Details of what a proposed downtown hotel will look like, how it will serve Nanaimo, and the investors behind it became clearer Monday.
Perry Ehrlich, a Vancouver lawyer representing SSS Manhao International Tourism Group, a B.C. affiliate of China’s Suzhou Youth Travel Services, and its investor team, Junhao Chen, Xiaoan Dong and Min Chen, addressed city council with details of its proposed 200-room, $50-million hotel.
Ehrlich said his client is willing to pay market value for the land at 100 Gordon Street, a price of $565,000, lease 200 parking spaces from the convention centre parkade at $3.17 per spot per day, create about 500 jobs during the duration of construction, employ local workers once the hotel is opened, and work with Vancouver Island University to attract international students.
“Building a hotel and sending people here works hand-in-hand with my client’s mission,” said Ehrlich, who has negotiated land deals for Costco in many markets over the last few years. “The dream is to construct a world class hotel that will encourage tourism, inspire the economy, create job opportunities, and enhance the profile of the City of Nanaimo.”
The investors will, however, take advantage of the 10-year tax exemption council passed to lure investors to build on the site, providing savings of about $250,000 annually.
Dan Brady, chairman of the Nanaimo Hospitality Association, said because the proposal doesn’t ask for any subsidies, most, but not all, members of the association are onside with the project.
“I can’t believe in my wildest dreams that anyone would be crazy enough to come to town, build a 200-room hotel based on the current occupancy rates and scoop up the marketplace,” said Brady. “There is no marketplace, we’ve been flatlining for 15 years. The only reason these guys are moving forward … is they’re going to bring the audience.”
Suzhou Youth Travel Services is ranked 13th on China’s list of top 100 travel agencies and had gross revenue of $175 million in 2012. It claims it typically puts 40,000 customers a day on to airplanes to travel the world, and that as part of its itineraries an estimated 70,000 tourists would be brought through Nanaimo annually, generating about $35 million in revenue for Nanaimo’s economy.
“We’ve been working with their logistics team to inform them how to best get people to Nanaimo, and they’ll have another team here in June to look around and see what there is for their clients to do here,” said Sasha Angus, chief executive officer of the Nanaimo Economic Development Corporation, who has been working with the investor group for the last four months. “Nanaimo would be just one stop on a tour that includes the U.S. and other parts of Canada, and the Lower Mainland.
“They want to understand what the full scope of things to do in the community and put together programming they think would be most attractive to their Chinese clientele.”
Ehrlich said his clients have deposited $9 million in U.S. funds into an account to show they are serious about getting started on the project, and that there is also an interest to promote the conference centre and possibly take over management of the facility from Atlific in the future.
The hotel itself is expected to be 17 storeys with the first floor featuring a grand lobby and commercial spaces. The second floor will feature hotel amenities, the third floor will give access to the conference centre and Piper Park through skywalks, the fourth floor will house a pool, gym and spa, and the 17th floor will be a restaurant.
Mayor John Ruttan said at first blush, the proposal is an attractive one the city wishes to pursue.
“It’s an unusual and very unique business model,” he said . “The key for me is the people coming here are absolutely new to Nanaimo. Without being brought here they probably would never have considered coming here, most of them, and the spinoff will be going to other downtown hotels. All in all it’s as good an offer as we could hope to attract.”