Following an extremely long city council meeting that ended well past midnight this past Tuesday, Westcorp's plan to build the tallest structure in the city on the former Willow Inn site along Mill Street and Queensway Avenue was approved. The vote was 5-2 in favour, with councillors Charlie Hodge and Ryan Donn voting against, Councillor Maxine DeHart recusing herself (she's Director of Sales with the Ramada on Hwy 97 and therefore has a conflict of interest), and Councillor Tracy Gray absent.
The public hearing portion featured speaker after speaker in favour of the project, rallying against what was the project's biggest hurdle, a Community Planning Department report released a week earlier that deemed the project unfit for the area.
The History of Westcorp's Development Proposal
The development has a lengthy backstory that dates back to the late aughties when Westcorp principal Phil Milroy financed what is known as a comprehensive development plan (CD-21) for a large swath of downtown, where the company also owns other property. The council of the day rescinded his proposed CD-21 zone that would have included use of part of Kerry Park for their hotel plans. That proposal at the time almost tore Kelowna apart with its equal amount of backers and detractors.
What ultimately came out of that period (late 2012) was a Downtown Plan that was then adopted into the Official Community Plan (OCP) for the city. Part of this OCP reads “The former Willow Inn site at the corner of Queensway Avenue and Mill Street is significant given the site’s proximity to the waterfront and its high visibility. In order to achieve approval for up to 19 storeys on this site, any proposed development should be required to demonstrate that it gives careful consideration to view impacts from other parts of downtown, is a signature landmark building and that it meets a high standard of design excellence regarding aesthetics and building performance.”
The foundational building height policy stated within the OCP emphasized that any future proposal for the area needs to demonstrate an appreciation and "understanding of the context" of both the subject property and surrounding area, and take into account shadowing, view impacts, and impacts on the overall skyline. Interestingly, the Community Planning Department found that this latest Westcorp project goes against everything outlined in this very policy, but more on that later.
With this now council-endorsed OCP in place, Westcorp submitted their new proposal: a 26 storey hotel on the Willow Inn site – seven floors beyond the OCP's recommended height of 19 floors – with 189 hotel rooms and 25 long-stay rental suites for a total of 214 units, along with a convention centre and above ground parking. That proposal was approved by city council.
In 2016 Westcorp removed the existing buildings on the Water Street side and commenced with their ground testing. And then later that same year... a sudden shift – Westcorp spokesperson Gail Temple announced that the project would be delayed. She stated, "We have decided that the window for construction of our foundation during low water table levels has now become too tight to begin construction in March.... as a result, we will wait until after the summer when the water table recedes to begin construction."
We now know that wasn't necessarily the entire reason for the delay. It has been documented that Westcorp was having issues with financing. Their lenders wanted to mitigate their risk by having Westcorp sell off the "long stay units" included in the proposal – basically convert them to condos so part of the project could be pre-sold.
According to Westcorp, the plans weren't fashioned to include condo units – ceiling heights were too low and the apartments in question would be regarded as unappealing to buyers (the latter is my presumption) as they weren't sized appropriately for full time residences. And so, it appears, the developer elected instead to let their approved building permit expire. What immediately followed was a nice big paved parking lot featuring the priciest of parking rates in the city.
Tuesday's Council Meeting Recap
While the public hearing actually started at 6pm on Tuesday, it wasn't until approximately two and half hours in that the Westcorp proposal was tabled. Why council didn't elect to table this proposal first given the significant level of public interest and amount of people that showed up for it, I have no idea. It wasn't until midnight that council actually voted for its approval.
First up was the city staff's Urban Planning Manager, Terry Barton who went over some of the details contained within his 16 page report recommending that council not authorize the development permit for the hotel to move forward. You can read that report in full here. Spoiler: it goes beyond just the skyscraper issue.
Next up was Westcorp spokesperson Temple who showed the building renderings and basically spent the next ten minutes or so presenting the proposal to council. At the end of her presentation, she gave up on trying to get a file to run on the overhead that would show a "fly over" of the hotel created by Westcorp's Swedish landscape architects, WSP.
Side note: the next day however, Temple visited Csek Creative's office to showcase this very same file with Csek's "news" blog, Kelowna Now. Kelowna Now's Kent Molgat (former CTV on-camera employee who you might recognize) sat down with her and conducted a short interview lobbing a few softball questions her way. It was interesting to see how they framed the debate's con side, leaving it to just the size and character of the building, and not what Westcorp thought of the city staff's issues with it. That might have a little something to do with Csek and Kelowna Now's cozy relationship with city hall and the developer. I cannot for the life of me imagine a real news outlet not asking them about the planners' objections. You can view this fly over rendering and interview on their Youtube channel.
Side-side note to Csek: if you're going to have Temple up to your office for an interview and present it as "news", then you really should disclose that your owner Nikki Csek, and Kyle Spence, a Westcorp employee and general manager of the Downtown Marina (self-proclaimed integral to the design of new hotel) both sit on the board of the Downtown BIA and obviously have common interests.
