Developer behind paid supporters at public hearing threatens legal action after Kelowna council pulls permit - Action News
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British Columbia

Developer behind paid supporters at public hearing threatens legal action after Kelowna council pulls permit

Appelt Properties says it didn't break any rules after a public relations company it hired reimbursed the expenses of public supporters of its proposed 25-storey tower in the heart of downtown.

Appelt Properties says it didn't break any rules hiring a PR company that reimbursed public supporters

A man walks by a building with ivy on its pillars and the name 'City of Kelowna' over the entrance on a sunny day. The building is bordered by a flower bed with red pansies and a dark green lawn.
Kelowna city council voted unanimously Monday to rescind a development permit from Appelt Properties after learning people who spoke in favour of the project at a public hearing were paid by a third-party public relations company hired by Appelt. (Tom Popyk/CBC)

A developer is threatening legal action against the City of Kelowna aftercouncil revoked a variance permit for a 25-storey tower in the heart of downtown.

Council voted unanimously Monday to pull the permit for the proposed project at350 Doyle Avenue from Appelt Properties over what a city staff report has called a "tainted process." The report is referring to $250 payments made by a public relations company hired by Appeltto students who spoke in favour of the project to council last year.

Greg Appelt, president of Appelt Properties, told CBC in a written statement that his company will be exploring legal options in the wake of council's decision.

"For the students who spoke up in favour of increased housing options, this is a slap in the face and a clear message that their voices are not given the same weight by council as those of well-funded, well-organized opposition campaigns," said Appelt.

The city owns the .35 hectaresite where Appelt plannedto construct236 long-term rentals and 26 below-market rentals.Council considered a development permit and development variance permit for the site at ahearing onJuly 26, 2022, where two dozen members of the public spoke.

A vacant lot surrounded by chain link fence on a sunny day. The lot is covered in long, brown grass and the sides of other buildings are visible behind it. Two cars are parked on the street in front of the lot, one is a white family sedan and the other is a beige pick-up truck.
The property at the centre of the controversy at 350 Doyle Avenue was a former RCMP detachment in the heart of the city's downtown core located near a public library and city hall. (Google Maps)

According to a report to council presented Monday, the city began to receive tips in Octoberthat some of those public attendees were paid byJDH Naturals, a company that does not have a Kelownabusiness licence and was being paid by Appelt.

"Paying people to speak when this is not known undermines the process that is the heart of what a public hearing or development application meeting is about," city clerk Stephen Fleming told the council meeting.

The city's report says that at the2022 summer meeting, roughly half the attendees referenced the need for affordable housing, including a principal employee of JDH Naturals.

The report recommended rescinding the permits, which council did,sayingit will allow AppeltProperties to reapply.

Appelt spoke to council virtually Monday and called the payments per diem reimbursements for students who missed work or paid for travel to make the July meeting.

"This did not break any rules, policies or laws," said Appelt. "Can we really pretend that some students receiving a $250 dollar per diem for speaking about the need for rental housing taints this process?"

The clock is also ticking on the project because, under the current lease agreement between the city and the company, construction has to start by January. But the city says it will extend that construction start date by a year if Appelt reapplies.

Former Kelownacity manager Ron Mattiussispent 11 years in the role and said he has seen a lot of orchestrated crowds at public hearings, but proof was never presented that people had been paid.

"It is unprecedented. It's a situation where, unfortunately, some members of council felt that this was somewhat untoward, and I totally understand," said Mattiussi.

There is no clear guidance for such a situation in the province'sMunicipal Act or Local Government Act or in the local Kelowna city bylaws on public hearings.

A city spokesperson said as of late Wednesday afternoon, no legal challenge to council's decision hadbeen filed.

With files from Brady Strachan