoping this will clear up and we'll go from there, but at this point in time there are no offers on the property."

One issue still to be addressed is the outstanding balance owed to some of the trades who began work on the property late last year.

With a projected opening date of September 2012, the city took the step of allowing the project to begin shortly after the original deal was announced. Crews began to do the ground work, as well as the footing and forming work, but with no concrete poured.  Work has since ground to halt.

"I'm hoping that the developer will come up with the required funds, not only for the purchase of the property, but to look after the trades to this point in time and to have enough money to build the dormitories as projected originally."

Back in November, Council voted to sell the nine residential lots on Eckhardt Avenue west of Alberni Street for 925-thousand dollars.

The plans called for a seven-storey building, which would include a dorm unit with living facilities and some commercial units which the Okanagan Hockey School would lease.

The city paid 2.3 million dollars for the properties, which have now fallen back into the city's fold. Citation Ventures has set a target date of March 1 for them to put all the financing in place.

"Not only the property funds for the City of Penticton, but the entire building fund," says Ashton.