Economic Letter

David Bond is a retired bank economist who lives in Kelowna.

Believe it or not, Kelowna city council did the right thing by rejecting a development proposal for a plot of land kitty corner to Kelowna General Hospital at 2169 Pandosy St.

Originally the land involved was zoned RU6 but in 2015, at the request of the owner of the land, was rezoned HD2. HD2 zoning is to develop “buildings that provide services to the medical community associated with the Kelowna General Hospital, Interior Health Authority and UBC Medical Programs.”

This rezoning was granted largely because the developer/owner agreed to construct affordable housing units with a total of 1,400 square feet consisting of three units for short-term rental by out-of-town patients and their families who need to be close to the cancer centre for treatment or tests. This was an obligation covenant granted by the owner to the city in January 2015.

For any piece of zoned property, there exist conditions as to what type of building can be placed on it. As well, there are limits to height, how much of the total land mass can be covered and how much the required setback must be. These conditions are established with consideration as to the surrounding properties, the purpose of the proposed buildings and are not arbitrarily set.

Since the property in question was rezoned at the request of the owner, it would be natural to think that what the owner might propose to build on it would conform quite tightly to the constraints, including building height of 16.5 metres and the site coverage of 55% with a setback of six metres. You might think so, but you would be wrong.

The developer, having achieved the desired rezoning, determined that these constraints unacceptably limited the return on the investment in the land. The actual development proposal called for building heights of 20 metres and total coverage of 62% of the site by an office/commercial building of 35,490 square feet, a hotel of 47,310 square feet plus a roof deck of 2,740 square feet, a six-level parkade of 88,794 square feet, a 6,420 square-foot deck and an atrium of 1920 square feet. These proposed buildings fell far short of the zoning uses requirements.

Moreover, the developer wanted to be excused from providing the three short term low-cost rental suites for patients at KGH. These, after all, were the main reason the rezoning occurred in the first place. To an outside observer that certainly showed chutzpah.

Finally, of the 193 parking stalls the developer proposed only 156 were required by the city; this was an increase of 23.7%. This increase was portrayed by the developer to be an effort to minimize street parking. The position of the developer on this issue, in the opinion of the neighbours, did not have merit since the neighbourhood parking regulations were designed to ensure there would be no overflow street parking.

The neighbours represented to council that, without the promise to build the short-term low cost rental units, the property would never have been rezoned to HD2 and that, without those units, the developer should not be rewarded with increased density. It would set a dangerous precedent; that is, you could promise one thing but, once you got rezoning, you could build something entirely different. A classic “bait and switch” ploy.

Fortunately, at a meeting on June 23, council voted to deny the variances and rejected the proposal.

That means no other proposal for this property can be made for a full year. Hopefully this rejection will send a message to those inclined to try this type of ploy.

Council may also want to consider instituting an effective method of deterrence: for example, a bylaw forbidding any variances in the zoning criteria of a rezoned property for 10 years from the date of the rezoning.

David Bond is a retired bank economist who lives in Kelowna.