Allison speaks out on TNI development derailing

Editor’s Note: A fair bit of information has appeared in Okanagan media in the past few weeks about problems related to the proposed TNI development in downtown Peachland. Property owner Steve Allison has been cautious regarding what he told media in case the project got back on track. In an exclusive interview this week, Allison told PeachlandNews.com why he would not allow fourth and final reading of a zoning bylaw amendment to be held and why the downtown revitalization project is in jeopardy.

Plans for the first downtown revitalization development are dead in the water after a disagreement between the developer and the District of Peachland put the brakes on the project.

by Dave Preston

The agenda was out and the plan was clear. Tuesday night, Peachland council was to consider fourth reading of a zoning bylaw amendment that would allow for the construction of the first major development in the downtown core in more than a decade.

It didn’t happen. The three-storey, mixed used “TNI” development is stalled. Whether it ever sees the light of day again remains to be seen.

Problems between the District of Peachland and property owner Steve Allison have been brewing for several months. They culminated in the decision Tuesday by Allison to have fourth reading pulled from the council agenda.

While Mayor Keith Fielding has characterized the situation as a developer wanting to rewrite the rules for himself, Allison has a different take on why his proposal has gone off the rails.

Allison said there are two main reasons why his project has stalled. The first is what Allison called “a unilateral decision” by Fielding to add a new step in the development process without any consultation. The second is a requirement by the district that Allison pay into an amenity contribution fund.

At the end of February, 2012, Allison had another meeting with the district about his idea of tearing down the Edgewater Hotel and Aegean Grill buildings in order to build a three-storey, mixed used building. Allison said, at the time, he asked for the process to be expedited so that final approval was in place by the end of June. He said he was told that a four to six month approval process was reasonable.

The process involved holding a public open house on the proposal, followed by first and second readings of a zoning bylaw amendment. That would be followed by a public hearing, then Ministry of Transportation and Infrastructure (MOTI) approval, then finally fourth reading.

After rezoning, the project would go to development permit and building permit stage. Along the way, the project would have to be looked at by the Advisory Planning Committee, which would review form and character of the building.

Allison’s timeline allowed for the district’s approval process and then paying out some $200,000 to have detailed drawings of the building completed and working with a bank to secure financing. This fall, the Edgewater and Aegean Grill would be demolished and construction would begin.

That is not what happened, according to Allison.

On June 26, council gave third reading to the zoning bylaw amendment. On July 6, MOTI approved the project. With assurances that things rarely change between third and fourth reading, Allison paid his builder $15,000 to start detailed drawings.

At a special council meeting on July 4, Fielding announced that another step would be thrown into the development process.

Fielding set up what he called a Peer Review Panel that would seek input from Allison and the public, review it all and determine if the project met with the spirit of Peachland’s numerous planning documents, including the Sustainable Downtown Peachland (otherwise known as charette) report.

“The mayor did not call me and ask what the impact of the Peer Review Panel would be,” said Allison, who characterized the decision to hold the panel as “unilateral.”

With a new twist thrown in, Allison said he called his builder and put a stop to detailed drawings.

In the mean time, the validity of the project was being called into question by the Peachland Residents Association (PRA). Allison said some members of that group were “rude and obnoxious” at an Advisory Planning Committee meeting, where some members of the committee were called “arrogant.”

Some PRA members approached the mayor and apparently told him that their views were not being heard. Shortly after Fielding formed the extra development step called the Peer Review Panel.

Several PRA members have complained through the media that the panel was unfair, since Allison was allowed to present his case to the panel while residents had to make do with sending in written submissions.

All, however, is not as it seems. Allison said at first he did not want to appear before the panel because he didn’t agree with it being set up. Eventually, he begrudgingly agreed to appear. Then he was told by town staff, through his lawyer, that he should not attend the Peer Review Panel.

“I did not appear before the PRP,” said Allison.

The district has not released the names of the members of the three-person review panel. Although Fielding stated the results of the panel would be available mid-August, the district has not released any information generated by the taxpayer funded panel.

The Advisory Planning Committee, for its part, recommended the project should proceed as planned, according to Allison.

Beyond the PRP and Allison’s disagreement with the need for the never before seen step in the development process, is the town’s new amenity contribution policy.

Approved in 2011, the policy requires major developers to kick in cash on top of development cost charges and other fees in order to pay for future amenities, such as a fire hall or recreation facilities. The policy came out of successful negotiations between the district and the massive Ponderosa development, which resulted in an agreement where the developer of that project would contribute funds to future amenities.

Allison said he was under the impression, throughout his proposal’s process, that the District of Peachland really wanted downtown revitalization to succeed and that the amenity contribution policy would be looked at on a case by case basis.

The very first recommendation of the charette report, Allison noted, states, “Explore fiscal options to support downtown revitalization. New development in downtown Peachland will provide benefits to the entire community. Explore innovative fiscal opportunities to support this development.”

