A Chinese company has killed a planned $50-million hotel in the heart of Nanaimo, leaving the city once again with an empty lot.
It’s the second time that development plans have collapsed at this site. It also highlights the divide on Nanaimo council between those who were optimistic that the project would go ahead and those who lost faith that it would get built.
SSS Manhao’s lawyer stated in a July 9 letter to Nanaimo that the company will not accept a proposal that would have provided a six-month project extension.
The city’s terms “are not acceptable,” said the letter from Perry Ehrlich, representing SSS Manhao International Tourism Group, part of Suzhou Youth Travel Services Co. Ltd.
SSS Manhao had proposed building a 187,000 square foot, 21-storey hotel with 240 rooms, and 13 commercial spaces. The developer vowed to bring in 70,000 tourists annually.
When the company did not meet its deadline of completing the hotel’s foundation by May 31, that gave the city the right to buy back the building site for $565,000 later this year.
A 5-4 vote saw council turn down the company’s bid for a one-year extension.
Council then voted in favour of a six-month extension. It also wanted $100,000 to go for park improvements, and for the company to agree to dropping its first right of negotiation to buy the conference centre.
SSS Manhao turned that down.
The company “does not believe that the project has the support of the majority of city council,” Ehrlich’s letter said.
“Accordingly, the company has determined that viability of the hotel development is at risk, and the company cannot therefore accept the terms of the proposal.”
SSS Manhao said it wants city confirmation that it will be buying back the lot.
Mayor Bill McKay had argued in favour of the one-year extension sought by the company, calling it a “no-brainer.”
His view did not prevail. “I was hopeful this deal would go through, so it is very disappointing to receive word that the proponents have chosen not to proceed,” McKay said in a statement.
This issue is critical to Nanaimo’s business community, which is keen to see a hotel to boost the local economy and attract business for the seven-year-old Vancouver Island Conference Centre.
Coun. Jim Kipp said in an interview Monday that the developer’s decision was probably based on other factors as well, such as challenges with the Chinese economy and the world economic situation.
Nanaimo offered many incentives to SSS Manhao, including extra building height, tax exemptions and no development cost charges, he said.
Kipp is still hoping for a hotel. “Our economic development staff have to bring something forward to council that is achievable.”
An earlier plan for a 17-storey hotel, planned by a different developer, did not go ahead.
