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Traveller's takes a long road back: Motel's rebirth aims at working singles

Construction crews are giving new life to the former motel at 2828 Rock Bay Ave. in Victoria, transforming it into a 55-unit rental property targeting working singles.

Construction crews are giving new life to the former motel at 2828 Rock Bay Ave. in Victoria, transforming it into a 55-unit rental property targeting working singles.

“A building like that just needs to be reborn,” said Ian Laing, of Ian Laing Properties.

Laing and Mike Forbes, of Forbes Pharmacy, are the main partners in the property, purchased for $2.1 million in late 2011.

The site was owned by the companies behind the Victoria-based Traveller’s Inn chain of budget motels. More than 20 of those companies went bankrupt in 2009, and its properties — including the one on Rock Bay — changed hands under court-ordered sales. Some have gone through makeovers, while others are still in the process.

Laing said the conversion of the Rock Bay motel is almost complete, with rentals likely to be ready this spring. “We are excited to be in the Rock Bay neighbourhood as well as helping to revitalize the up-and-coming area,” he said.

Rents for the studio, bachelor and one-bedroom units will run from $650 to $850 a month, he said. The building will have 25 parking spots, 55 secure bicycle spaces and a bike rack.

The property, near Gorge Road East, had become a meeting place for drug dealers and users before the new owners took it over and spent $30,000 on a security fence.

The building permit filed with the city puts renovation costs at $1.2 million, although Laing said that other expenses, such as architect fees, push the total close to $1.5 million.

Today in Monitor, we look at what is happening with a dozen other properties in the former Traveller’s Inn group of companies.

One former Traveller’s Inn has been turned into supportive housing. Some are still being run as motels, while others are in the midst of renovations to create social or rental housing.

When more than 20 companies behind the Victoria-based Traveller’s Inn chain of budget motels went bankrupt in 2009, the properties ended up on the market under court-ordered sales.

The fate of some has yet to be determined. Owners are batting around ideas, wondering whether to fix up the buildings or redevelop the properties for another purpose.

Some owners — be they private or government — have spent millions in total to upgrade and refresh the former motels in the past couple of years, but other properties look shabby and rundown. New owners have to decide if it’s worth fixing up an older building at a time when the tourist industry is hurting.

Fewer Americans visitors, a staple of the local tourism market, are coming to Victoria. Travel patterns are also changing, as visitors travel more at the last minute and take shorter holidays — all factors affecting the health of the hospitality industry.

“That really has a direct impact on tourism in the city and on the hotel business in the city,” says businessman Robin Kimpton, who owns two former Traveller’s Inns.

Nor is life easy for those wanting to convert the motels into rental units. They must meet city of Victoria criteria covering everything from the size and affordability of units to the number of parking spots for vehicles and bikes, accessibility of storage, amount of green space, security and whether the proposed use fits into the official community plan.“We’ve seen some [conversions] that have been very successful and we’ve seen some that, unfortunately, have been absolutely disastrous, with everything from killings and fires and all sorts of things,” said Coun. Pamela Madoff.

For years, the blue-and-white Traveller’s Inn signs were a staple in at the north end of downtown Victoria, especially along Douglas Street.

The owners group once held roughly 14 properties and boasted one of the largest number of hotel rooms in B.C., at close to 1,000. All but one of the motels were in Greater Victoria. (The then-named Oceanfront Grand Resort is in Cowichan Bay.)

When he ran into financial troubles, Victoria businessman John Asfar — who headed the chain — hoped to sell the properties and repay creditors in full, but that did not happen. The chain ended up being dismantled as creditors moved in to recoup what they could.

Bankruptcy trustee Ken Glover, who dealt with the 21 companies behind the Traveller’s Inn, said this week that to the best of his knowledge, all the properties have sold, although paperwork is ongoing and may take another year.

The unravelling of the chain was a complicated process, as properties were listed for sale with different real estate agencies and different receivers.

Glover estimated the total owed to secured and non-secured creditors at somewhere between $65 million and $68 million, but said the final amount left owing will likely never be known. That’s because, if a major creditor, such as a bank that provided a mortgage loan, is not fully paid out, it does not bother to file an amended claim outlining how much remains owing.

“They know I’ve got nothing because they just sold it [the property],” Glover said.

About 300 employees worked for the chain, some of whom were owed money. Glover verified claims made under the federal wage-earner protection program for those owed money. That program compensates eligible workers for unpaid wages and other money owed when their employer declares bankruptcy or is in receivership.

Here’s the status of major motels that were in the Traveller’s Inn group of holdings:

• 3025 Douglas St.

