Hockey Dorm hits financial hurdle

[twobits]

The mistake being made here is even refering to this guy as a developer. I don't see a developer as much as I see an opportunist making money with other peoples money. European hockey tours? Oil and gas plays? Rent to own houses? For all the stuff that the media has presented about the guy, I havn't seen anything about previous building experience. Then again, maybe he has and there are just no lawsuits tied to them.

A plan was presented to the city, engineered drawings, 50k deposit on a land sale with an OK to commence earthworks only. Investors in place, funds advanced to contractors to commence. At that point in time, everything looks fairly straight forward. Some say the city should have done background checks on the guy. Why when it is not the practice and all of the above has taken place. Perhaps there is a lesson to be learned here but I honestly don't think there were any really significant errors made by the city here. At least not for crucifiction and suggesting resignations.

Land value is still being brought up. Why? Two appraisals were done. Are you people on these boards more qualified to determine land values than the professional appraiser or was he/she also corrupt? IMO, the person/people that should get spanked and will get spanked are the investors (Fraser ??). Those are the ones who failed in their due dilligence on who they were entering into a business deal with. That is not the city's responsibility unless they were committing funds to the project and I see no evidence of that. Shall we blame the city as well for not making sure Singla Construction had the funds in place to complete the eyesore on Winnepeg St on schedule even if it meant selling units at a loss? Should the sellers of that Winnepeg St land done financial checks on Singla to ensure they would complete the project? Every bankrupt project and every stalled project in Penticton, and there are a few of them, are all about financing. Shall we blame the original sellers of the lands for all of them? Of course not and in this hockey dorm situation, that is all the city was......a seller of the land.

[Beerhunter341]

http://www.hockeyschools.com/ohs/fullNe ... newsID=118

NEWS RELEASE
Okanagan Hockey School Pursues New Dormitory Opportunity

Penticton, B.C. – (Feb. 16, 2012) – Okanagan Hockey School maintains its commitment to becoming a primary tenant in a prospective dormitory development to house its students who are now billeted in homes.

OHS had entered into a non-binding term sheet to become a tenant if the company - Okanagan Elite Hockey Association (OEHA) – had been successful in building a dormitory on land currently owned by the City of Penticton adjacent to the South Okanagan Events Centre.

OHS is not connected with the ownership or operation of Okanagan Elite Hockey Association and does not plan to enter into any future agreements with the organization.
With the expiry of that deal, OHS continues to be open to discussions with a developer who will purchase land and build and appropriate dormitory facility that could provide housing for its academy and hockey school students

“This is an addition to our business that will ensure the long-term sustainability of OHS in Penticton while providing affordable, secure, safe and comfortable housing for our students who are mainly from outside the area,” says OHS president Andy Oakes.

Okanagan Hockey School has been operating with the highest professional standards for the past 50 years. Its Okanagan Hockey Academy offers high school education and hockey training for up to 120 male and female students at a time. Students attend Penticton Senior Secondary through a partnership arrangement with the Penticton School District 67. The company’s operations are located in the South Okanagan Events Centre where students receive their hockey training.

[glassmaster]

twobits is right ... Loren Reagan shouldn't be granted the title of Developer. He sounds more like an opportunist with the ability to convince people that he is legitimate. He certainly shouldn't be lumped in with quality deverlopers and developments. The media has done a good job of uncovering his past.

[Beerhunter341]

http://www.pentictonwesternnews.com/news/139903773.html

Left in the lurch

Wade Wagstaff figured he had secured six months of work for his crew of seven people.

The owner of the Penticton-based Grizzly Excavating Ltd. said he jumped at the chance to bid on work at the proposed hockey dorm site on Eckhardt Avenue, because it would bring months of stability to his company during uncertain times for the construction industry.

“My contract was for $300,000 to do the site excavation and structural fill up to (a certain amount) of cubic metres,” Wagstaff said, adding that his crew began excavation work Nov. 23 which cleared the path for other contractors. “Basically it was a big bathtub, and there was no way to get rid of the mud and water. So we were there to haul mud and ensure they could keep moving forward and working.”

