Spec tax delays new hotel

Photo: Westcorp

Uncertainty over just who will be affected by the government's proposed speculation tax, and how they will be impacted, has caused a delay in the sale and construction of Kelowna's $230-million waterfront hotel.

Edmonton-based Westcorp had planned to go to market this summer to sell 44 condo units in the 33-storey hotel on the former Willow Inn site across from Kerry Park.

Based on the success of that sales cycle, construction could have begun in late fall of this year.

Gail Temple, Westcorp vice president of operations, says the speculation tax has put the project in danger.

"That is because we had intended to go to market with those residences this summer. Now, based on the feedback from potential buyers, we know that we cannot go to market this summer because we don't determine this, it's our buyers," said Temple.

"The success of this hotel project being built is entirely dependent on the sale of the real estate."

Temple made the comments after she sent a letter to Premier John Horgan and other ministers within the provincial government sharing her concerns.

While uncertainty in the marketplace has put the brakes on sales, Temple said it hasn't stopped Westcorp from continuing the planning work.

"We are continuing on with working drawings and all of the design work required to get us to building permit. We are not stopping that work.

"It is our intention to build this project. We need our buyers who are now an integral part of this, to move forward as well."

Regardless of what the government decides around the speculation tax in the fall, Temple said they will attempt to sell the condos next year.

"We will be testing our market and finding out. Our hope is that certainty will be a big help. Is it our greatest hope that this tax goes away and it will not be punitive to those Albertan buyers etc., of course we are."

Delays have plagued the luxury hotel and convention centre. Construction was originally scheduled to begin in the spring of 2016.