The City of Kamloops says it expects to recover most of the nearly $10 million it spent to buy and demolish the former Northbridge Hotel at 377 Tranquille Road.
The City bought the hotel property for $7.1 million in October 2021, with plans to redevelop the building into market housing. Also included in that deal was the adjacent property at 346 Campbell Avenue, which was sold to BC Housing for $3.8 million.
It them spent around $2.6 million on demolishing the Northbridge building – with that work currently underway – meaning the City is currently on the hook for about $6 million in total costs, following the sale to BC Housing.
“When we bought the property back in 2021, we knew that full recovery would not be likely,” David Freeman, the City of Kamloops Real Estate Manager told Radio NL.
“We were buying an existing income producing property and it was our intention to knock if down. We had a number of other social issues we wanted to address, and we also wanted to contribute to the revitalization of the Tranquille Corridor.”
At this time, it is not clear how much of the roughly $6 million in outstanding costs Kamloops expects it could recover.
The City is not selling the site as the provincial government added the property to its BC Builds database in late April. The $3-billion program aims to create new housing units on land owned by government, communities, and non-profits with tenants paying no more than 30-per cent of their income in rent.
“The land and the demolition costs are certainly going to be factored in when we start looking at the proposals and the development proforma,” Freeman added. “Our expectation is there will be some recovery of that cost, but we will be looking at every option available to us to recover some of those costs for the taxpayer.”
Freeman told Radio NL the City is looking to partner with a developer to build a four to six storey mixed-use building with 65 to 75 units as well as ground floor commercial space will rise at the site of the former Northbridge Hotel by 2026.
Once complete, the new building will be subdivided into two airspace parcels with the chosen developer and the City – though the Kamloops Community Land Trust – each holding one parcel as an income-producing rental property. Those two organizations will also be sole members of the strata.
“We wanted to see if we could bring our private sector partners in as more of a partner to have their expertise in the development and construction, bringing the right unit mix, the materials to ensure its the best value for the tax dollars,” Freeman said.
“We felt the way to motivate that would be to say you’re a partner in this in the true sense of the word that at the end of the day, you’ll get a percentage of the units in the building and there’ll be mortgages, construction financing, take out financing on the mortgages but you’ll have a cash flow coming out of that and the Community Land Trust will have a cash flow coming out of their half of the building.”
While design work is yet to take place, Freeman said the City envisions the new building on Tranquille Road will be similar to the six-storey, 80-unit affordable housing building that BC Housing is planning to build on the Campbell Avenue site.
In a statement, BC Housing told Radio NL it expects to demolish the existing building on the Campbell Avenue property this summer, with construction expected to building to begin “shortly after demolition.”
“BC Housing has worked closely with ASK Wellness Society and the City of Kamloops to select 346 Campbell Ave. as the suitable location for affordable housing for low- to moderate-income families and seniors,” the statement said. “Design work and tendering for the new 80-unit Confluence building is complete.”
Freeman meanwhile said the City is hoping to have its developer partner chosen by early Fall, with construction potentially getting underway in the spring of next year.
“The Kamloops Community Land Trust has the ability to partner directly with the development community. We have an evaluation selection process and then hopefully we’re able to award a conditional letter of commitment in late summer, early fall,” Freeman said.
“Within the next two months, they look at the criteria and have a number of conversations back and forth on what that partnership could look like.”