Tuesday, February 12, 2013

Crowsnest Pass Hotel Update

In today's Crowsnest Pass Promoter is a little more information from Joni MacFarlane about the Hotel development with the financial implications included . From reading the story it appears now that the $300,000 cash we received a $100,000 is directed towards creating a green space next to the development so in all essence the Municipality is only receiving $200,000. At the end of the story is a poll for you to vote and how you feel about the deal.


Hotel announced for Crowsnest

Joni MacFarlane

A 50-75-room hotel, located at the former site of the Crowsnest Centre, was announced last week.
Medican, a Medicine Hat-based construction company and Group Vachon, a Calgary-based hotel management company, signed an agreement with the municipality to build a development that is to include a pool, hot tub, breakfast area and meeting spaces. The project will be accompanied by a complementing restaurant and sports bar as well as a green space with amenities such as a dog run and playground area.
The development group said their vision for the project is to “create a signature hotel and commercial area that will allow tourists to enjoy the numerous outdoor activities available within the Crowsnest Pass and also to create the primary rest area location between Lethbridge and Fernie”.
Medican has been in business since 1974 with a primary focus on development and construction of seniors’ residential communities and retail commercial development.
Group Vachon is a Calgary-based company with over 22 years experience in the hotel industry, building and managing properties including international brands as well as independent hotels across North America.
Details from a public open house on Feb. 12 were not available as at press time.
After the announcement was made, The Promoter spoke with Chief Administrative Officer Myron Thompson to discuss the financial details and implications for the municipality.
Thompson said the purchase price was $1.1M that includes $300,000 cash and total responsibility for the demolition and clearing of the site.
The municipality had looked at doing the demolition themselves, he explained, but it was included in the proposal from the construction company.
“We said, well fine, because that takes that risk and liability from us,” he said. “If we had to spend that $800,000 on the demolition and then get $1.1M, it’s all the same.”
Thompson said they discussed the offer with an appraisal company who said it was “very close to being at market value”. The value had decreased slightly from July 2010 when it had been appraised at $1.4M, he said.
“There was talk about giving the land away for nothing so I think it’s a good deal,” he added. “Because what it does, it develops an entire parcel of land.”
The purchase price of $300,000 is held in trust, Thompson said, and the developer will get title to the land. If they don’t meet the requirements set out in the agreement, there is a certain time period that the municipality can take the land back.
The demolition is to be completed by late summer, the foundation is to be in by late fall, and the development has to be completed within two years from the date the agreement was signed, said Thompson.
He added that Medican and Group Vachon have been working with a hotel developer and the name of this hotel will be announced within the next month.
Lethbridge architect Alvin Fritz is developing a design for the hotel.
A stand-alone restaurant will be built on the site by Medican, he added, and another restaurant will be located inside the hotel.
A separate company has been contracted to do the demolition work, but Medican is unable to confirm their name until the agreement is signed.
As part of the agreement, one-third of the funds from the sale - $100,000 – will go towards development of a green space on the northeast corner of the site, said Thompson.
This land is owned by the province and will be leased to the municipality for Medican to develop a tourist/rest stop with picnic tables, playground, dog run and other amenities.
The balance of the funds $200,000 – will go into land reserves, Thompson said.
There are many steps to be taken before demolition and construction get underway, he said, such as rezoning of the land and development agreements and permits.
“We had 82 changes in the agreement. Eighty-two,” Thompson emphasized. “I don’t think people realize the amount of work that we went through… to protect the community so we didn’t end up with another River Run… I know the concerns and it’s a balancing act not to scare these guys away but yet protect ourselves and I think we’ve got a really good deal.”


Anonymous said...

The most important question to me. Does the Municipality have any kind of security in place to guarantee the performance of the companies involved?

I know the Mayor likes to bring this up in the same context has the River Run mess. But we should not lose sight of the facts. River Run was a private sale of property no different than me selling my home to another private individual or my acreage at Frank.

This is a public asset it is probably the most valuable piece of property we the taxpayers own. Due to the fact that this is a public owned piece of property the municipality has way more bargaining power to control what happens on this property than they do on any private piece of property.
We the taxpayers will never have this opportunity again, it must be done right.
Security, Security, Security


Anonymous said...

The best way to secure performance on a contract is through a bond. Most municipal contracts in Alberta are bonded. If you don't have a bond or an LOC, you only have words in a contract. People always fight about words, this is why we have courts and litigation. Be interesting to know if this municipal contract has a bond or an LOC? If it was revised so many times, it probably has a lot of words.

Anonymous said...

My thinking also. Once they have title we'd have to sue to get it back.

They get title to the land and our money is held in trust? We can only hope the Promoter got that wrong.

BTW, Group Vachon was incorporated in Alberta 2011 FEB 01 .

page 41

The 22 years is probably Vachon's personal experience.

