Failed Kelowna Mountain eyes AI server farm; files lawsuit against regional district

The owners behind a once-planned Kelowna Mountain vineyard are taking the Central Okanagan Regional District to court, this time over new plans to build an AI server farm.

Kelowna Mountain Development Services Ltd. submitted plans for a data centre to the regional district last month, proposing a “private cloud-based” facility on the massive mountainside property, according to a notice of claim filed in BC Supreme Court.

The company claimed the regional district responded to its development applications with a refusal letter, but a regional district spokesperson said planning staff was waiting for more details before moving forward.

It’s one of many lawsuits filed over the years centred around the embattled Kelowna Mountain property, which remains a vacant, partially finished winery and park. Another was filed last year when the developer claimed the regional district overstepped its authority in changing its zoning rules in the area.

The new lawsuit outlines plans that appear to abandon the sprawling attraction, replacing it with an AI server centre, amid a booming tech industry.

Kelowna Mountain said it discontinued its previous legal claim against the regional district, which took issue with zoning changes affecting its three properties. Though cancelled, those previous lawsuits put the regional district on “explicit notice” that those land-use decisions were “legally contentious” and any “misinterpretation” of zoning bylaws would cause harm to the company’s interests.

Kelowna Mountain, along with a numbered company, filed the claim after submitting development applications, Nov. 10, and meeting with regional district staff for a preliminary meeting, Dec. 8.

According to the claim, regional district staff refused the permit, finding it to be “incomplete” and out of compliance with zoning rules in the area.

Kelowna Mountain claimed that decision did not follow local government procedures and that it caused a lost economic opportunity amid a fast-moving AI market. The company “anticipated a multi-year” tenant agreement, which it said cannot be recovered once lost.

It also claimed to have wasted costs on various consulting costs like engineering, wildfire and geotechnical assessments, while it also paid more than $11,000 in application fees to the regional district.

It’s not clear how much was spent on those costs or whether a prospective data centre tenant had been arranged. The details of the regional district’s decision on the development application also aren’t known, which Kelowna Mountain described as a refusal.

The Central Okanagan Regional District describes it differently. Staff hadn’t yet made a decision on the company’s application, awaiting clarification on development plans and details about how it fits with zoning policies.

“These applications could not be processed as submitted because they were procedurally incorrect,” a regional district spokesperson added in a written statement.

According to the regional district spokesperson, the notice of claim hasn’t been served yet and offered no comment on the lawsuit.

The claims have not been proven in court and the regional district has not formally responded.