Wagstaff said he began to realize there were problems with Okanagan Elite Hockey Association project when the first of the bills came due, and payment didn’t appear.

“There were verbal rumblings that there would be cheques floating sometime between Jan. 3 and 15,” he said, adding that one of the project principals, Loren Reagan, gave him a payment timeline. “He gave me verbal assurance that cheques and money would be flowing by early January when I saw him on site one day.

“Those days came and went. I started following up daily. Every day that we were given, it kept coming and going. There was no money to be seen.”

In the meantime, Wagstaff said his staff tried to accommodate the schedules of out-of-town contractors coming on site.

“There were a lot of hours spent over and above the contract,” he said. “Even though we weren’t getting paid, we were still good enough to go by and make sure the fences were secure, trailers were secure. We went above and beyond because a lot of parties that were involved were from out of town, which we did not bill for. It was in good faith.”

On Jan. 11 — after each Grizzly Excavating crew members put in between 220 and 240 hours of work — work stopped on site. “It’s been devastating,” Wagstaff said.

The company has moved to place a lien on the property, he added, and the contractors are banding together to resolve the situation — which has been made complicated as a result of the land ownership status.

In November, Reagan and then-partner Mike Elphicke agreed to purchase nine lots from the City of Penticton for $925,000, and a $50,000 deposit was paid. Financing for the purchase fell through three times, and on Feb. 1, Penticton council voted to keep the deposit because the sale wasn’t completed. Now contractors are in the position of placing a lien on city-owned property, although they were contracted by a private developer to do the work.

After Monday’s council meeting, Mayor Dan Ashton reiterated that the city will not sell the property to cover the construction bills accrued on site, and that the city is “not in the business of protecting contractors that have entered into an agreement with other people.”

Ashton added, however, that the situation weighs heavy on his mind. “I go to sleep every night thinking about it and I wake up in the morning thinking about it … Our jurisdiction is to protect the citizens of Penticton. Do I feel for those contractors? Absolutely.”

The city’s lawyer Richard Thompson confirmed Tuesday that the city filed a “notice of interest” under the Builders’ Lien Act on the Eckhardt properties with the Land Title Office in November, which stipulates the land is not bound by liens unless the improvements in land are undertaken “at the express request of the owner.” Thompson added that “express” requests are narrowly defined in law as those in writing and requiring a contract between the land owner and lien claimant. Approving an earthworks permit would not qualify, he said.

Wagstaff said apart from the lien process, he’s not sure what other recourse is available. “I think it protects your rights against the property in question so you can get your ducks in order, the i’s dotted and t’s crossed. It gives you a year to act on the lien as far as pursuing payment,” he said, adding his requests for copies of permits issued have been denied by the city.

“Things got incredibly far along for having no money and no paperwork in place. We’re all going to take the hit for somebody else’s actions. At least at this point we are,” he said. “Who knows? This could be the demise of my business, and I had nothing to do other than being told to go to work.”

John Bowser, the project manager at Task Management charged with overseeing the project, said his company has placed a lien against the property along with 13 or 14 vendors, including consultants, contracted for the project. All told, $1.6 million in improvements have been completed and remain unpaid.

“This type of predicament is new ground for our firm,” Bowser said, noting he has 43 years of experience in construction and done several large-scale projects for both public and private sectors. “When you come up against something like this, it’s challenging.

“I used to say to people that sometimes construction is the easy part of the project. This is a project that epitomizes that.”

Bowser said there are several people trying to resolve the matter, and he hopes that in a year, Penticton residents will have a good news story on their hands.

“Right now, the job is not proceeding, the money is not in place, the land hasn’t been bought, but the permits are ready to go. The construction manager and contractors have done their job and are ready to go, the city has done their job because we’ve worked with the city hand in hand to get this so the project can proceed consistent with the requirements of the building code and local planning authorities,” he said. “We haven’t circumvented any processes, we just shortened it and that was with the spirit of co-operation of both mayor and council, planning and permitting.

