A new Victoria ownership group paying $23 million for the Parkside Resort and Spa — formerly held by the financially troubled Aviawest Resorts — is mapping out a makeover and higher profile image for the hotel.
“It’s got so much potential that is unrealized. We are going to take it to the next level,” Lindsay Ross, a Victoria lawyer and part of the group of new owners, said Thursday from Toronto.
The planned sale to the LRG Group, or 0928772 B.C. Ltd., was approved in the Supreme Court of British Columbia earlier this week. Receiver Grant Thornton Ltd. has been marketing the assets in the 810 Humboldt St. building which operates as a hotel and timeshare property.
Ross is hoping the sale will close Feb. 28.
The purchase is backed by financing from B.C. Investment Management Corp., which refused comment Thursday. The Crown agency is also the major creditor for the Aviawest group of companies, and stated in a 2011 affidavit that it was owed $48 million.
The 129-unit Parkside, built for $60 million, is part of the Aviawest group held by the Pearson family of Parksville. Aviawest went into creditor protection in October 2011. Its main assets are Parkside and Pacific Shores Resort and Spa at Nanoose Bay.,
Ross said the purchasers are a small group of local business people who plan to hold on to the units for the time being.
The sale includes shares in units, translating into 504 quarter shares, plus two penthouses and commercial space, Ross said.
Property assets being sold range from a low of $16,635 for one-16th of a unit up to $2 million, the receiver’s report states.
Plans call for a grand re-opening to enhance the hotel’s identity in the market, Ross said.
Parkside is targeting new business just a few months after the closing of the downtown Queen Victoria Hotel and Suites removed 146 units from the local hotel pool. The Queen Victoria’s new owner, Concert Properties of Vancouver, is redeveloping it into rental suites.
Parkside’s condo units have full kitchens and plenty of space, putting it in a unique position in the hotel market, Ross said.
New features planned include a friendly full-time bellman, a restaurant, brighter colours, piano lounge on top of one tower, and a ballroom for weddings and other events on the other tower, Ross said.
“We hope to make it warm and cozy and, at the same time, sophisticated,” he said. “We love the property and we are really excited about the whole thing.”
Parkside opened in 2009 after construction stalled for nearly two years at the same time the real estate market cooled along with demand for fractional ownership projects.
It is a complex matter with more than 650 creditors claiming they are owed a total of $93.7 million, according to the receiver, Grant Thornton. Seven secured creditors claims total another $71.2 million.
B.C. Investment Management Corporation Construction has a $27.9-million first mortgage on Parkside, secured by a second mortgage over Pacific Shores. The mortgage agreement on Parkside puts the corporation in first priority position over other creditors, a B.C. Investment Management Corp. official said in a 2011 affidavit.
Further, bcIMC Specialty, a related company, has a third mortgage on Parkside and a third mortgage on Pacific Shores, for $19.6 million.
That corporation is one of Canada's largest institutional fund managers, with $92 billion in assets under management on behalf of 475,000 public employees.
In December, two Nanaimo residents acting as agents for Aviawest, admitted to selling $770,044 worth of company promissory notes without filing a prospectus or having an exemption from prospectus requirements. They were fined $6,000 each under a settlement with the B.C. Securities Commission.
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