Parking crunch shrinks downtown development
Despite having confirmed tenants for two floors of office space in a proposed eight-storey building in downtown Penticton, the developer has scaled back the project due to a lack of parking nearby, city council heard Tuesday.
“You had significant tenants and the reason for them not coming to your property and paying the lease and giving Penticton more of a walkable, workable place to live was because they couldn’t park?” asked Coun. Campbell Watt.
“Yup,” replied developer Victor Durman. “And they were local tenants.”
The project at 32 Backstreet Blvd. was originally approved in May 2017 with three floors of commercial space on the bottom and 32 apartments on the top five floors.
The revised version will see the building capped at six storeys with 36 apartments, plus parking and just a small retail space on the ground floor.
Durman explained the original proposal featured 32 parking stalls — 30 of which his commercial tenants wanted, leaving little room for residential tenants’ vehicles.
He considered building a parkade next to the site, but found the cost prohibitive at $50,000 per stall. He also proposed buying a parking lot four blocks away, but the tenants balked at that suggestion.
Durman acknowledged the parking crunch is seasonal, but said it’s nonetheless choking off supply of needed high-end office space in downtown Penticton.
“There are some major tenants who would be willing to pay sensible, economic rents, but they need parking,” he said.
A second factor cited by Durman in his decision to reduce the height of the tower is a trade war between the U.S. and Canada that has hiked the price of steel. Going down to six storeys means the structure can be built with wood products instead.
Watt was the lone vote against re-approving the project, advocating instead to have Durman sit down with city staff to figure out a way to incorporate more commercial space in the building.
“We are working at densifying downtown and we will need these spaces,” said Watt, “and I just don’t want to sacrifice them right now.”