“There’s no skeletons here in the process. Everybody has performed except for one party.”

The Okanagan Hockey School said last week that it remains open to discussion with potential developers looking to purchase the land and build a dormitory. Reagan has stated before he is working with new investors to back the project. Ashton has said there is no proposal in front of them and clarification of outstanding issues would be required.

Bowser said he recognizes the concern in the community, but local leaders have “got to get everybody back to where there’s some calm. Once you establish that, then you can get people thinking again and the ideas flowing.”

In the meantime, he said Penticton would do well to rally around smaller contractors involved in the project.

“All the contractors involved in this contract are very good at what they do. There was no problem with delivery, they met the requirements of schedule right up to the stoppage, and it’s unfortunate we’re in the position we are in right now,” he said.

“Wade’s a first-class contractor. He’s honest, puts himself out there. Young, home-grown guy with a young family. If there’s other people in the community looking for work, doing some construction, then Grizzly Excavating should be the one you call.”

[stewie007]

Such classic city hall, dan ashton garbage. If everything was done as it was supposed to be, release the permits to Grizzly and the public, let's see them and prove to us that this council is acting in good faith and by the laws that they bind every other business or person in this town to. Why is it that I get shut down if I start building a deck at my own home without proper permits but a mulit-million dollar project on questionable ground "big bathtub with no way to get rid of mud and water" doesn't have to follow any type of protocol?? dan ashton and whoever else was involved in pushing this thru should step down from their positions now. They may have buried a local company by not making sure their s**t was in order and followed proper procedures and he has the audacity to say he sleeps and wakes thinking about it?? Give me a break. Wonder if singla pays every year to keep permits on a condemned building or if those just get 'shortened but not circumvented' as well.....what a bunch of b.s.

[spacecadet]

Excuse me if you've missed my point - but I believe there are rules in place for Developers. That is the job of those that work on the second floor of City Hall. There is a reason why there are permits, stages and steps in place - so that people that know their job can take their time to make sure that all the ducks are in a row. I STILL don't get why construction of any kind was allowed if the sale was not FINAL? Yes, the City is open for business but we're certainly not giving it away! I don't care how large a bond was in place - it was not the Developer's land. Yet. And this so called "Developer" may have been a real smooth talker, but that doesn't or shouldn't give him any more rights than the average person who has to apply for a Permit with the City. We were already giving them a deal on Development Costs and taxes - what more should they get?

I'm sorry that I'm not wise in the ways of the world of construction and developing and knowing what bonds are in place. But I do know the difference between "right" and "wrong" and this has been all "wrong" from the start.

[hoot]

John Bowser, the project manager at Task Management charged with overseeing the project, said his company has placed a lien against the property along with 13 or 14 vendors, including consultants, contracted for the project. All told, $1.6 million in improvements have been completed and remain unpaid.

Gee, makes you glad the city have that $50k to fall back on , eh TB. ?

I still maintain the city was negligent in issuing ANY permits to someone who didn't own the darn property.

[Paul99]

The mistake being made here is even refering to this guy as a developer. I don't see a developer as much as I see an opportunist making money with other peoples money. European hockey tours? Oil and gas plays? Rent to own houses? For all the stuff that the media has presented about the guy, I havn't seen anything about previous building experience. Then again, maybe he has and there are just no lawsuits tied to them.

A plan was presented to the city, engineered drawings, 50k deposit on a land sale with an OK to commence earthworks only. Investors in place, funds advanced to contractors to commence. At that point in time, everything looks fairly straight forward. Some say the city should have done background checks on the guy. Why when it is not the practice and all of the above has taken place. Perhaps there is a lesson to be learned here but I honestly don't think there were any really significant errors made by the city here. At least not for crucifiction and suggesting resignations.