Following Temple's presentation, questions by council were tabled. Mayor Colin Basran started the short question period off by asking Temple a juicy one: what happened to the previously approved proposal? In short, she answered that Westcorp was fully prepared to go forward with it after having spent two million dollars on construction drawings, however they experienced challenges through the "financing portion of the exercise".
She expressed that while developers are always bullish with respect to future revenues, costs, and "how long absorption will take", lenders on the other hand are conservative, and they wanted, as mentioned above, a low-risk set-up by having the condo-buyers' investment. This is when she claims that Westcorp had to redesign aspects of the tower to accommodate for that and then realized that the above ground parking in the previous proposal introduced "weaknesses".
Councillor Hodge then asked her how the company is going to dig down to accommodate for the two levels of (now-proposed) underground parking Westcorp introduced into the latest proposal, at which point she handed the question over to a member of Westcorp's team from Vancouver (I didn't catch his name). He stated that new technology enables builders to dig in previously impossible places like Richmond, BC, a city that sits just one meter above current sea levels. He explained that there are four buildings that have been built in that city with two levels of underground parking, and three more signed off on for the near future.
Councillor Siebens merely wanted clarification on what was going to be contained in the building and where, and Councillor Given expressed concerns for the need of a 20 meter step back design of the building's podium along Water Street to be amended into the proposal (more on that later).
The Public Gets the Mic
Twenty-five people spoke on the project Tuesday, 21 of which were in favour. Downtown Kelowna's BIA President and Vice President, along with the CEO of Tourism Kelowna obviously threw their full support behind the project, citing Westcorp as the perfect community developer with a doubt-free economic analysis, and that the new building will keep Kelowna competitive (for tourism) in the years to come. Someone spoke on behalf of Accelerate Okanagan's CEO, Raghwa Gopal about how the tech industry is growing by leaps and bounds, and how cool it is that a developer is willing pitch a 200 million project in Kelowna.
Some of the more interesting comments came from a representative of Bardel Entertainment who stated that with 43% of Kelowna's land designated as ALR (Agricultural Land Reserve), and Kelowna's sprawl already touching this land, the only way to grow the city and housing is to build up. His statement echoed Nicole Rustad's (Disney Interactive). She expressed that with only 40% of the shoreline left open for both public and in some parts endangered species to use, we can no longer encroach on wildlife and need to build up to protect our natural spaces.
Perhaps one of the businesses most impacted by the build of a project this size would be those located directly across from it on Water Street. Sturgeon Hall had a representative come out and read their position fully supporting the plan, and promising not to sour on the development through the two or three years that they will undoubtedly have to endure due to the build. Concluding the letter they wondered that if the proposal were to be denied by council, "when [would be] the next time someone is going to spend 230 million dollars on a project here?"
The most poignant part of the evening came when a member of the De Mara family stepped up to the mic. Her great grandmother was one of the original builders of the Willow Inn in 1928, and later in 1935 the Willow Lodges beside it. She delivered a history of her ancestors, their business ultimately expanding into an insurance company, and their sale of the Willow Inn to the city back in 1958 to accommodate the city's first official Centennial Museum – it was a nice glimpse of the city's local development history. She indicated that if her great grandmother were still alive today she would view this proposal as a pretty big disappointment, adding how the hotel could potentially cut off the community and that it does very little to remember the heritage of the site.
Closing in on midnight, council was given the opportunity for final remarks and their vote. Councillor Luke Stack was first up and immediately threw his support behind the project. While he stated that he has a ton of respect for city staff's expertise, and that his deliberation and decision was a tough one, in the end he felt the project would be a net gain: completing the missing link for the Kerry Park walkway, beautifying the Queensway interface, and filling the need for convention space in the city and so creating a big economic spinoff.
Next up was Councillor Brad Sieben. While he complimented the staff's report as "really well crafted", he did mention that given the "state of boom" the city is in, these reports should never be taken for granted. He nonetheless voted in favour of the project. He holds that Kelowna's need for new residents in the area, and the significant public space gains outweigh his initial concerns with the podium on Water Street, adding that the "glazing" Westcorp introduced softened it a lot.
Councillor Gail Given commented how "amazing" the Kerry Park side of the proposal is and how something as "iconic as this" will set a new standard. She further remarked that since the time when the OCP was established in 2012, the community's feelings over height have changed a lot – we've basically warmed up to the prospects that city must grow up and not sprawl out.
Councillor Ryan Donn, a dissenter, indicated that he's never seen a building approved with a negative staff recommendation, and that with upwards of ten additional buildings slated to go through this very same approval process, he'd rather not set a precedent here and instead prefer that council rely on consistent expert planning policy recommendations. In addition to what he said this night, he also wrote a brief explanation the following day on his Facebook page. His rationale speaks to the need for more public consideration when the big decisions go down.
"The WestCorp Hotel was approved tonight. I struggled with this DVP more than any other development that we have seen since I joined council but at the end of the day I did vote against it. I don’t have a problem with the height or disagree with the need but I often lean on the expertise of staff. The staff didn’t support the development and honestly that was my main concern. We heard that there are 10 more towers being developed or coming to council for downtown. I wanted this and all future developers of those towers to work harder with staff to gain their support. I don’t feel that the exact $ of offsite improvements or interface with the public realm should be negotiated at the council table. I hope that developers come forward to council with staff support so that we can support or vote against it based on our perspective and the input of the public. I honestly think more of you agreed with this development that are on this page so we will simply have to agree to disagree but you get your way if you wanted this to happen. Onto next weeks agenda. Let’s fly forward."
