Council voted in support of a boundary extension for a property targeted for development of a boutique treehouse hotel, despite the strong opposition of Revelstoke Mountain Resort.
David and Shelley Evans applied to have an 18-acre property they own annexed to the city in order to receive city water and sewer services for their proposed development.
The property is located along the bend of Camozzi Road, just south of the resort. The annexation request was supported by the last council and did not get any public opposition.
Last week, council voted once again in support of the request, despite receiving several letters from Northland Properties, RMR's parent company, calling the hotel a "parasitic development."
One letter from Rob Toor, a lawyer for Northland, said that if the city grants the boundary extension, they would seek compensation for the money spent on infrastructure leading to the resort.
He added the request goes against the resort's Master Development Agreement and that allowing developments outside the resort boundaries that use its infrastructure "will dampen infrastructure growth at the resort and directly and negatively affect the interests of the resort.
"In addition, the resort would see a dramatic decrease in investors purchasing at the resort, as investors could purchase from competition with no pre infrastructure costs," he wrote. "This would cause an unfair advantage for such parasitic developments. This was not contemplated when the MDA and the resort was planned."
The province's Mountain Resort Branch wrote a letter to the city siding with RMR.
"The ability of a third-party developer to construct commercial accommodation immediately adjacent to the resort, without having been made to develop costly infrastructure, most certainly provides an unfair competitive advantage," wrote Ben Sampson, a land officer with the Ministry of Forests, Lands & Natural Resource Operations.
He added that the Evanses should explore development within the resort lands instead.
Mayor Mark McKee said he wasn't concerned council's decision would affect relations with the resort. The new council has made improving relationships with RMR a top priority.
"I know they're an important part of the community but this council has decided it's going to move forward on economic development opportunities and I think that the resort recognizes that," he said.
He added the resort has benefitted by being able to hook into the city sewage lagoon instead of having to build their own sewage treatment plant.
"There were advantages to them and there were advantages to the city."
The request needs to be approved by the provincial government before it is finalized.