Resort’s demise delivers economic blow

By Wolf Depner - Penticton Western News - May 09, 2008

The head of the largest business organization in the region laments the demise of a major resort proposal as he predicts a slowdown in the local economy.

Developer Mel Reeves announced Tuesday the end of the Skaha Beach Club and Spa resort, blaming the worldwide sub-prime mortgage crisis.

“We can no longer delay what is our fate ... we have exhausted all our sources for financing.”

Penticton and Wine Country Chamber of Commerce president Randy Kowalchuk said the resort would have infused the local economy with revenues, jobs and much-needed hotel rooms to support the local convention and tourism sector.

“It’s a sad day. That investment in our community would have been very beneficial,” he said.

The end of the Skaha Beach Club and Spa resort is the second major development that has failed to get off the ground within six months. Developer Barry Kaplan last year lost his option to purchase a lot only several hundred metres away from Reeves’ proposed resort.

Kaplan was planning to redevelop the former Skaha Lake Tent and Trailer park into the Penticton Waterside Resort and Spa, with more than 340 residential units spread across three buildings. The units would go into a rental pool managed by Delta Hotels when their owners were not using them.

But Kaplan failed to reach a final agreement with the chain and the lot remains empty.

Kowalchuk — who finds himself in the middle of a complicated golf resort development project in Summerland — said deals of this size are “very complicated” with many different angles.

“The reality is Penticton is still a small market and when things get rough, small markets are the first to feel the pinch,” he said.

These development failures come during an ongoing period of economic uncertainty and may be signals of additional troubles ahead.

“Absolutely,” said Kowalchuk. “The Okanagan is not an island.”

While the local economy is stronger than it was five years ago, growth will likely return to historical standards, he said.

“We are very optimistic (about the long-term prospects), but it is just not going to be the pace everybody is predicting.”

All segments of the community need to take a longer view and develop more realistic expectations, he said.

It is not clear yet how the site will be used in the future. Several options are currently considered.

The city may still see something “spectacular,” said Kowalchuk. But he added that it may take up to 10 years before that might materialize.

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Resort’s demise delivers economic blow

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