Kelowna bought $3.5M industrial property from Hotel Eldorado owner amid boardwalk vote

Kelowna city hall was finalizing a $3.5 million land deal with the owner of Hotel Eldorado just as city council voted to take over it’s lakefront boardwalk.

The owner didn’t know about the decision to expropriate the disputed boardwalk while his company sold industrial land to the City a day later, according to court documents.

Hotel Eldorado’s petition to BC Supreme Court reveals the City bought a “large parcel” on Beaver Lake Road from the hotel owner’s other company last month.

As part of the hotel’s effort to block expropriation of the boardwalk, it wants a judge to consider whether it should have been notified before finalizing the Beaver Lake Road sale.

It’s not the first time the hotel’s dispute with city hall has landed in court over what has now become a years-long feud over what is supposed to be a publicly accessible boardwalk near Rotary Beach and the Cook Road boat launch.

What property the city bought isn’t known, but it was owned by Midwest Ventures Ltd, which is one of hotel owner Ted Callahan’s companies and closely connected to his Argus Properties Ltd. The property is likely connected to the Argus Business Park project on Beaver Lake Road.

Although the petition suggests the vote to expropriate the boardwalk was done “secretly” amid negotiations with Callahan’s other company, there’s no suggestion the City should have done them in conjunction. Instead, the hotel simply asks that a judge consider whether the City should have been more transparent as it attempts to block expropriation.

City council voted to take over the boardwalk on July 13. Meanwhile, the $3.5 million purchase was signed on July 14 and the City informed Hotel Eldorado of the expropriation vote on July 16, according to the hotel’s petition to the court.

On July 20, the City announced publicly it would be expropriating the boardwalk.

The City’s real estate manager confirmed the deal with Midwest Ventures was signed, but neither are bound to the sale yet and there are still some conditions that haven’t been settled.

“Several conditions must still be satisfied before the transaction can proceed, and the agreement has not been presented to or endorsed by council,” Johannes Saufferer told iNFOnews.ca in a written statement.

He did not say what those conditions are.

It’s not clear how long the deal has been in the works, nor is it known what the City plans to use it for, but real estate deals are typically done in closed council meetings, remaining confidential until the deal is done. In this case, the $3.5 million purchase does not appear to have been announced yet.

The lakeside boardwalk in front of Manteo Resort and Hotel Eldorado is private property, but a deal with the City maintains the public should have access. It was first closed during the COVID-19 pandemic as the company cited health reasons, then a judge ordered it be reopened and it was closed again because it needed repairs.

City engineers confirmed it needed work last year and, since then, only hotel guests have been allowed and no work has been done. The City has claimed the hotel denied entry for its workers, while the hotel now claims it has failed to negotiate terms of the repair.

Last week, the City said it would not comment on the boardwalk dispute itself since the matter is now in court.

The City has not responded in court.