By Dominic Abassi

Downtown Nanaimo hotel proposal approved for $2M tax exemption

Apr 4, 2017 | 12:37 PM

NANAIMO — A proposed hotel project in downtown Nanaimo will be exempt from municipal taxes for 10 years.

Council has approved the roughly $15 million Front St. project for the exemption under a City program designed to spur new hotel and motel investment.

The owners of the land at 15 Front St., beside the Globe Hotel, are Vancouver residents with active businesses in China, according to Tom Moore, a representative for the owners and the architect behind the project.

“They’re very excited about the potential for Nanaimo, particularly with its adjacency with Vancouver. They think Nanaimo has quite an excellent prospect for the future and this is their first step in developing a property on the island,” Moore said.

Under the 10-year tax exemption, the City will forego a little more than $200,000 per year. Terms of the agreement mandate the hotel be operating by July 2020.

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“The premise is that by encouraging new hoteliers or investment in the hotel stock, we’ll see more people come to town, more spin-off effects for restaurants and tourism products,” the City’s real estate manager Bill Corsan said.

Moore said the six storey, 89-room building will have commercial space on the ground level. The City has approved a development permit and Moore said the plan is to have the hotel open for business by summer 2018. He said at this point there will be no branding of the hotel and it will be privately operated.

“We were asked to use a mid-range hotel brand as a model for the amenity level and room designs for the hotel. It’s not trying to be a Delta or a Hilton, it’s more in the range of what you would expect for a brand new build Best Western or Holiday Inn Express.”

Nanaimo has a history of proposed downtown hotel projects failing to become reality. Two separate proponents failed to follow through on plans for a hotel at 100 Gordon St. to compliment the Vancouver Island Conference Centre (VICC).

Two other hotels have been pitched for downtown Nanaimo in recent years: a 30-storey Hilton also on Front St., which has secured rezoning, and an $80 million redevelopment of the existing Howard Johnson on Terminal Ave. That concept also featured a 5,000 seat arena.

Corsan said he is not aware of any progress on either of those projects.

Moore said the owners are encouraged by the occupancy rates in the city and are very committed.

“Obviously the city has had a long-term interest in trying to provide first rate accommodation…as it pertains to the conference centre,” Moore said. “There have been some pretty lofty ideas for hotels in the past…this is modest but a very important first step in getting some quality accommodation in the downtown.”

A September 2016 consultants report commissioned by the City studied the VICC and the feasibility of a hotel. Among the report’s findings, it stated there is demand for at least a 150-room hotel in the downtown core. The report also found the VICC had lost 18 events over the last five years due to a lack of “quality hotel rooms within walking distance.”

The Front St. project is the second proposal to be accepted into the tax exemption program since it was adopted in 2011. SSS Manhao’s $50 million concept for Gordon St. was accepted but never got off the ground.

dominic.abassi@jpbg.ca

On Twitter: @domabassi