North Okanagan regional district to pay $350K to landowner over Okanagan Rail Trail expropriation

The Regional District of the North Okanagan has been forced to hand over $350,000 after a judge found that it had shortchanged a developer when it expropriated a piece of waterfront land in Coldstream to build the Okanagan Rail Trail.

According to an Oct. 29 BC Supreme Court decision, the Regional District of the North Okanagan paid Anita Galloway and her family company Kalview Estates $170,000 when it took over ownership of the land in 2019.

However, Kalview Estates argued the half-acre slice on Kalamalka Lake with 600 feet of waterfront was worth a lot more.

In 2020, Kalview Estates and Josh, Anita, and Robert Galloway took legal action against the regional district lamenting the loss of their private beach and arguing the development potential of the land meant it was worth considerably more.

How much more was a question BC Supreme Court Justice Carla Forth had to decide.

The prices of houses on WestKal Road in Coldstream start at more than $2 million, with some valued at over $4 million.

The decision said the Galloway family purchased the land in the 1980s, along with a far larger piece, which then became the Greystone Drive subdivision.

In 2007, Anita Galloway bought the land that was expropriated for $87,000.

Its irregular size, along with its close proximity to the water, made development difficult and when the Regional District expropriated the land it hadn’t been developed.

During the course of a 10-day trial, the developer submitted numerous appraisal reports with the highest saying the land was worth $580,000.

A rebuttal report from the regional district’s appraisal expert put it at $280,000, saying building on the site would be “extremely challenging.”

Reports submitted by both sides painted a different picture of what could be built on the site, depending on whether the District of Coldstream would grant variances for its building requirements.

Justice Forth said she wouldn’t make any assumption that the District of Coldstream would have provided a variance to allow for the construction of a large home and would base the land value on what development was “reasonably probable.”

After parsing through numerous reports and days of testimony, she made a decision.

“I find that the highest and best use for the property was as a holding property with an undetermined development potential that included the possibility of a conventional home, with the more likely scenario being a recreational type of home or cabin or an unconventional home,” the Justice said.

Ultimately, the Justice ruled the land was worth $706,000, if it had services and road access. The figure is at the high end of the Regional District appraiser’s evaluation and the low end of the developer’s.

As the site doesn’t have service or road access, the Justice knocked off $190,000, leaving the property worth $516,000 in 2019.

As the developer had already received $170,000, the court ordered the regional district to pay the remaining $346,000.

While the developer argued for damages for living in the “shadow” of the expropriation, the Justice dismissed the claim.

The regional district will, however, have to pay court costs and interest.