By Dominic Abassi

Nanaimo Council to sell downtown lot to US company pitching $23M hotel

Jun 19, 2017 | 9:46 PM

NANAIMO — There’s new hope in the long struggle to get a hotel built across the street from Nanaimo’s downtown conference centre.

At Monday night’s public meeting, mayor Bill McKay announced council gave approval in principle to the sale of the lot at 100 Gordon St. to a Utah-based company during an in-camera meeting earlier Monday.

PEG Developments intends to build a $23 million hotel to be completed by early 2019, according to City of Nanaimo manager of real estate Bill Corsan.

The $750,000 sale price for the lot represents a $185,000 increase compared to what a Chinese company paid for it in 2013.

Council directed staff to put out an open call for offers for the 0.4 acre lot in December, 2016. Six offers came in before the closing date in late January, 2017.

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Corsan said council met with five of the proponents between April and May before settling on PEG’s proposal.

McKay told NanaimoNewsNOW the experience of PEG made them Council’s preferred option.

“It’s not the grand, 25-storey building down there but it’s certainly going to be a much welcomed addition to our hotel inventory…To have a competent operator, with a competent brand out front of that conference centre, as was originally intended,” McKay said.

PEG is proposing a six-storey hotel with 118 rooms under the Courtyard by Marriot banner. The company’s first foray into Canada, a hotel on city-owned land in Prince George, is underway now.

Corsan said while the developer is excited to work with the Vancouver Island Conference Centre (VICC), the proposed hotel would not be attached by a walkway.

A 2016 consultants report studying the VICC and the feasibility of a hotel next door found the Nanaimo market could sustain a hotel with up to 150 rooms. Corsan said the report found while the new hotel would add some delegate days per year, it likely wouldn’t have a substantial impact on the VICC subsidy provided by the City.

McKay said the proposal is a “sign of confidence” in the future of the conference centre.

“It’s been a slow build, disappointing results for the first few years. One would hope this additional hotel inventory is going to add certain capacity to that conference centre that they can hold bigger conferences,” he said.

In answer to questions about the time elapsed between the January deadline for offers and Monday’s announcement, McKay cited challenges setting up meetings with proponents.

In 2013, Chinese travel agent SSS Manhao proposed a 21-storey, $50 million hotel. The city sold the property to Manhao for $565,000 in November 2013. However, several construction deadlines were missed and Council denied a request for an extension. Eventually staff were directed to buy back the property for the same price in July 2015.

In 2009, Millenium Development Corp., the same company behind Vancouver’s troubled 2010 Olympic village project, was forced to pull the plug on their proposed hotel due to a lack of financing.

Corsan expected the sale to be back in front of Council in July.

dom@nanaimonewsnow.com

On Twitter: @domabassi