The Oak Bay Beach Hotel could have a new owner by the end of February.
More than 20 non-binding bids were submitted for the Beach Drive hotel-condominium-spa property, ranging from “deep-discount-value” investors to higher offers, said Mike Bell, receiver and vice-president at Ernst and Young in Vancouver.
Names and details were not released.
The luxury hotel has been in receivership since December 2014 with debts topping $140 million. Opened in 2012, it was the dream of owners and local residents Kevin and Shawna Walker. Neither could not be reached Wednesday.
The Walkers had dismantled an earlier hotel on the 1.9-acre waterfront site to build a complex with 100 hotel units and 20 condominiums, a restaurant, pub, theatre and waterfront pools.
Growing debt led to receivership and the hotel being put on the market in late October 2015.
Creditors include a group of construction lenders owed
A group of 49 bondholders is owed $46.5 million and trades creditors are seeking $2.1 million. Within the bondholder group,
24 bondholders signed deals with the Walkers’ Bison Properties to give them ownership of a hotel unit, but they never received title. Another 18 investors have legal ownership of their units.
As well, three investors who do not hold title to condominiums have been allowed to continue living there as the receivership process unfolds, Bell said.
Once on the market, the hotel quickly attracted attention from potential buyers.
“There was interest locally, nationally and also internationally,” Bell said, adding some offers came in with connections to mainland China.
That initial list was whittled down to fewer than 10 qualified bidders, Bell said. Binding offers are expected by Jan. 29.
Buyers are attracted by the property’s character, quality and long-term potential, Bell said.
Since it was taken over by Ernst and Young, the hotel has become profitable, meeting budget and cash-flow expectations, Bell said.
The receiver is in the process of preparing for the upcoming fiscal year beginning in April.
Once the final bids come in, key lenders and the receiver will meet. The aim is to reach an exclusive agreement with one bidder. When that happens, a formal agreement will be signed and the plan will go to the B.C. Supreme Court for approval. It is up to the judge to decide whether to accept the offer.
No date is in place, but Bell is hoping that the matter will go to court in late February.
Meanwhile, some of the bondholders and the construction group are in a dispute in court over who should be granted priority as lenders. That will be up to the judge to decide. It is the receiver’s job to operate and sell the property, said Bell.