Nanaimo city council is divided on whether or not to give a Chinese developer extra time to build a $50-million, 240-room tower.
A negative decision could kill the already delayed project, which the developers say would draw 70,000 tourists – equal to 90% of the city’s population – from China per year.
In a five-four vote last week, council rejected the developer’s plea for a one-year extension on an agreement with the municipality. Council members then unanimously decided to vote again, this time to consider a six-month extension.
Developer SSS Manhao International Tourism Group, part of Suzhou Youth Travel Services Co. Ltd., has been planning a 21-storey hotel near Nanaimo’s conference centre.
But SSS Manhao didn’t meet its May 31 deadline to have the hotel’s foundation in place. That gave the city the right to buy back the hotel site in November for $565,000. The developer wants to keep its plan alive and so does Mayor Bill McKay.
Turning down the extension request “nibbles away at the level of confidence in the community,” he said.
“We want to be seen as welcoming to investment. This, in my opinion, sends the wrong message.”
Nanaimo has granted extensions on other projects in the community, he said. “This is a no-brainer [to approve the extension].”
City council is wrestling with the hotel decision at the same time racist graffiti and flyers are showing up in Nanaimo. Anti-Chinese sentiments were expressed in spray-painted graffiti on benches featuring ads from Chinese real estate agents. Flyers also targeted Chinese real estate agents, telling people not to sell to Chinese buyers. Police are investigating.
The SSS Manhao site near the conference centre was set aside for a hotel many years ago. The hotel was to be an integral part of the $72.5-million Port of Nanaimo Centre and drive business for its new conference centre, which opened in 2008.
After an earlier developer failed to build a promised 17-storey hotel, the city signed a deal with SSS Manhao.
The developer’s lawyer, Perry Ehrlich, said from Vancouver SSS Manhao is committed to going ahead and would have hotel construction completed by July 2017 and it would be open for business the following year.
The hotel would create hundreds of jobs in Nanaimo, he said.
SSS Manhao has already spent nearly $5 million on environmental studies, engineers, design and more, Ehrlich said.
Tourism consultant Frank Bourree, of Chemistry Consulting, questions whether it is feasible to build such a hotel in Nanaimo. Bourree analyses hotel and other tourism-related performance in Nanaimo and Victoria every month.
Hotels are not normally built until occupancy rates hit 75% annually, he said.
Nanaimo was only at 60.25% last year and might reach 63% in 2015, Bourree said.
As well, the community’s conference centre only had 19,895 delegates, he said.
“The conference business is incredibly competitive in B.C.”
