The following screen grab from a front page story in the local Daily raises a most interesting question about just what kind of a hotel deal our city fathers have singed onto.
In the beginning of the downtown revitalization saga previous councils and city managers undertook to build a convention centre complete with five star hotel for the low, low price of only $52 million which was approved by a narrow margin in a very divisive referendum. Those city managers were unable to deliver and in the end the taxpayer wound up paying at least $75 million for a convention centre, without a hotel. This was in spite of the fact that our city managers paid $3 million to a company to see the project was completed as per the original agreement. Of course they did not , and we did not recover our $3million either, and now neither of the senior managers work for the city. Both taking early retirement complete with 'parting gifts' most of us can only imagine.
Fast forward to the current council under the guidance of Mayor Ruttan who figured the only way to attract a hotel to the site, which would skyrocket our ailing convention business was to offer a ten year tax exemption to any company willing to build a hotel downtown. At first this offer applied only to the property adjacent the convention centre, but later was applied city-wide.
We have been told by the hotel developers they will bring 70,000 tourists to Nanaimo as they are connected with a very successful travel company in Asia. If accurate this will mean on average of nearly 200 tourists each and every day of the year.
When the deal was finally agreed to by the city which includes using parking spaces at the VICC as the hotel is building none of their own, and having first refusal to operate the VICC when the contract with the current operator expires, they also have in their agreement the right to stratify the entire hotel. What impact that will have on availability of extra rooms to help bolster our conference business is debatable.
The following taken from the front page of the Daily News on March 21 raises the question of just what the developer has planned for this hotel. Note the sentence marked with the arrow.
How Does This Hotel Help Our Convention Business?
In the beginning, the pretext for offering a ten year tax exemption to get someone to build a hotel adjacent the conference centre, was to allow us to attract bigger and better conventions to Nanaimo. That was the purpose of offering to give up some $10,000,000 in tax revenue.
How does this hotel fill that purpose if they will be bringing 70,000 tourists per year to their hotel. Just how many rooms will be available to help our lagging conference business? How many of these units are going to be sold off as 'residential' units?
The new hotel downtown (presuming it gets built) will no doubt be a big step forward for downtown, however, whether it meets the intended purpose of increasing our convention capacity seems doubtful. Which raises the question of whether we needed to give away ten million tax dollars?
It was my understanding that the Hotel owners were offered the option to manage the VICC, and turned it down. The only thing the hotel owners want is the parking space.
ReplyDeleteIt was included in the final contract that when the current contractors agreement expires, the hotelier will have first shot at the management contract. Why wouldn't they, the city pays over a million a year to run the place.
ReplyDeleteAs the business model was presented to us, many months ago, we must understand that the hotel developers will not depend on the conference centre as a pillar of its success. Nor does it depend on the viability of our downtown. This is the correct approach if one wants a sustainable development. In return, we should understand that the hotel will contribute little to the viability of the conference centre or our downtown. This is both a function of the business model and the hotel location. To think otherwise, is to be misled or just foolish.
ReplyDeleteThat said, were we foolish to grant this business a tax exemption? That's hard to say. While the community gains little from the development, we do get an undeveloped site developed. In an economy such as ours we may have to accept that as progress.