The correct option is B There
Options A and B:
The given passage narrates events, so they are in the past.
'Here' has an opposite meaning to 'there'.
'Here' means 'in this place' and 'there' means 'in that place'.
The speaker does not mention in the passage that he/she is close to the 'gardeners', or the place where the gardeners were there before. Hence, the word 'here' is not suitable and option A is incorrect.
The speaker only narrates a scene, so the space where the gardeners are painting, will be called 'in that place'. Hence B is correct.
Option C: 'Their' is a possessive adjective that indicates an ownership or possession of something. The sentence does not refer to any ownership; it indicates a place. Hence C is incorrect.
Option D: Similarly, 'theirs' is a possessive pronoun and does not agree to the sentence.
So, option D is also incorrect.