The future of an 85-acre tract near Kelowna International Airport is in flux after construction costs nixed plans for a state-of-the-art fruit packing plant.
B.C. Tree Fruits co-operative bought the site in 2019 with the vision of relocating its operations from downtown Kelowna and consolidating them at the new site on Old Vernon Road.
But under new president and CEO Warren Sarafinchan, a review of co-op operations led to the co-op’s headquarters in Lake Country and a review of its real estate. Several assets were deemed surplus, but plans for a new Kelowna packing house remained alive until this week.
“Until recently, management and the board collectively believed that a new build in Kelowna was the best course of action,” Sarafinchan said in an August 17 statement. “However, the sharp rise in construction costs and interest rates along with changes in the industry made the plan for a new build far too risky.”
Some elements of the project had seen increases in excess of 30 per cent, and the approval process for the site – which sits in the Agricultural Land Reserve – hadn’t even begun.
“It’s hard to predict when costs will normalize,” Sarafinchan told Western Investor. “It would carry far too much risk.”
Instead, the BC Tree Fruits – one of the province’s largest agricultural co-ops – will consolidate apple and cherry packing operations at its existing plant in Oliver, which currently handles the co-op’s entire volume of peaches, nectarines, apricots and other stone fruits.
Oliver was chosen for the new consolidated packing plant because of its central location to its approximately 275 grower members in the Okanagan, Similkameen and Creston valleys.
“The expansion of our Oliver packing facility will give us the capacity and efficiencies needed to service our customers while delivering solid income back to our growers,” Sarafinchan said.
Preliminary plans call for a significant expansion, including a new pregrading line, packing line and storage facility.
The site is 16 acres and the current plant is approximately 120,000 square feet. The expansion, if all elements are approved, would boost the size to 220,000 square feet.
The expansion of the Oliver plant will see the co-op shutter its packing facilities in Kelowna and Lake Country this fall and prepare them for sale.
However, it will retain its receiving and storage facilities here and in six other communities across southern B.C.
Sarafinchan said plans for the 85-acre site on Old Vernon Road remain up in the air, but the co-op intends to retain ownership.
“The plan is not to sell the Old Vernon Road property,” Sarafinchan said. “There may be opportunities … to have it as a test orchard, a place that we can show growers some of the new and leading technologies.”
Under Sarafinchan’s leadership, the co-op has disposed of assets including its Kelowna head office, a warehouse site in Kelowna and its Osoyoos packing house. The sales have garnered $48.7 million for the co-op over the past three years.
