Nanaimo’s hospitality sector is looking forward to construction starting in about six weeks on a long-awaited Courtyard by Marriott hotel near the downtown Vancouver Island Conference Centre.
“It is going to be a great addition to our inventory of properties and offerings in Nanaimo,” Dan Brady, executive director of the Nanaimo Hospitality Association, said Friday.
PEG Development of Utah plans to put up a nine-storey, 174-room hotel at 100 Gordon St. at Museum Way.
New hotel rooms are needed in Nanaimo, Brady said. “We’ve had contraction in the industry.”
The 100-room Howard Johnson Harbourside Hotel closed at the end of October and a couple of other motels have shut down as well.
A hotel has been planned at 100 Gordon St. for more than 15 years. The original goal was to have a hotel open in 2008 along with the nearby Vancouver Island Conference Centre.
It is seen as a way to help drive business to the conference centre and build on efforts to add vitality to the city centre.
Earlier plans — including a 21-storey, 241-unit hotel — collapsed.
PEG was chosen in mid-2017 as the developer after the city issued a request for proposals. It sold the land to PEG for $750,000.
At first, PEG planned a six-storey building. It then submitted a new plan reflecting the latest design, with more height and additional rooms.
Nanaimo has issued a building permit to PEG, charging a fee of $157,479.
The purchase agreement allows for the city to buy the land back if PEG has not spent at least $1 million on the site by year’s end.
The project includes a waiver for development-cost charges and a 10-year tax break.
“This project represents a confidence in Nanaimo and is an important step in bringing new potential to the Vancouver Island Conference Centre and revitalization to the downtown,” Mayor Leonard Krog said.
Kevin Perry, PEG’s development manager, expects work to begin on the site in about six weeks and continue for 19 months.
Pilings will be driven into the ground and machines will compact the earth to create a more solid base. “Shortly after that, there will be footings and foundations, and it will start going vertical from there.”
Omicron Construction is the general contractor.
B.C. is in the midst of a skilled-trades shortage. Perry said that after several conversations with sub-trades, he is confident enough workers will be available. Some will come from Vancouver Island and others from the mainland.
“The real issue is that it is driving costs up. That was the bigger part of the challenge,” Perry said.
“We are going into this with higher construction costs than were anticipated a few years ago. So we had to get really creative in our design and make sure that everything we are putting into that building is efficient and worthwhile, while maintaining the esthetics of the building that we want to achieve.”
Perry said the construction cost will be $22 million.
He agreed with Brady that Nanaimo’s hotel market is underserved. This will be the first Marriott north of Greater Victoria on the Island.
The hotel will feature a bistro-café, as well as a 1,000-square-foot meeting room, pool, spa and fitness centre.
PEG previously built a Courtyard by Marriott hotel in Prince George.
The company is assessing other opportunities in B.C., including on Vancouver Island, he said.