Other Okanagan municipalities are looking at a wide range of incentives to entice developers to build in downtown cores, according to Allison.

All along, Allison said he believed that his downtown project would not be subject to the amenity contribution policy. He added that he and his builder only figured out this summer that the district was proceeding with the assumption that Allison would pay an amenity contribution.

“I was told I didn’t have to pay,” explained Allison.

Almost two weeks before first and second reading of the zoning bylaw amendment, Allison said he and his builder received an email from Peachland’s planning department. Attached to that email was a Request for Decision document dated April 14, 2012 from the planning department to council.

The document gives an overview of what Allison’s proposal would entail and speaks specifically to the amenity contribution policy. Section 8(b) of the document states in part:

“Amenity Contributions are not recommended for this project because:

• tax exemption for revitalization is being utilized,
• downtown revitalization is exempted in some other centres from Amenity Contributions.”

It was after third reading of the zoning bylaw amendment that Allison and his builder figured out that a $13,295 amenity contribution charge was built into the amendment. If fourth reading went ahead as planned, Allison would basically be agreeing to pay the fee.

Allison said the mayor has stated that the town needs amenity contributions. From his standpoint, Allison said, “You can’t charge what you need. You charge what the market will bear.”

Although it may be true that Ponderosa agreed to cough up around $600,000 for future amenities, Allison said by his estimated he likely paid over 100 times the amount (on a per square foot/metre basis) for his property downtown than Ponderosa paid for its property.

Allison has heard that the amenity contribution fee is only $13,000 and he should pay the amount, but there are several reasons why he said he won’t.

Even though his development would be subject to a new tax exemption that council is working on to lessen the impact of increased taxes on downtown developments, Allison said over a 20 year period the town stands to gain almost $2.5 million in additional tax revenue if his project is built.

Allison said he told the mayor, “If it’s only $13,000, why are you walking away from $2.5 million?”

The district has been trying to get Allison to pay the amenity contribution fee but Allison said he never agreed to pay it.

He noted that about five years ago, developer Renascence tried to put together a project for the downtown core but failed and that company was trying without having to pay an amenity contribution.

In addition, paying the $13,000 fee would set a precedent for future downtown projects that Allison said he doesn’t want to be a part of.

The charette report calls for a large building between Second and Third Streets and up against the highway that would have two stories of parking wrapped by retail shops and two residential towers that could be six stories in height. Allison said, using the town’s own amenity contribution formula, whoever builds that structure will be faced with a $440,000 amenity contribution fee, according to his estimates.

“It sends a negative message to the development community,” said Allison.

Allison said he finds it somewhat hypocritical that the major added an extra step in the development process to ensure the charette report was being followed while ignoring the first recommendation of the report, which states the district should be looking at fiscal options to support downtown revitalization.

Over the past month or so there has been a lot of back and forth between Allison and town staff. Allison said he was told by planning staff that the April document that showed staff felt the project should not be subject to an amenity contribution was a draft and that it was updated.

Allison claims he was never notified of the town’s change of heart on the amenity contribution fee and that his lawyer asked the city several times for any proof that they had in fact notified him or his builder of their change of intentions. The town did not come up with any instance where the property owner was told the amenity contribution was in play.

Planning staff told Allison that they did change their mind about the amenity contribution and hard copies of the change were available online and at the district office, according to Allison.

“No such change in the amenity contribution policy was sent to me,” said Allison. “I feel it was improper at best.”

Last Thursday Allison met with the mayor and Fielding, “seemed unaware that this all occurred,” according to Allison.

“I was a little perturbed that the mayor said in the media that I was trying to write my own rules,” said Allison, who offered to the mayor to pay for a lie detector test for himself, his builder and town staff over whether anyone told the development parties of the change in the amenity contribution policy.

Later in the day Thursday, Mayor Fielding sent an email to Allison apologizing for the district’s failure in communicating about the amenity contribution policy.

“I am strongly opposed to the amenity contribution policy,” said Allison. “If they had told me in May, I would have said no.”

Currently Allison’s proposal sits at third reading of the zoning bylaw amendment. The district wants Allison to pay the amenity contribution fee. Allison refuses.

“I still want to do the project,” said Allison. He added it is too late now to complete the process and start construction this year.

After losing out on $50,000 rent for the Aegean Grill building, which could have been leased out last spring but wasn’t pending development approval from the town, Allison said he has signed a lease until the end of next August for the Edgewater Hotel.

In the mean time, municipal officials from other jurisdictions in the Okanagan have looked at the problems Allison has faced and seen an opportunity.

Shortly after last Thursday’s meeting between Allison and Mayor Fielding, a city councillor from Kelowna met with Allison to talk about opportunities for moving TNI’s operations, including its 85 employees, to that city, according to Allison.

Last year, the mayor of Summerland was in touch with Allison about a tour of that town’s downtown and Allison said he had meetings with municipal officials from the District of West Kelowna and Penticton.