The B.C. Supreme Court has backed the District of Ucluelet’s right to downgrade zoning on land once promoted as a luxury resort with a Jack Nicklaus-designed golf course and a high-end subdivision, against the wishes of its Vancouver developer owner.
Onni Wyndansea Holdings Ltd. sought a judicial review of the district’s 2021 decision to change the zoning on 376 acres the company owns on the Ucluelet peninsula, north of the community of Ucluelet.
The district altered the zoning because the owner wanted to start developing the property years after the initial project had stalled and did not have updated plans for the entire site.
“Council was downzoning the subdivision to stop a development it believed was not in the best interests of the community and such a concern was reasonable,” Justice Lauren Blake said in an Oct. 26 decision. “The underlying rationale of this concern and ultimate decision is transparent, intelligible and justified.”
At this point, the property has not been developed and is largely in a natural state.
The court decision backing the 2021 rezoning means that any attempt by the owner to rezone for more intense development will have to go back to council for a decision.
Wyndansea has an 18-year history with the district.
In 2004, the previous owner requested a rezoning to allow development of a $650-million resort with a golf course, two hotels, large homes, vacation rentals and some multi-family housing.
The property had originally been zoned for rural residential use, which allowed for a minimum lot size of 25 acres (10 hectares). Two homes were permitted on one rural lot.
In 2005, at the request of the then-developer, council approved comprehensive development zoning for the property. The new zoning allowed the creation of 30 quarter-acre and half-acre strata lots in a subdivision — significantly smaller than what would be permitted under the previous rural residential zoning.
“Signature circle” zoning permitted a single-family house on each lot or a house that could be rented with a couple of suites, with the idea of opening up vacation rentals — a key feature in the tourism-oriented town.
Large homes were permitted on the strata lots. A lot of about half an acre would have allowed a two-storey house of about 8,000 square feet.
The comprehensive development zones also allowed for resort uses on larger lots.
The then-developer and district penned a master development agreement with the district and started developing the subdivision, installing infrastructure for services.
The subdivision also required improvements to Peninsula Road, which were registered in a covenant and needed sign-off from the Transportation Ministry.
But the lots didn’t sell and the project stalled.
In 2011, Ucluelet council approved a bylaw for its official community plan allowing it to amend the master development agreements for Wyndansea if development did not go ahead within five years.
The project owner filed for bankruptcy in 2014. It had close to 200 creditors and owed more than $100 million. Onni purchased Wyndansea in a court-ordered sale.
In the same year, Onni bought another failed Vancouver Island development property at Colwood Corners for $17.5 million. It had been promoted as a $1.2-billion mixed-use project.
In 2018, Onni held a public open house in Ucluelet, telling residents that the golf course-resort plan was not going ahead. Its concept plan indicated the site would be developed for residential and short-term rental use and would include a network of natural open space, trails and neighbourhood parks, Blake’s decision said.
The following year, Onni and the district began discussions about the property.
In March of last year, Onni made a formal request to the district to activate subdivision infrastructure services, such as streetlights, water and sewer, open road access and get approval to erect a real estate sign to market the strata lots.
But council said it wanted to see a comprehensive development plan for the entire site, something city hall saw as necessary before any lots could be sold, the decision said.
In August, Onni submitted 29 building-permit applications (one of the strata lots had previously been sold) but the applications were rejected, as they did not comply with planned new zoning, which was passed by council in September.
Under the latest zoning, the district returned the land to its original rural designation.
The subdivision lots remain in place, but only permit one single-family house of about 1,000 square feet and do not permit vacation rentals, a key feature of the previous zoning.
Robert Vrooman, vice-president of development for Onni Group, had urged council not to reinstate the previous rural zoning, saying it would substantially devalue the land.
Onni filed a petition in court in November 2021 seeking an order quashing the new bylaws, saying they were unreasonable, were passed for an improper purpose, or were passed in bad faith.
The company asked that the district be compelled to issue the 29 building permits, Blake said.
Ucluelet countered that it acted reasonably when faced with imminent development it did not support.
“The record is clear that council realized it was important to act promptly to ensure the bylaws were adopted before the lots in the subdivision were offered for sale,” the decision said.
Ucluelet’s mayor-elect Marilyn McEwan said she is pleased with the outcome but it’s too soon to comment further.
Vrooman said Onni is reviewing the judgment and will “decide on an appropriate action in due course.”
