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Shasta Mobile Home Park in Kelowna one step closer to being sold after lengthy court battle

Another mobile home park is up for potential redevelopment after a judge recently approved a sales process for lands, which are valued at millions of dollars.

In a court decision from April 10, 2024, the judge approved a sales process for the property located at 3745 Lakeshore Road.

<who>Photo credit: Google Maps

A variety of issues were addressed in this latest court proceeding, including the nature of the sale process and whether or not to engage with the city and seek any rezoning for the land in question.

Owned by the four sons of Lloyd and Marjorie Callahan, Douglas, Edward, Bruce and Robert, the lands are referred to as the “Crown Jewels” of properties owned by the family.

In the decision, the judge noted that the sons “received from their parents what should have been a legacy of financial security that could have been expected to extend into at least the next generation.”

However, while the property can be considered financially successful, “the extreme disaffection that has plagued the relationship between Edward ("Ted") Callahan on the one hand and his three brothers on the other has overshadowed that success.”

While the Lakeshore Road property has operated as a mobile home park for many years, according to court documents the sons are all in agreement that it “is not the most lucrative use of the lands, and that the lands have significant redevelopment potential.”

“It appears that the Lands are worth tens of millions of dollars and have sentimental value to all of the brothers.”

On Nov. 6, 2020, the shareholders resolved to appoint Ernst & Young as Liquidator, and Douglas, Bruce and Robert voted in favour of the resolutions appointing the Liquidator, while Ted—owner of development company, Argus Properties—voted against.

The liquidation was ruled against in January 2022, citing unfairness to Ted, but a court of appeal reversed the decision afterwards. In the appeal, it was ruled that the sale process would be fair, and would treat the brothers “equally as potential purchasers.”

While the three brothers supported a process where the liquidator, Ernst & Young, eliminate bids that don’t meet the criteria, but allow the four sons to be deemed Phase 2 Qualified Bidders.The liquidator would evaluate the competing bids in the second phase and recommend one of them for approval to the Court. That application was opposed by Ted.

Instead, he submitted that he should be appointed to manage the company or be given court authority to “gather de-risking information and engage with the city.”

There was also the question of whether or not to take steps to make the land, which encompasses 18.5-acres and multiple parcels, more appealing and valuable by rezoning and subdividing it.

The liquidator’s experts gave an analysis of that position, and said that redrawing lot lines before going to market would not achieve the “objective of achieving the highest possible price.”

They further suggested that the task should be left to the purchaser, as rezoning would be costly, and whoever ultimately ends up developing the land will have to negotiate the relocation and payout of existing tenants—which is “likely to be a complicated and drawn out process.”

“While many of the submissions advanced by Ted appear to have been grounded in the notion of fairness between him and his brothers, he also submits that more information generally will give buyers more certainty and will cause them to bid more,” the judge said in the decision.

They added that the land is expected to be sold for “tens of millions of dollars,” and the potential purchasers “will be sophisticated,” and will not require the company to gather information for them.

The most important issue that divided the brothers on the sale process, however, has been whether to go with a sealed bid process, as sought by Ted, or an auction, sought by the three other brothers. A sealed bid is ultimately the process the judge approved.

It is unknown when the sale process will begin for the Shasta Mobile Home Park.

Last year, another mobile home park in West Kelowna hit the market at over $7 million. The 6.25-acre property, located near Okanagan Lake just west of Kalamoir Regional Park, included 38 mobile home pads and the potential to add more.

It was said at the time that whoever ended up buying it would most likely not want to continue operation of the mobile home park due to its development potential.

Another West Kelowna property, Shady Acres Mobile Home Park, was also sold but in January 2024 the City paused rezoning on it to provide more time to relocate existing tenants.

In an emotional public hearing, many voiced great concern about a lack of housing options or a lack of assistance in finding a new home. Kerr Properties had a relocation assistance program in place for homeowners and renters.

Previous staff reports have said that many of the tenants are lower income, on disability assistance or fixed pensions.

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