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Developer sues City of Kelowna, mayor over scuttled project

This is the second lawsuit brought against the city by Centurion Appelt but the first targeting the mayor
Kelowna Mayor Tom Dyas

Kelowna Mayor Tom Dyas is being accused of using his position to torpedo an attempt to redevelop the former RCMP site on Doyle Avenue.

The accusations were brought forward by 350 Doyle Avenue Holdings and Centurion Appelt in a lawsuit filed Thursday in B.C. Supreme Court in Vancouver.

Dyas and the City of Kelowna are named as defendants in the suit.

This is the second lawsuit brought against the city by Appelt concerning the property but the first naming Dyas as a defendant.

In the latest suit, the developer claims Dyas and his council used improper reasons to delay or stop the development.

The lawsuit alleges Dyas was opposed to the redevelopment plan from the outset as a member of Kelowna Legacy Group (KLG), who had a different vision for the site.

They claim Dyas' political objectives, vision for the property, desire to appease KLG and the city's desire to reacquire the lease at a discounted price to pursue other opportunities led to decisions by council to take measures to delay or quash the project.

The suit claims Dyas and developer Les Bellamy, as members of KLG, envisioned the site be redeveloped, along with the current Kelowna Community Theatre and a site across the street, as a new performing arts centre.

Despite their objections, the city at the time agreed to lease the property to Rise Commercial Development in 2019 following a request for proposals.

What began as a 13-storey mixed-use development with residential units, commercial and community amenity space as well as extension of the ArtWalk and construction of a civic plaza, eventually became a 25-storey development, at the request of the city.

Throughout the process, the lawsuit alleges Dyas and KLG continued to speak out against the project through protests, press releases and posts on social media, at one point accusing Appelt of a "bait and switch" by changing the design of the building. Appelt denied those accusations.

The civil claim alleges the developer continued to move forward with the project, including a pledge to set aside 10 per cent of the rental units as affordable housing. Finalizing that agreement was a condition for issuance of development and development variance permits.

A public hearing on those permits was held in July of 2022 before which a protest rally was held in front of city hall by members of KLG, including Dyas.

Council approved issuance of both the development and development variance permits.

"In or around the same time a campaign period was underway for the city election. Dyas again ran for mayor and during the course of his campaign continued to express opposition to the project," the suit contends.

"Among other things Dyas referred during a candidates debate to 'someone who went for a 12-storey and now has a 25-storey' without contributing significantly to the city."

The new mayor and council, the suit claims, at some point decided to prevent the project from continuing.

They point to two instances, denial of the housing agreement and rescindment of the development and development variance permit after it was learned several students who spoke in favour of the project at the public hearing had been paid $250 each.

Appelt filed a lawsuit in September over that decision.

"The reasons provided to the developer for the city's attempts to stop and/or delay the project from proceeding were not the true reasons for those actions," the latest suit says.

"Rather, the city's current city council and Mayor Dyas have, at all material times, been motivated to stop, delay and/or harm the project for unlawful or improper reasons, including without limitation:"

  • Advancing political objectives unrelated to any lawful or valid concern of the city with respect to the project
  • Appeasing members of KLG
  • Appeasing Bellamy and other personal friends of Mayor Dyas and/or city council who stand to personally benefit from stopping the project by, among other things, preserving views from their condominium buildings, maintaining their property values, and profiting from their own opportunity to redevelop the property and the theatre property
  • Advancing the city’s business interests as owner of the property and landlord under the Lease, including but not limited to, suppressing the value of the property so that the city could ultimately reacquire it at a lower price
  • Mayor Dyas’ and members of city council’s personal dislike of the project and/or the developer.

The suit claims for those reasons council, or some of them, and Mayor Dyas took unlawful steps to delay or stop the project.

Appelt claims it has spent significant resources and suffered lost and delayed profits as a result of the delays.

They are seeking damages for breach of contract, breach of the duty of good faith contractual performance and/or misfeasance in public office plus special damages and costs.

The city issued a brief statement on the lawsuit Friday afternoon.

"The city is confident that the legal proceedings will demonstrate that mayor and council followed due process and acted in the best interest of the city," the statement read.

"As these matters are before the courts, we will not be commenting further on the specifics of the case. We trust that the court will examine the facts and the law and reach a fair and reasonable conclusion."

The city has three weeks to formally respond to the lawsuit.

Allegations contained within the suit have not yet been tested in a court of law.