It’s official – the City of Nanaimo will sign over its downtown lot to a development company proposing to build a $23-million Marriott hotel.
Nanaimo council unanimously agreed to sell 100 Gordon St. behind the Vancouver Island Conference Centre to U.S.-based PEG Development, which plans to build a 118-room Courtyard by Marriott hotel.
The site will be sold for $750,000 with conditions such as approval for a development permit and the hotel revitalization tax exemption program, a 10-year tax break.
PEG Development will sign an agreement that allows the city to buy back the property for the same price it’s sold at if the developer does not spent a million dollars on physical improvements to the land within two years after the closing date.
Council had previously announced in June a decision to give approval in principle to sell the land to PEG Development. The city issued a request for offers for its land last year, asking proponents to give background information on proposed projects, timing and the price they would pay for the property, according to a city report.
There were six responses, including luxury hotel and residential proposals.
Coun. Bill Bestwick complimented the exercise the city undertook.
“It proved to be very beneficial to us and I think that maybe a process that we may wish to consider for future initiatives and endeavours,” he said, adding he’s delighted to see the city moving forward on development on 100 Gordon Street.
Mayor Bill McKay said it’s interesting conditions in Nanaimo have changed significantly and that the revenue per room has gone up “probably 25-30 per cent” in the last two years.
“Two years ago, the Marriott group was recommending that we not build a hotel at this time because of the low revenue available per room and our occupancy rates and in fact the last couple of years they’ve gone up to such a level that this particular corporation can now see their way clear to building this project,” he said. “Not as lavish as what we had originally anticipated for the site, but a good, reasonable product for that site. I commend them for that.”
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