Land value is still being brought up. Why? Two appraisals were done. Are you people on these boards more qualified to determine land values than the professional appraiser or was he/she also corrupt? IMO, the person/people that should get spanked and will get spanked are the investors (Fraser ??). Those are the ones who failed in their due dilligence on who they were entering into a business deal with. That is not the city's responsibility unless they were committing funds to the project and I see no evidence of that. Shall we blame the city as well for not making sure Singla Construction had the funds in place to complete the eyesore on Winnepeg St on schedule even if it meant selling units at a loss? Should the sellers of that Winnepeg St land done financial checks on Singla to ensure they would complete the project? Every bankrupt project and every stalled project in Penticton, and there are a few of them, are all about financing. Shall we blame the original sellers of the lands for all of them? Of course not and in this hockey dorm situation, that is all the city was......a seller of the land.

Thats the problem right there, the city screwed up. Permits should be be granted to completion with deposits or not at all.

[Paul99]

What a load of crap. I cant go and buy a house without a credit check. Why can someone break ground without one and a measly 50 grand down for the city down on a multi million dollar project??? This council is incompetent.

[Static]

Who cares! %^&* the Pucks.

[Assumed]

Legal fees start now. Do we think that 50,000 will cover it? If the deposit of 50,000 is traced back to the parents, by the RCMP, will the City keep the money? Will the City legally be able to keep the deposit? The city let the construction go on, is there implied consent, in the eyes of the courts?

Lawyers love this stuff.

[Stellerjay]

You get what you voted for Penticton. I can't believe there are people out there willing to defend the local government's idiocy.

[twobits]

John Bowser, the project manager at Task Management charged with overseeing the project, said his company has placed a lien against the property along with 13 or 14 vendors, including consultants, contracted for the project. All told, $1.6 million in improvements have been completed and remain unpaid.

Gee, makes you glad the city have that $50k to fall back on , eh TB. ?

I still maintain the city was negligent in issuing ANY permits to someone who didn't own the darn property.

"The city’s lawyer Richard Thompson confirmed Tuesday that the city filed a “notice of interest” under the Builders’ Lien Act on the Eckhardt properties with the Land Title Office in November, which stipulates the land is not bound by liens unless the improvements in land are undertaken “at the express request of the owner.” Thompson added that “express” requests are narrowly defined in law as those in writing and requiring a contract between the land owner and lien claimant. Approving an earthworks permit would not qualify, he said."

What part of this do I have to explain to you hoot? The contractors should not have commenced work without an advance payment? Any contractor engaging in a project of this scope should do a simple $20 title search before commiting 1.6 million in work without an advance. That search would have shown him the property was unlienable without a contract directly with the owner......The City.

And the experienced construction manager says............
"Bowser said there are several people trying to resolve the matter, and he hopes that in a year, Penticton residents will have a good news story on their hands.

“Right now, the job is not proceeding, the money is not in place, the land hasn’t been bought, but the permits are ready to go. The construction manager and contractors have done their job and are ready to go, the city has done their job because we’ve worked with the city hand in hand to get this so the project can proceed consistent with the requirements of the building code and local planning authorities,” he said. “We haven’t circumvented any processes, we just shortened it and that was with the spirit of co-operation of both mayor and council, planning and permitting.

“There’s no skeletons here in the process. Everybody has performed except for one party.”"

I have no doubt you will carry on with your agenda of negativity and search for skeletons that just are not there. As the man clearly says, it comes down to one party and it is not the city. Try not to be too disappointed. On the plus side, you can add this experience to your "developer" resume. I'll just go have another hot supper.

[hoot]

The city has received a 50k non refundable deposit as well. I doubt very much this will collapse. And if it does, there would be many folks quite happy so what is the problem?

[ twobits February 3 2012)

Try telling that to the trades people…………

As for skeletons , you can check my posts , I have never suggested any under hand dealings in any of my posts . It is you that keeps bringing up the matter just as you appear bound to constantly keep referencing the prison in your posts.

Your attitude to this reminds me of the mother and her friend watching her son marching with his troop in a parade. The friend remarked don't the soldiers look smart in their uniforms and the mother replied , "yes they do , but it's a pity our Johnny (TB) is the only one in step.................."

[glassmaster]

I have never suggested any under hand dealings in any of my posts .

Glad that we cleared that up.