Converting these Okanagan homes to industrial land could pay big dividends

A mixed industrial/residential neighbourhood that has been in trouble with the City of Kelowna is on its way to becoming valuable industrial land.

There is such a demand for industrial land in the city that it’s nearing $3 million an acre in value, MCL Real Estate Group director Kris McLaughlin told iNFOnews.ca earlier this month.

That’s more than double what the 20 acres over 11 lots, mostly with single-family homes and some illegal industrial uses, is assessed at by B.C. Assessments.

READ MORE: Multi-family, industrial real estate booming in Kelowna despite rising mortgage rates

On Monday, June 27, rezoning applications for the 11 lots will go before Kelowna city council but it’s just the start of what is likely to be a much larger industrial development north of Sexsmith Road and straddling Academy Way in the city’s northern end.

“The area has complex road and utility challenges that necessitates a comprehensive and coordinated solution,” says a report going to council. “The cost for off-site requirements for the area properties is estimated to be in excess of three million dollars, which is more than one property owner is likely to be able to manage.”

That area of the city was first designated for industrial use in 2012 but rezoning applications have been refused in the past because of the servicing issues, such as the need to hook up to city water and sewer lines.

There’s also a pipeline running through the properties.

There have been bylaw violations in the past for light industrial uses and storage on a number of properties that are currently zoned agricultural, although they’re not in the Agricultural Land Reserve.

Each of the 11 properties is 1.75 to 2.01 acres in size, according to B.C. Assessments, for a total of 20 acres.

Each is assessed at $1.3 to $1.6 million, for a total of $16, or less than $1 million per acre and far less than the $3 million an acre industrial land is approaching in value.

The property owners banded together and formed a company to jointly pay to service the sites.

This is just a small portion of the possible industrial development in that area as there are about 20 other lots there that could be rezoned in the future, as long as they pay latecomer fees to reimburse the current owners for the cost of water, sewer and roads.

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