City to entice hotel developers through tax exemptions

Nanaimo wants more and better quality hotel rooms near the Vancouver Island Conference Centre.

In an effort to build more and better quality hotel rooms near the Vancouver Island Conference Centre, Nanaimo council passed a tax exemption directed at potential developers Monday.

The 10-year tax exemption would kick in on any new hotel project. It would include only the city portion of taxes collected and would not affect the current tax base.

Nanaimo Mayor John Ruttan said the VICC, which is being subsidized for $1 million annually by Nanaimo taxpayers, is hindered by a lack of quality hotel rooms in the downtown area.

It isn’t operating anywhere close to it’s full potential and as a result, isn’t able to generate the revenue needed to make a substantial profit, he said.

“We have 400 quality rooms in the downtown area with conference quality within one kilometre. The VICC can seat 1,300 people and feed 950 at a sitting and yet with only 400 rooms, we’re limiting the size of conventions that we could attract,” said Ruttan. “People who organize these conferences have one basic question and that is ‘how far are the hotels to the conference centre?’ and without one right there, and without enough rooms available, those organizers respectfully decline.”

Ian Howat, director of strategic relationships for the city, said while a hotel attached to the convention centre is the key target, the exemption will apply to any property zoned for a hotel.

“The intent of the bylaw is to encourage an increase in the quality of hotel rooms in Nanaimo, not necessarily increase the quantity,” said Howat. “Of course, we would like to see a hotel at the conference centre and that is definitely one of the reasons for doing this. When we considered the hotel for the conference centre we felt it was also necessary to offer it to all of the hotel-zoned properties in the city of Nanaimo.”

Howat added that potential developers have indicated a tax incentive would be welcome.

“There has been renewed interest but it remains to be seen whether this bears fruit,” he said.

It’s estimated a developer could save as much as $1 million annually in municipal taxes on a $40-million hotel.

In the city’s ill-fated deal with Millennium/Suro, contracted by Nanaimo’s previous council, land at Maffeo Sutton Park was included for developers to build condo units as incentive. Council recently voided that offer, forcing city hall to find another way to entice developers.

“I think by going ahead with this, we’re demonstrating flexibility,” said Ruttan. “We’re trying to say to the developers that we are prepared to look at options to get it built. Options that I think are financially viable to a builder in my opinion.”

The bylaw only addresses new hotel construction, as well as demolition and reconstruction on hotel-zone properties. It is likely, however, an amendment will be brought forward for council’s consideration to provide an exemption for hotels that undergo major renovations to bring their room quality up to higher standards.

Howat said “more challenging discussion’ will have to take place with the hotel industry before that can happen.

Just Posted

Nanaimo Marine Festival honouring tubbing’s ‘mom’

Longtime volunteer Margaret Johnson depicted on souvenir coins and named parade marshal

Nanaimo city council issues permit for Third Street ‘gateway’ development

181 residential units plus commercial space to be built on site of former Armishaw farm

Youth seen with gun at Nanaimo mall, suspect now in custody

Woodgrove Centre was shut down during police incident Monday

Local artist explores Nanaimo’s old Chinatown in new video installation

Charlotte Zhang among eight artists in Nanaimo Art Gallery’s ‘Estuary’ exhibition starting this week

Three blocks of Bruce Avenue will be closed until fall

Work will include utility upgrades, new curbs and sidewalks and new on-street bike lanes

Youth seen with gun at Nanaimo mall, suspect now in custody

Woodgrove Centre was shut down during police incident Monday

Silly Boat Regatta fills Nanaimo harbour with silly sailing

Island Red Cedar Construction wins this year’s race

New home cost dips in B.C.’s large urban centres

Victoria, Kelowna, Vancouver prices decline from last year

Graphic suicide scene edited out of ‘13 Reasons Why’ finale

Suicide prevention groups support the decision

Nine kittens and cats rescued after being locked in bins in northern B.C.: SPCA

SPCA says cats were starving, and matted with feces and urine

ICBC insurance renewals get more complicated this year

Crash history, driver risk prompt more reporting requirements

High-speed rail link would run from Vancouver to Seattle in under 1 hour: study

Annual ridership is projected to exceed three million

B.C. man dies from rabies after contact with Vancouver Island bat

Last known case of human rabies in B.C. was 16 years ago

U.S. tug firm to be sentenced for 2016 spill in B.C. First Nation’s territory

The Nathan E. Stewart spilled 110,000 litres of diesel and heavy oils in October 2016

Most Read