The Highlands of East Hill multi-level housing development in Vernon has been stopped by the developer. (Roger Knox - Black Press)

Major Okanagan housing development shuts down

Construction on The Highlands of East Hill in Vernon had $24 million in pre-sales

A major Vernon development is now on hold.

A letter was posted on highlandsvernon.com Friday that The Highlands on East Hill project, located at the top of 39th Avenue on the old McMechan Reservoir, is stopped with no clear commencement date.

“Decisions of this magnitude do not come lightly but the impact on you as a future homeowner is the most important area of concern for us,” said the letter from Vernon Reservoir Development Ltd.

The developer said instructions have been issued to the trust agents for those who have made deposits on homes in the project for refunds. That is for 46 pre-sold homes.

In an article in The Morning Star on July 24, developer Stoni Consolidated Holdings of Lake Country said construction of the 20-acre, 173-unit multiple housing development, and more than two acres of green space, was set to begin at the end of July.

So, according to the letter, why would a new housing project with more than $24 million in pre-sales be put on hold indefinitely?

“The answer is that at 3:21 p.m. Aug. 1, the City of Vernon, through its legal council, informed the developer, that the developer could no longer rely on the commitments made by the city. Most of those commitments are related specifically to permits or city-controlled costs,” said the letter.

“This means that the city’s commitments regarding the timing of providing building permits, engineering approvals, site access agreements were also rescinded.”

READ MORE: New Vernon neighbourhood above East Hill proceeds

The developer said the increased risk of these actions directly impacts the timing and “the city would be in a position to make changes to previously approved draft agreements or impose further project costs or even change the project as they had threatened to do on May 27 by raising the issue of the 43rd Avenue entrance.”

“For context and as a single example, if we continued forward, but the city missed any commitment or permit deadline that resulted in a delay of the project by three weeks or more, we would not be able to complete the installation of asphalt which would restrict us from legally being able to transfer home title’s on completed homes until approximately June of 2020 regardless of the completion of the construction of the homes,” said the letter.

The Highlands of East Hill team will be contacting all homeowners on Wednesday, Aug. 7, to provide additional information and specific answers to questions.

CITY RESPONDS

Administrator Will Pearce said the city has been waiting “after many months of patient response to numerous questions” for an unconditional closing of the sale agreement on Aug. 16, but, to date, has not received a written commitment from Stoni Consolidated Holding.

“The city did not rescind commitments made to the developer yesterday over many months,” said Pearce emphatically. “The city committed to meet with the developer yesterday. The city had numerous senior staff including the CAO and director responsible for development and engineering at a meeting yesterday to work with the developer provided the developer provided, in writing, a commitment to the unconditional close of the sale agreement. This was not provided by the developer.”

Pearce said at Thursday’s meeting, the developer was represented by one individual who stated he did not have signing authority for Stoni Developments (the developer) and could not commit to an unconditional close on the sale agreement.

The city, said Pearce, immediately committed to a meeting on Tuesday morning at 10:30 a.m. provided the city received an commitment to an unconditional close of the sale agreement on Aug. 16.

“The developer representative left the meeting,” said Pearce.



roger@vernonmorningstar.com

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