$23-million, six-storey hotel planned for Nanaimo

A proposed $23-million, six-storey hotel in Nanaimo will work better than a previously proposed 21-storey hotel, says a tourism consultant.

PEG Development of Provo, Utah wants to buy a city-owned downtown lot and open an 118-room Courtyard by Marriott Hotel in 2019.

“I think it has a real good shot at adding another dimension to Nanaimo,” said Frank Bourree of Chemistry Consulting. “It would really be a godsend for them to make some progress on that,”

Courtyard by Marriott is a good brand and the hotel would be a good size, Bourree said.

“It is likely a better fit than the last project that was proposed in terms of scale and market positioning. These guys will focus on a wide variety of the market. The previous developer was looking at international group tours and things from China.”

The site for the proposed hotel is near the Vancouver Island Conference Centre, which opened in 2008 and is owned by the city.

“They need to work on marketing and building that conference business and then filling the hotel,” said Bourree.

Nanaimo needs to market aggressively, Bourree said. “This will add some additional hotel tax revenue to the market and a new product, which will give people another reason to go there.”

“We are excited to be moving forward with PEG Development and their ambitious plans to deliver a 118-room hotel by early 2019,” said Nanaimo Mayor Bill McKay.

Cameron Gunter, PEG’s chief executive, said the project will “create new jobs, help the [conference centre] reach its full potential and contribute to the overall growth in the area.”

The U.S. company is finishing a 175-room, six-storey Courtyard by Marriott hotel in Prince George.

PEG is first completing a 120day due-diligence period before paying $750,000 for 100 Gordon St. It will be completing the required development permit, and carrying out environmental and geotechnical studies of the property.

An agreement in principle to sell the site was approved by Nanaimo city council on Monday.

Repeated attempts have been made to get a hotel built on the site. In 2003, plans for a conference centre and hotel were stalled when public-private partnership arrangements did not come to fruition. Other attempts followed and none went ahead.

The Vancouver Island Conference Centre was eventually built, but a hotel did not materialize. Nanaimo has been keen to see a hotel built to help boost attendance at the Conference Centre and to add vitality to its downtown.

A Chinese company had proposed a 21-storey hotel with 240 rooms that would be filled with guests on tours. But the company failed in 2015 to get a one-year extension from the city on the planned $50-million project.

Nanaimo then issued a request for offers in December to find a company willing to develop the property. It attracted six proposals. Of those, five companies made presentations to in-camera meetings of city council in April and May. Council picked PEG as the preferred company and staff started negotiations, leading to the new agreement in principle.