Taxpayers left holding the bag
In your article of March 1 concerning the ill-fated dormitory project on Eckhardt Avenue it was stated that the “city tried to sell the lots involved for $925,000 in order to increase the city’s coffers by selling the unwanted property.”
What was not mentioned is that the city had previously bought the property for $2.5 million. Thus, had the sale gone through, the city was going to recover only 37 per cent of the original purchase price.
There are several questions I have. Why did the city pay so much for the mostly unwanted property in the first place? If the land was only worth $925,000 in 2011, surely it was not worth nearly three times as much only four or five years earlier. It is true that property values in Penticton have declined, but certainly not by 63 per cent.
Why did the sale fall through? We are assured that due diligence was carried out but it seems to have been done in a sloppy and perfunctory way; possibly because both council and the administration were so eager for the sale to be completed.
What motivating role did the Okanagan Hockey School and Academy play in all this? They already rely on the city for all the facilities they use, including that very expensive extra ice at the events centre. Was this another attempt by the city to provide them with facilities which they seem incapable of providing for themselves?
Are the legal actions against the city as innocuous as Mayor Ashton suggests? It appears that the council did authorize work to commence before the sale was finalized. Surely there is some liability here.
Most of these questions have not, and probably never will be answered. Is this due to ignorance, incompetence or what? As it is, the citizens of the city have paid $2.5 million (approximately $81 per head) for property which is not needed and cannot be sold. In addition, we may well face additional legal fees and penalties. This does not seem like a very competent way to run a city.
Raymond S. Corteen