A new $50-million, 197-room hotel is one step closer to becoming a reality in Nanaimo’s downtown core.
City council gave its approval in principal Monday night to sell city-owned land at 100 Gordon St. to SSS Manhao International Tourism Group, a B.C. affiliate of China’s Suzhou Youth Travel Services, for $565,000.
The next step is sending out a notice of disposition, followed by final approval from council two weeks from now and then the parties will begin working through a serious of conditions.
Next to the Vancouver Island Conference Centre, the 0.17-hectare piece of land will be used by SSS Manhao to construct a 17-floor hotel that includes a swimming pool, weight room, retail units and a restaurant and bar on the 17th floor.
The company is developing a business plan for a new tour route from Vancouver to Vancouver Island that includes an overnight stay at the proposed Nanaimo hotel and estimates that 70,000 tourists would be brought through the Harbour City annually, generating about $35 million in revenue for the local economy.
Mayor John Ruttan said it is a good sign that a company wants to invest $50 million in Nanaimo.
“I think the greatest impact is it shows Nanaimo is coming of age,” he said.
Ruttan said the new hotel will assist in making the conference centre a more self-sustaining operation – the city currently subsidizes operations to the tune of $950,000 per year – because it would add an additional 200 high-quality hotel rooms, which will allow the centre to book larger events.
“I’m optimistic that this is going to bring in more business,” he said.
Sasha Angus, Nanaimo Economic Development Corporation CEO, said the new hotel will have a significant economic impact for the region.
The company operates not only a large retail travel business that puts more than 40,000 people on planes per day, but it also arranges meetings, conferences, retreats and incentive travel packages for corporate clients and is interested in working with the conference centre management team to bring some of these people to Nanaimo, he said.
SSS Manhao also wants to work with Vancouver Island University to provide opportunities for its employees to receive hospitality management education here and some of its retail travel clients could decide it is a good place for real estate and business investments, said Angus.
“[The hotel] will have a significant impact as far as raising awareness about our community,” he said, adding that the company is taking out ads in a Chinese newspaper that has a daily circulation of 1.8 million people to help build awareness about the city.
Angus said the NEDC is reaching out to local stakeholders to develop programs for the tourists.
“They’re very comfortable that what the community has to offer would be something their guests would enjoy,” he said.
The land sale deal hinges on a number of conditions, including a parking agreement for up to 190 spaces in the conference centre parkade; an option for the city to buy the property back at the original price if SSS Manhao does not construct the foundation within 18 months of acceptance of the offer; a development covenant that requires the hotel to be built within three years and maintainined at a four-diamond rating or higher; and easement documents that allow the company access to the conference centre and Piper Park.
The company will also take advantage of a 10-year tax exemption bylaw council passed to lure investors to build on the site.
Angus said the parking spaces are not exclusive and when the hotel does not have need of them – many of the guests are expected to arrive by tour bus – they would be available for others.
He said SSS Manhao has first right of refusal when the contract for managing the conference centre expires.