Frustrated owner Mike Kelly said he’s thinking of razing the former two-storey Traveller’s Inn, installing a chain link fence around the property and letting it sit for one or two decades. “I’m just looking at my options.”

Drive by the site today and you’ll see signs advertising storage space and an aging motel, white with dark-grey doors, catering to long-stay tenants.

Developer and businessman Kelly, who paid $2.2 million for the property, is exasperated by the City of Victoria’s rejection of his proposal to convert the motel into affordable rental apartments.

Other Traveller’s Inns have been approved or are being considered for similar redevelopment, he said. “I’m the only one that’s being held up.”

When Kelly first approached the city, some councillors described the plan with 45 units as substandard housing. Kelly replied that was hypocritical because Victoria approved its own conversion of a former Traveller’s Inn at 710 Queens Ave. but turned his down.

A subsequent application reduced the number of units to 42 and reconfigured others. Victoria insisted on an easement permitting access to the storage area via another property and said parking could not be removed without city approval. The other property owner would not agree to the access, a municipal official said.

The motel needs major upgrades, said Kelly, who added he would install a waterproof membrane over the site if he demolishes the motel.

• 3020 Douglas St.

The 51-room Vacation Inn and Convention Centre on the northern stretch of Douglas Street sold for $4.2 million to Victoria businessmen Wayne Hopkins and Mark Eraut, and Merle Gardner of Williams Lake. The owners are in the midst of determining the long-term future of this well-known property, once called the Tally-Ho Motor Inn. It continues to operate as a motel, with rooms renting from $59.95 nightly. It has an outdoor pool, waterslide, Kitty’s Hideaway Restaurant and Murph’s Place Lounge.

The Vacation Inn was modernized and spruced up after its purchase, Hopkins said. Now, owners are mulling whether to invest “considerable money” to reconjure its days as the Tally-Ho. “The hotel industry is up and down and very challenging at times,” Hopkins said.

The sloping site of more than an acre has access to both Douglas Street and Burnside Road East. It’s next door to the Cornell Chevrolet dealership at the corner of Douglas and Finlayson streets, which has been cleared to become the new location for Metro Lexus Toyota. One possibility is redeveloping the property into a commercial site in line with other nearby uses, Hopkins said.

• 2898 Douglas St.

The 52-unit Arbutus Inn was rebranded and renovated in 2011 as a mid-range hotel. The three-storey building was purchased by Annie Wong-Harrison, owner of National Car and Truck Rental and Sale, for $2.15 million. It sits at the intersection of Douglas and Dunedian streets and Burnside Road.

Extensive upgrading, costing more than $300,000, was carried out, Wong-Harrison said.

“We replaced the roof as well as just installed a new heating system. [We] replaced all the beds with Serta Perfect Sleeper Beds, triple sheeting, gel pillows, repainted, re-carpeted, new light fixtures, mirrors and renovated all the rooms and bathrooms. Installed flat screen TVs and renovated the lobby. I think we should have been on a reality hotel makeover show!”

• 1961 Douglas St.

The four-storey, 80-unit Capital City Centre hotel at the corner of Douglas and Discovery streets sold in May 2011 for $5.568 million, B.C. Assessment said. Directors of building owner Capital City Centre Hotel Ltd. are business partners Wally Meng and Jamie Wu, whose holdings include the Red Lion Inn and Suites at 3366 Douglas St. Meng was in the news recently in connection with a series of stabbings at the Red Lion in November, and faces five charges of aggravated assault.

The Capital City Centre building was constructed in 1961 and initially listed for sale in 2009 at $7.9 million. It includes Soprano’s, an outdoor pool and banquet rooms and continues to operate as a hotel.

• 1850 Douglas St.

This hotel was not part of the original Traveller’s Inn group of companies that went into bankruptcy, but its owner was deemed bankrupt in 2010. It was the final Traveller’s Inn to be taken over by a receiver.

In 2010, its owner was listed as T.S. Kwon Holdings Ltd. with John Asfar its president, according to B.C. government documents. It sold in 2011 for $4.43 million, according to B.C. Assessment records. Current owner Island Travel Inn Inc. is registered in Edmonton.

A red and white sign at the building indicates it’s now called the Island Travel Inn. A Traveller’s Inn sign remains at the hotel, which features a white-and-blue colour scheme.

• 626 Gorge Rd. E.

Owner Mike Forbes is seeking a rezoning to create 23 rental apartments of between 240 to 461 square feet, plus 1,657 square feet of retail space, in the two-storey brown building with dark trim.

The former Traveller’s Inn, now closed, was the first of the group to sell in December 2009 and changed hands again in September 2011 for $1.4 million.