Anonymous said...

Question- the land was appraised at $1.4 million in July 2010, and was "sold" for $1.1 million at the end of December 2012, a 21.4% DECREASE. Did our residential lots show the same decrease on our tax forms, assuming that commercial and residential values dropped the same? Perhaps the real estate folk can reply, because I doubt if our CAO can.

82 changes to a convoluted contract requiring the buyer to jump through hoops will lead to interesting dealings in the next year. Transferring the load to the developer rather than providing it with a clean site sets it up for conflict. Hope it works out.

Anonymous said...

Without the security deposits/performance bonds in place the only guarantee is the words on the papers.
How many lawyers have become very rich by interpreting words. Send a couple of paragraphs, let alone a whole contract to 10 lawyers and you will get ten different interpretations.
I expect that politicians that are planning on running for re-election this fall only care about what happens between now and then. For the politicians the trick is not having the hotel built just convincing us saps that it will be in "twenty-four" months.

Anonymous said...

"Lethbridge architect Alvin Fritz is developing a design for the hotel."

They look legit, but they may just be doing conceptual drawings in hope of getting a contract.

Their only work I've seen is Camp Caroline, halfway down this page:


I wonder if the hotel will look like that?


Anonymous said...

So far, the more details emerge, the weaker it appears. Be interesting to know if the municipality is ready to release all the details. It looks like they stampeded themselves into a deal. If the municipality transfers title without a bond in place, and the "purchaser" puts a mortgage on the place, then what?

Anonymous said...

I have been saying since this thing was announced that it is all about the details. The first hidden detail is the 100,000$. I can not wait to see the rest of the agreement(such a friendly word).
Anon 2:00 I agree that this deal was made on short term political thinking. Only time will tell if this is a good/bad deal.
I hope for the best.

Anonymous said...

Emile has a post:


Maybe they'll be handing out copies of the contract at the OPEN HOUSE tonight 7:00 Elks.

Crowsnest Pass Home said...

I just read Emile's comments, he invited questions so I asked quite a few.
I look forward to the responses.

Anonymous said...

Municipal contract without a bond? They better say that funding has been verified and a major financial institution or a solid investor made a written commitment. Even that would not be as good as a bond, but better than nothing.

Anonymous said...

Crowsnest Pass Home said...
"I just read Emile's comments, he invited questions so I asked quite a few."

I just dropped off my FOIP request:
"The contract for the Crowsnest Centre sale, any other agreements with the parties and related records.
Documents showing market value per MGA 70.
List of records you cannot disclose with reason for each.

Don't hold your breath, though. I just received notice from OIPC, they are looking at my appeal re my Nov. 13 request.

Anonymous said...

They made 82 changes. The poor fella does not understand how funny this sounds. Lawyers never lose in a deal like this. Whether something happens, or nothing happens. Hopefully something happens.

Anonymous said...

Great, 2 more restaurants.

peter rosner said...

Just a thought here was this property ever listed for sale or signage to show it was FOR SALE. If not we will probably never know the true value. But we have to move on now, i do give some of the previous council and this one a lot of credit for making this happen. Sometimes a bird in hand is really worth two in the bush. We could be sitting on that property for a long time and it gives you the image of a dying community. Hopefully this development is a sign of things to come and they really have covered all the bases with the 82 changes. I am certain they did work very hard at this. Still not impressed with the rest of their leadership but their stock has gone up.

Anonymous said...

peter rosner said...
Just a thought here was this property ever listed for sale or signage to show it was FOR SALE. If not we will probably never know the true value. But we have to move on now ...

... to the Municipal Inspection. Some of these reports


have looked into whether land deals have been conducted in an open and transparent manner according to MGA and FOIP legalities and whether taxpayers have received fair value.

One report was critical of a blurred line between council and administration. This deal was assigned to Administration by Council resolution, so there should not have been any council involvement in the process. Architect Fritz let slip that there had been presentations to council.

Anonymous said...

The $300,000 is being held in trust. In trust for the benefit of the seller or the buyer? Should the purchaser, (for whatever reason), be unable to find an investor for the hotel, say in the next 24 months, will they get their $300,000 back and the land reverts back to the municipality? So far, this sale looks like an option to purchase.

Anonymous said...

Those interested in bonding for this project should research Medican history. May find it of interest for the discussion.

Anonymous said...

So funny, or really not this funny. Much hay has been made about the previous councils trying to do business with developers who did not turn out to be so strong in the end. Now the shoe is on the other foot. Hopefully this council is learning a little bit. They are trying to do what is best for the community, just like any other council before them. In this they are not any better or smarter than the people before them. They are trying to do the best with what they have, just like the people before them. Sometimes it takes a while to appreciate people who are no longer around, like Dr. John, for example.