Downtown Kelowna hotel development 'remains unfeasible'

Hotel faces more delays

Yet another setback for Westcorp, the company hoping to construct a 33-storey hotel and condominium complex on the site of the former Willow Inn Hotel near Kelowna's downtown waterfront.

After several delays due to flooding, introduction of the speculation tax and COVID-19, Westcorp appeared before council on Sept. 20, 2022 seeking a fourth development permit for the site at the corner of Mill Street and Queensway.

The permit was granted, however, because a new zoning bylaw was to be adopted in the coming weeks, the permit was valid for just one year as opposed to the customary two.

That means a building permit must be granted or the development permit would expire. That deadline is this week and the building permit has yet to be issued.

Westcorp vice-president of operations Gail Temple confirmed to Castanet Tuesday they are not prepared to go ahead with the project at this time.

"We are continuing to explore all options, but with no easing in construction pricing and interest rates, the hotel project remains unfeasible," Temple said.

"Our development permit will expire and any upcoming forward movement with the project will require the consent of Kelowna city council.

"We will announce any news on this front as it unfolds. We appreciate the continued interest from our community."

The latest iteration of the hotel includes 17 storeys of hotel space, a restaurant on the 18th floor and for-sale condos encompassing the remainder of the tower.

The as yet unnamed hotel has been fraught with delay after delay since the project first came to light in February 2014.

The initial plan was for a 24-storey boutique hotel. Some site work did take place in the summer of 2015, but a planned March 2016 construction start was delayed because some elements of the design had not been finalized.

In November of that year, Westcorp announced a further one-year delay to give it time to explore design revisions.

A new design was unveiled in August 2017, featuring a 33-storey structure with 174 hotel rooms, 49 for-sale condos and a 17th floor restaurant. Council approved a development permit despite objections from city staff.

Construction was again paused when the province introduced the speculation tax again prompting a redesign and a new development permit in August of 2018.

More alterations were made in late 2019 in advance of the anticipated opening of a show suite and unveiling of the name in March of 2020, but COVID-19 shut down the world a week prior, scuttling those plans.

A new development permit was again approved in September of last year, which is now about to lapse.

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