Former Rexall site. (Google)

Former Rexall site. (Google)

Kelowna strip malls look to residential growth

Property owners adapt to changing shopping habits

Shopping centres in Kelowna are evolving into residential housing development options for property owners in the city.

And the city planning department couldn’t be happier.

While the Capri Mall residential redevelopment plan has been in the works for some time, this year has seen new proposals on existing retail strip mall sites.

Construction is underway for a commercial/residential development at the Willow Park shopping centre parking lot in Rutland. A new condo development is also under construction on the former Rexall Drugs site location (now a Dollarama store) in Rutland and last week, a 466-unit apartment/townhome proposal was unveiled for Dilworth Centre with retail and amenity space.

Ryan Smith, the city’s director of planning and development services, said the renewed residential interest in shopping centre land is a win-win for the city. However, any projects still need to meet the city staff and council review criteria.

“Sometimes with these things, the devil is in the details but those will all come out in the staff review,” he said.

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In the bigger picture, Smith says these projects encourage higher density residential growth in established areas generally near major traffic and transit route arteries and address the city’s need to provide opportunities for people to live, work and play in the same neighbourhood.

“Where condos are currently being proposed (Dilworth Centre), it is four or five minutes from the rail trail, bus routes are less than 100 metres away to access, and it works for retail property owners looking to make up for the loss of retail leasing space revenue,” Smith said.

“If the city is going to start to alleviate some of our traffic problems, these are the kind of viable developments that can start to make that happen.

“We are not naive as planners that this will mean all people will get rid of their cars. But the transition of development is moving toward placing less reliance on owning a car, so it does help reduce the need for people to drive, which is a positive.”

Smith said the emergence of reassessing shopping centre land for residential potential results from several factors: more people shopping online, the impact of COVID-19 such as more people working at home, and retail rental space not being as profitable as it once was.

“That retail stream of revenue has been interrupted and these shopping centre landowners are looking at alternative ways to generate income into the future,” Smith said.

He noted city planners always ask when retail development proposals come forward near major existing density or main traffic artery areas if there is any interest to include a residential component.

Smith calls it basic planning fundamentals of high-density residential development in turn feeding business service opportunities for population urban centres, reducing the need to travel beyond pedestrian access for lifestyle options from shopping to dining out to recreational pursuits.

While including rental options, Smith acknowledged these new residential proposals won’t in themselves necessarily offer affordable housing solutions. Still, the movement of people will create a chain reaction for the potential availability of other rental stock inventory options.

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“If people move up to a different layer of rental housing, that frees up space for the older rental options that may not exist at the moment.”

He said property developers must also find a balance between available parking for commercial entities and surrendering some of that space for residential development.

“As private property owners, that is something they have to sort out and manage.”

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