Sunday, November 09, 2008



This state of the art facility is a center Nanaimo can be proud of but is currently having difficulty booking conventions of the maximum size it can handle. One reason given for the problem booking larger conventions is the lack of downtown hotel space adjacent the Convention Center. Competition from other cities with their convention centers must also play a role.

Whether the addition of the proposed 176 room hotel would actually solve this problem is a question needing addressing by City Council. In fact the viability of the convention business is one being questioned not only in Nanaimo but also in Vancouver.

This project was divisive in the community from the beginning with a slim majority of voters actually favoring the project. Those in favor have seen the PNC as the heart of downtown revitalization with Mayor Gary Korpan being four square behind the project from the beginning.

Those opposed to the project questioned whether the convention 'business' was the industry we should pin our hopes to in our attempts to bring life a dead downtown core.

Only time is going to tell which camp, if either, is correct but in the meantime the City taxpayers have a $72 million brand new building downtown and we need to make the best use of it.


The hotel adjacent the PNC was to have been started in January of 2007 by the developer Millennium Corp. After deciding the first planned hotel with condominiums was going to be too expensive for the Nanaimo market a new agreement was reached with this developer.

Part of this new agreement included selling the hotel site land to the developer for $10 and further giving the developer prime land adjacent Maffeo Sutton Park on the site of the old Civic arena and Foundry. Any of this land is to revert to the City if the developer fails to meet their commitment to build the hotel. No details have been made public as to the cost to the City if it becomes necessary to transfer this land back.

Any penalties etc. to be paid by Millennium can only be collected by the City if in fact the Corporation is actually solvent.

Under the new agreement the hotel is to be complete by June 2010 and the footings were to have been poured by May 31. That deadline came and went and we were assured by the City that all was well and that geo-tech studies just needed completing. City point man Jeet Manhas is quoted in the local paper as saying "we're in contact with Millenium every day and we're satisfied they are showing progress".

In an eleventh hour move the developer submitted some type of plans (which are described as being preliminary) along with an application for a development permit. A skeptical mind might think they are simply stalling for more time as there is no reason for Millennium to want to walk away from this deal. They have nothing to lose by continuing to stall and drag out the start of construction for as long as the City will tolerate it.

I have never heard anyone discuss how long it would take for the land on which the hotel was to be built to revert to the City should Millennium just walk away from the deal.

It has been said by Councillor Holdom that Millennium offered the best deal to the City compared to other interested parties. However, a deal that never materializes is hardly a deal at all.


About 15,000 square feet of what should be prime retail space in the PNC was sold by the City to First Capital Realty for $3.78 million.

At a recent all candidates meeting incumbent Mayor Gary Korpan said there was pressure on the Council of the day to sell this property rather than retain ownership and benefit from long term rental revenue.

It is recently reported that the purchaser to date put $350,000 down on this property with another $1.13 million becoming due this week and the balance of $2.3 million coming due Aug. 11/2010 or when the space is 85% leased. As of Nov. 7 interest becomes payable on the final amount owing @ 4.5% interest. These seem like generous terms.

Currently none of this retail space has been leased.


While certainly not the only person responsible for dealing with Millennium, Councillor Jeet Manhas has been out front as the 'man' who brought the PNC project to completion 'on time and on budget'. He is also the man who keeps assuring the public that all is well with Millennium and that he has every confidence they will complete the hotel.

Councillor Manhas is not seeking re-election during the current Civic Election instead will be seeking election as a Liberal in the upcoming Provincial election.


Follows are the responses from Candidates to the question "Should a new contractor be sought for the PNC Hotel project? If not at the present time, how much more time should Millennium be given to actually begin construction?"

This question was sent to all Candidates in the upcoming Civic Election, all candidates who responded are listed below.

Brunie Brunie

A new contractor should not be sought yet. These are unsettled times to be starting a new project.It would be prudent to at least wait until the spring of 2009.

Ron Bolin

If, as I currently believe to be true, upon receipt of the agreed 30 day notice, our "partners" do not perform or substantially demonstrate the ability to perform, we should recover the title to the hotel land, withdraw the option on the Foundry/Arena land, demand the fees, costs and charges due us and reconsider our options. It is, I believe, very unlikely that anyone would make a credible bid for the hotel in the current economic circumstances and we will need to determine what actions could be taken to maximize the return on our investment or more likely to minimize our losses. Part of this will rest on the details of our agreement with Atlific and whether there is any flexibility regarding the current operation of the centre.

Bill Bestwick

A complete and thorough re-examination of the PNC Hotel Agreement and the implications of exercising the 30 day "cure" or notice to Millenium must be of the highest priority for the new Council.

