A render of what the downtown Nanaimo Gordon St. hotel could look like once it's open.

By Spencer Sterritt

downtown hotel

Construction of Gordon St. hotel delayed, December 2020 opening ‘a possibility’

Jul 23, 2019 | 10:28 AM

NANAIMO — The window is quickly closing for a downtown Nanaimo hotel project to finish in time to receive a significant tax break.

McKay Quinn, development manager with hotel developer PEG Companies, said construction at 100 Gordon St. across from the Vancouver Island Conference Centre is slated to begin in fall 2019 with no exact date determined .

Work on the 172-room hotel was first expected to start in May, 2019 after a building permit was issued in late February. Construction was then anticipated to begin in June, July and finally August before Quinn made his statement saying fall 2019 was the vague construction start date.

“It’s a balancing act to manage pricing, funding and closing of all these pieces,” Quinn said. “It has delayed longer than we would have hoped but we are moving forward.”

There is an added time constraint on the project in the form of a 10-year tax exemption approved by the City of Nanaimo.

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The exemption means PEG Companies will not pay roughly $4.5 million in municipal taxes for the first 10 years of operation.

However, to reap the benefits of the exemption the hotel must be open by December 2020.

Bill Corsan, director of community development with the City, said construction would have to be complete for an occupancy certificate to be issued and the hotel considered open.

If shovels are in the ground by September, 2019, PEG Companies will have just 16 months to build a nine-storey, 172-room Courtyard by Marriott hotel costing roughly $22 million.

A PEG representative in November, 2017 told Nanaimo councillors “without a tax incentive, this project would not have got done.”

PEG was asked specifically if the company believed the Gordon St. hotel would be open in time to qualify for the 10-year tax exemption.

“It’s certainly possible, but we will evaluate once we are under construction,” Quinn said.

Despite the setbacks, promises of construction and a building permit is the furthest the site has come towards having an actual hotel at 100 Gordon St.

Several unsuccessful proposals have come before Nanaimo council since the conference centre opened in 2008.

An adjacent hotel was a key pillar in the original business plan of the centre. A City-commissioned study found a lack of “quality” hotel rooms led to lost business for the conference centre.

spencer@nanaimonewsnow.com

On Twitter: @spencer_sterrit