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Real Estate

Fiery real estate talk in Peachland

 
Fiery real estate talk in Peachland will lead to more expensive housing.
 
I am not talking about the disaster this weekend, but an economic disaster for Peachland as they chase away another developer.
 
The story broke last week that TNI developer, Steve Allison has had enough of trying to develop a new waterfront project in Peachland that would benefit the town from a commercial tax base and housing point of view.
 
Peachland is well known in development circles for being one of the most challenging communities in Western Canada to deal with, hence the many For Sale signs on Highway 97 as you drive through the town. Personally, I have experienced the same frustrations Mr. Allison is now enduring with his redevelopment project for what was known as the Edgewater Hotel property.
 
Many developers have come and gone, looking at a land assembly project in that area and presenting proposals for a myriad number of plans, however, Mr. Allison is the first developer I am aware of to actually successfully assemble the various parcels and agreements to allow development and now Peachland’s greed has stalled and possibly prevented another project from proceeding.
 
Peachland is also well known for backing losing horses in it’s time. I recall standing in Graham Reid’s office as he proudly spoke about a plan to crane boats above what would be potentially five lanes of traffic to a dry dock storage on the opposite side of the Highway 97 from the lake. What the developer and city had clearly overlooked was the massive engineering task and subsequent financing required to complete the project, let alone the Ministry of Transportation's agreement to allow boats weighing several tons to pass over five lanes of traffic! Yet, it is their pride and joy project.
 
An issue most recently in what appears to be a last minute $13,000 charge to the developer.  A so called “Community Amenity” contribution. A grab into the pockets of the developer as a municipality likes to think, yet how wrong they are. On the one hand they complain about the price of housing and on the other hand they charge the developer for something completely unrelated to the development. 
 
There are two flaws in Peachland’s thinking that will continue to drive development away from the community, development that would otherwise provide jobs, add to the commercial tax base, diversify the community and provide housing. The challenge for Peachland is the natural attraction to “billion dollar” projects and the expense of smaller, ready to go, more easily financed projects such as Mr. Allison's.
 
The first flaw is they believe the developer has deep pockets and can afford anything they throw at them. The myth is that the developer makes so much money that a $13,000 last minute request/bribe, will simply slide into the agreement. The truth is quite the opposite. A developer's world is extremely high risk and more so in this economy. For them to finance a project often involves complex relationships with friends, business associates and other corporations prior to seeing any “traditional financing” and the initial money is finite. The myth that developers will simply pay what they are asked, is to suggest that there is no downstream cost to the citizens of Peachland, yet they are the only people who pay for these charges. 
 
Sometimes, the same citizens who lobby to charge the wealthy developer forget that the developer simply adds the charge on to the price of their inventory for sale and the citizens’ children pay the increased tab. The local folks then sit around and talk about the lack of affordability in their community and how affordable housing needs to be dealt with by the town. They then approach the developer to see if the developer has any ideas - how ironic!
 
The other myth is that the rules can be made up as discussions proceed. This is the largest flaw in municipal planning and as we see from Mr. Allison’s reaction in the media, he and other developers have had enough.
 
I have long been a fan of “prescriptive planning” since I served a term on municipal council and prior to that worked on many municipal committees and boards. Prescriptive planning sets out a higher level of control than a municipality may have today but takes away the ability for the unknown surprises at the end. It lessens the ability for a council or administration to have discretionary policies.
 
Discretionary planning leads to accidents and mistakes that in the long run are ill thought out and to be honest, often ugly. A developer is allowed to build a building that does not meet architectural guidelines perhaps because he provided some benefit to the town in another manner. That is the problem overall with Peachland both administratively and politically, nobody knows where the goal posts are, least of all Peachland themselves. 
 
It is time Peachland produced a plan that does not require further task forces, peer review committees or public hearings; a plan that sets out what can be built where with somewhat onerous guidelines if need be, but guidelines that allow a developer to plan, budget and have some certainty that if they meet a stringent set of guidelines they can build their project. Until that point in time, Peachland and municipalities with a similar approach will struggle to attract development companies to provide future opportunities for the citizens of the town.


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About the author...

For the past twenty years Mark has been involved in real estate development and consulting and is currently a REALTOR with Sage Executive Group in Kelowna.

His column, brings a unique perspective on what may be important to us in the future as we come to grips with fast paced change in a world that few people barely recognize.

His influences come from the various travels he undertakes as an Adventurer, Philanthropist and Keynote Speaker. More information can be found on Mark at his website www.markjenningsbates.com

 




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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.


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