If Millenium proceeds as indicated to reach completion by June of 2010, conditions of consequence must be included and enforcable to enact financial security for delays in opening. The only way in my opinion to "turn up the heat" on Millenium is to enforce financial penalty.

If Millenium is not prepared to enter a revised agreement with such conditions, then sever the agreement and commence the process to find a new Hotel partner.

Rob Campbell

Millennium Contracting should be held accountable for these delays. We should never have entered into this venture to begin with, but that's water under the bridge. For the conference center to be successful we need a hotel to put the whole package together, saying that I think we should accept new proposals from other outfits. I have heard but I am not certain that there is financial damages Millennium should be paying the city back, if that is so we should demand it immediately. The City should never have given up park space for condos old Pete Maffeo would be rolling in his grave.

Blake McGuffie

I would cancel this agreement as soon as legally possible, and then seek new potential developers. I am aware potential developers are ready to step forward.

Angela Negrin

That is it! Cut the cord, we are done! This land is way to valuable! This space has so much potential. The city has made a poor decision and I don't the taxpayers to suffer anymore, or sign anymore deals with these people.

Fred Pattje

We already have had two major amendments to the hotel portion of the PNC partnering agreement and my patience is wearing very thin.

Since it, under current economic circumstances, is unlikely that another partner would come forward, I believe it to be expedient for the next Council to revisit this one more and final time, set realistic deadlines for Millennium and, for once, stick with those new timelines!

After that it is " three strikes and you are out!" , using the 30 days notice, getting all our lands back and recuperate the costs incurred!

Bill Holdom

The City has been open to other proposals for building the PNC hotel ever since Millenium/Suro started missing deadlines, and other parties have expressed interest. However, their timelines and required City incentives have generally exceeded those Millenium agreed to, so to date there has been no compelling reason to consider switching to a new contractor.

It’s tough to say how much more time we should give Millenium. We should of course be sensitive to current economic uncertainty and financing difficulties that would affect any contractor, but we can accept delays for only so long. I would want to begin the process of terminating the agreement if work on foundations has not begun by December 2008. Obviously, I would feel much stronger about doing that if the City had another contractor waiting in the wings who could start work more quickly.

Jim Kipp

Considering a few of the current economic conditions it is the most fiscally responsible move. Raising capital for any company currently is a daunting task and I understand Millennium is stretched with Olympic commitments. Also with values going down, a more competitive market could lead to a better price or a commitment to perform.

Use the last step written notice, with shortest response time, which I believe to be 30 days and default the contract, recover all land and any and all financial amounts owed.

Ted Greves

Once the process described below has run its course with no satisfaction, there should be (if there already isn’t) an open competition for a new contractor. It has gone on too long. Construction has to start now. Unfortunately, I doubt given the economic times that anyone would be found to construct the building unless they are given incentives to proceed like Millennium/Suro was given. I believe the City is in a no-win situation.

The Partnering Agreement with Millennium/Suro (M/S) was terminated as of January 15/2007. They have been given three extensions because of delays in securing financing. Construction was to start January 31/08. The footings for the hotel were to start on May 31/08 and they did not. To show good faith about a year ago M/S gave a deposit of $450,000 to the city if construction did not start on schedule. It hasn’t.

M/S has now applied for a development permit approval by Council and the council meeting for November the 10th has been cancelled. The next Council Meeting is November the 24th and if the approval is given at that meeting the process continues. Once all the permit processes are complete, I believe they should be given 90 days to start construction.

James Guy Younger

I believe the deal is dead, or down to the last few gasps for air. I don`t think anyone else will want to build a hotel there with the current economic uncertenty. That is the real concern. I would love to be wrong on this as we need a hotel on that spot.

Larry Iwaskow

Meet the contract or settle up. Utilize for public use or sell for market value.

Jack Arnold

1.After the news announcement that the Millenium group has a "special deal" with the Vancouver City council....(it was on global News at 6:00 this A.M.) let's just say goodby to these people.

It is clear what their track record has been and will likely be here... does this mean they are going to play default default help and please loan us a big chunk...not if I am involved.

Bill Forbes

We should terminate the existing agreement with the current developer; get our land back and the land at Maffeo Sutton Park first. We should then discover through research if a hotel is needed and/or feasible. If it is then we can look for a new developer and make it clear that there is no land for condominiums and no $10.00 parcels for sale for hotels.

Loyd Sherry

The new Council need to review the current partnering agreement and decide based on all information available. To cancel and call a request for proposal on a new developer or extend the current partnership.


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