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Breaking: Denciti shocked as Kelowna looks to reverse zoning

Vancouver developer purchased the Kelowna Springs Golf Course after city confirmed it would be zoned industrial – but now city council may change its mind
Kelowna Springs Golf Course will remain a golf course until at least the end of this year, perhaps much longer. | Tourism Kelowna

This Monday, March 20, a Vancouver industrial developer may find out if the 106 acres it purchased in Kelowna will remain valuable industrial property or will revert back to being a golf course.

Denciti Development Corp bought the Kelowna Springs Golf Course in October 2022 after Robert Miles, long range policy planning manager for Kelowna, confirmed, in August, that the golf course was marked for conversion to industrial use.

“A significant increase in industrial development, such as storage, distribution and warehousing space is expected over the next 20 years,” Miles told Glacier Media at the time.

Financial details were not released, but the 106.4-acre property at 480 Penno Road, Kelowna, B.C., had a land value of $4.35 million in July, 2022, according to BC Assessment.

However, the latest four sales of other industrial land in Kelowna sold for an average of $3.8 million per acre, though none were larger than 13 acres.

Kelowna’s industrial vacancy rate is a tight 1 per cent, according to HM Commercial of Kelowna.  

When the motion to confirm the industrial designation of the property was approved by city council, Denciti moved forward with the purchase.

But, on February 27, Kelowna council directed staff to consider a bylaw to amend the official community plan and revert the zoning from industrial back to private recreational, meaning it would likely remain a golf course.

A council meeting, and potential vote, on the amendment is slated for March 20.

The decision came as a shock to Denciti and its CEO Garry Fawley, who has been involved in developing about 20 projects in the Kelowna area over the past 25 years. 

“We were caught off guard when this became an issue,” Fawley told the Real Estate News Exchange, noting the previous council’s unanimous vote to approve the official community plan (OCP), the approval from city staff, and its former owner’s work to plan a new future for the property.

The original concept was to take 18 months to do the necessary engineering work, environmental studies and other work to create a long-term plan to develop the entire property for various types of industrial and/or warehousing purposes.

Now, Fawley is asking for six months to reach out to the community and to create a new vision for the site before council moves further  to formally reverse the OCP.

Redevelopment of the property as industrial would generate scores of new jobs and approximately $1.17 million in annual tax revenue for the city, according to Denciti. The site is five minutes south of the Kelowna airport, close to Highway 97 and other industrial activity.