Councillor Charlie Hodge said that he read the staff's report three times, and had a very productive two hour meeting with Westcorp' Gail Temple, and while there's "no question it’s a stunning project", in the end he had to vote no because downtown needs to remain a great waterfront area.
Councillor Mohini Singh lent her approval to the project, and stated that while the developer wins here, the citizens of Kelowna also win. She did share some of my same fears when she said that she hopes that Westcorp doesn't return to the table with any more changes and delays, and completes the project in a timely fashion (the following day the BC government announced a speculation housing tax for Kelowna along with some other areas – more on that below). She also added that as a growing city, we now must start questioning exactly how many structures we want downtown.
Finally it was Mayor Basran's turn. First he told the room of the sheer number of comments he received from people who were not happy with the city staff's negative ruling on the project. "Staff won't always support stuff that comes in through the door", he said, and added that there were a massive amount of variances that city staff had to deal with and that it just wasn't all about form and character. In the end though, "the applicant convinced him the project was worthy of pushing past the policy".
He views the hotel as epitomizing Kelowna's goals of having a "world class downtown" and a vibrant city. He believes that Westcorp's proposal to add more floors to the tower, "is not as simple as [just] adding to a project for developers to get rich. Just ask the previous developers of Sopa Square, the Conservatory, or Lucaya" (the former project in the north end that sat idle for years because the developers went broke, and is now 1151 Sunset).
Finally, he added that with respect to future projects, everything will be looked at on a case by case basis, and just because the council elected to overrule city staff findings on this project, that won't set a precedent. "It's not carte blanche for developers" of upcoming proposals "to add floors", and essentially go against the OCP.
Following the 5-2 vote in favour of the project, Councillor Given indicated that she wanted to address the 20m step-back of the podium along Water Street that's currently not in the proposal (or shown in the renderings). Council concluded that an amended development plan with a variance classified as "minor" would be required before a building permit is issued.
This was one of my concerns with the project – the podium massing, particularly on Water St. It seemed out of place and loomed over its surroundings undoubtedly casting sections of the street in darkness for what will likely be most hours of the day if constructed according to these renderings. I too look forward to seeing what this additional step-back will look like.
Time to Ask Some Hard Questions
If Westcorp didn't already have a bit of a muddied recent past with this piece of land, I would honestly feel far more comfortable with this proposal. With the previous iteration of the hotel winning approval and then the sudden delays explained away as a supposed issue with the water table, then a realization that it just wasn't good enough, to ultimately what we learned very recently was also an issue with finances, it all leads to a considerable dampening of enthusiasm for the project.
For years, I passed by the foundation remnants left behind by the developer for Lucaya on my street (the developer went broke during the 2008 housing recession). The junk heap that became a permanent fixture in an otherwise fertile part of town, was a daily reminder that the words "trouble securing financing" are not something you want to hear at the start of a project. I suppose I could be calmed by the many council meeting attendee's claims of Westcorp's "first class developer" status. However after some considerable Google time, nothing notable surfaces that speaks to a track record of projects of a similar scope. Have a look at their resume.
Furthermore, the just-announced "speculation tax" aimed at out-of-province property owners, that will include Kelowna and West Kelowna (along with Metro Vancouver, the Fraser Valley, Victoria and Nanaimo), could directly affect the viability of the Westcorp project, no? Westcorp likely didn't see this coming in so abruptly, and with looming interest rate hikes, is this the housing market the developers were counting on for pre-sales?
Speaking of deep-diving on Westcorp, I also came across city council's last election campaign contributions, and listed on Elections BC's web site was Westcorp's principal Phil Milroy contributions to all five members of council who voted to approve this latest proposal – albeit the contributions themselves were quite minimal and nowhere near Vancouver levels. Certainly a co-relation more than a conspiracy (lol), but it's worth noting nonetheless.
Finally, I'll add that the absence of a councillor from what will probably be the most significant proposal to pass through city council's chambers for some time, makes me a little curious. Councillor Tracy Gray has not yet issued a statement. Here's hoping that all is well with her.
I'll finish by saying that I'm very much in support of this project in general. Kelowna above all else needs a proper convention centre and new business amenities that will attract people to come here from all across Canada. Of course we also need more people to visit and stay in downtown more regularly, and certainly we must drive density into the core and have everyone buy into what it offers now, and in the future.
I feel that as a city on the brink of real local economic development, we do need to ask more of our council to assure us that it is taking the best, not the shiniest, or most desperate path forward, and that it is more open to the city planner's concerns – they are the ones that look beyond the election cycle, and into balancing corporate partners with the commonwealth of Kelowna after all. In the meantime I'll be keeping an eye on Basran's "carte blanche" gatekeeping, and riding some of Councillor Donn's "fly-forward" optimism.