City of Victoria planning staff recommended not proceeding with the application, saying it does not meet the goals of the official community plan, or comply with minimum unit sizes and the required number of parking spaces. But the city’s planning and land use committee supported going to public hearing. Coun. Lisa Helps said in January that the project would help ease the demand for affordable housing in the city.

Staff are reviewing a development permit for the site and will report to council. A public hearing will be set after council reviews the development permit application, said a city spokeswoman.

• 120 Gorge Road E.

Construction is underway at the 45-year-old former motel to convert it into affordable housing for the aboriginal community. More than $1 million in government funding is being spent to transform the former Traveller’s Inn for multi-generational housing.

Siem Lelum House will be operated by the Victoria First Nations Friendship Centre, which is negotiating to buy the building from the city, which bought it and another property to provide low-cost housing. The first phase will provide 26 units and the second another 19, for a total of 45. Rents will run from $425 for studios to $620 for one-bedroom suites or family units.

The property was sold in July 2010 for $3.362 million, according to B.C. Assessment records.

• 710 Queens Ave.

Tenants have moved into what’s now called Queen’s Manor, a supportive-housing building near Douglas Street. The three-storey former motel is one of two properties purchased by the city of Victoria in 2010 to add to the stock of social housing. B.C. Housing bought it last week from the city for $2.5 million, said Katie Josephson, City of Victoria spokeswoman.

It has been repainted with creamy beige exterior walls and moss-green trim, as part of the $1.5-million renovation project. A large picture of sunflowers is posted by the entrance doors.

Queens Manor was upgraded with support from taxpayers at the federal, provincial and local level, plus the Victoria Cool Aid Society and the United Way of Greater Victoria.

The building is operated by Cool Aid and has 36 studio units offering what is called low-barrier transitional housing, catering to people who may have been homeless.

Victoria city staff will remain involved in Queen’s Avenue neighbourhood discussions, including regular meetings with the police, a city council liaison and local neighbours, Josephson said.

• 760 Queens Ave.

Businessman and former Victoria council candidate Robin Kimpton, owner of two nearby properties, bought this three-storey former motel for $4.2 million in 2010.

With more than 80 rooms, the large motel near Blanshard Street advertises the best rates on the strip.

Kimpton said the hotel caters to a mix of short and long-term stays. His aim is to attract older residents who want to downsize from a house, although he plans to retain some rooms for hotel use. “I would love to cater to a seniors crowd.”

When he purchased the motel, there was a lot of “deferred maintenance,” he said, describing the building as nonetheless being in good shape.

This spring, Kimpton said, exterior improvements will be carried out, including power washing and siding replacement. Some siding is broken and the exterior white paint is marked and looks in need of a new coat.

• 723 Field St.

This building has one of the most interesting facades of the former Traveller’s Inn group holdings. Located just south of the Bay Street Amoury, it has an arched entrance over the main door and a round window above that.

Called Boutique Suites, it was purchased by Kimpton — who also owns the parking lot next door — in December 2010 for $2.75 million.

An advertisement for rental units is frank: “You may know this building as a tougher building, however, we have been working to turn this building around.”

Of its 28 units, a dozen have been upgraded so far at a cost of between $5,000 and $10,000 each, Kimpton said. Six units are currently occupied.

Suites are fixed up as they become empty. Workers are on the job daily, he said. “We’ll just keep at it as best we can.”

• Cowichan Bay.

Oceanfront Suites at Cowichan Bay went into receivership. Today, the 56-unit waterfront building with a restaurant, pool and fitness centre is owned as strata-title units.

Another key holding in the Traveller’s Inn group of companies was not a motel:

• 2269 Douglas St.

Jordans Interiors bought, renovated and last month moved into the former furniture showroom once touted as a potential casino in a high-visibility location at Douglas Street and Queens Avenue.

The Vancouver-based, family-owned company has given the building’s exterior a sleek modern look. First opened as a Wosk furniture store, it became a Now furniture store, which then closed in 2004. Traveller’s Inn head John Asfar purchased the building the next year and launched a failed attempt to turn it into a casino. The City of Victoria decided not to hold a public hearing into the casino plan after B.C. Lotteries Corp. said it did not support that use.

After Now’s closure, the 13-year-old building had been vacant, although it had served as a site for the annual Times Colonist book sale. It was among the Traveller’s Inn group of holdings put on the market, changing hands in 2011 and then selling again in October 2012 for $6.28 million, according to B.C. Assessment records.

David Jordon-Knox, company chief executive officer, said the building is about 55,000 square feet, counting storage. Relocating from its smaller previous store at 2680 Blanshard St. gives Jordans the opportunity to feature more products, he said.