Monday, July 15, 2013

Hotel deal what's next?

Over the weekend I have received a lot of comments on my blog and around town about the news release from the municipality regarding the loss of the Medican deal.  

A couple of common themes I heard over and over again a lot of people were not surprised. The Municipality made a deal with a company that was under court protection, to save itself from it’s creditors.
How long did the Quebec manufacturer story drag on, and what was the result of that endeavor. The CAO announced after a year that the company realized we were to far from Lethbridge and the ceiling on the old Artic Spa building was too low, I would be taking a look at my management team if it took them a year to figure those things out.
The Mayor as spun this tale for how many months about waiting for Best Western approval. I think lot of other peoples agree with my opinion, that was just a stalling tactic the real issue from day one was finding the $8-12 million to build a hotel.
Everybody know if that kind of money was available,  the demolition would have started by now. I am sure the hotel owners would have been more than able to hook up with a hotel chain somewhere during the next two years while the hotel was under construction.
My concern now is how will council proceed in a desperate attempt to salvage something from this deal just mere months prior to the election.  

I take the following quote from the most recent Mayor’s Corner:

At this point we are still working with the Vachon group (hotel finders) to attract a Best Western or other hotel chain to build. In order to retain our right to build a Best Western for two years, we need to consider putting up $50,000.00. A decision regarding clearing the property will also have to be made very shortly”.

Unless I am totally miss reading the above quote it sounds like the Mayor is going to attempt to persuade Council to put up $50,000 to retain the rights to build a Best Western.

This is crazy for so many reasons, the first being these are taxpayers dollars, is anyone aware of a government at any level that is in the business of buying franchises, rights etc?

Two if the hotel finders (Vachon group) are so certain that a hotel (with real investors) can be found let them put up the $50,000 they should easily be able to regain their investment with a hefty return from that future group.

Third what guarantee will we have that a new hotel group will have any interest in being a Best Western. Would the municipality limit potential Investors to only those that want to open under the “Best Western” name. Let the people that are prepared to put up $10-12 million pick the name for their hotel.

Then the Mayor talks about a decision regarding the clearing of the property must be made shortly. He is wrong a decision of that significance, should be made by the next council comprised of seven people with a clear mandate from the public.
The municipality in the Medican deal allowed $800,000 for the demolition of the building. That would be roughly half of what this municipality has in reserves, they could take out a loan for that amount. Are those decisions a council should be making in the last two months of it’s mandate? How long before a new hotel developer comes in, how long before the municipality recoups it’s money?

Who will have these answers I don’t know but I do know I will not be listening to the Mayor’s predictions I will finish with a quote from his Oct 2012 Mayor’s corner:



Oct 17, 2012 the Mayor states "I am pleased to announce that after months (and months) of work we have as promised, resolved the problem surrounding the Crowsnest Learning Centre and "old" hospital facility. The new hotel restaurant truck stop complex -is a go! The last few legal details are being ironed out and early next month we and the developers are looking forward to holding a public session to gather your input as to what you would like to see happen"


Note: Cost of administration $4325 per day

31 comments:

Anonymous said...

The last quote from the Mayor told us he is way out of his depth in business. There was never a concrete deal that a business person could recognize.
They had a construction company looking for work and a "site finder" looking for a fee. Unfortunately, they have spent lots of our scarce tax dollars on lawyers peddling this deal to us poor taxpayers.
Hopefully, come October, we will see some people who can count tax dollars and have a basic understanding of where the money comes from.

Anonymous said...

The problem is that this council does just about everything ass backwards. So unless there is a major shift they will spend that 50k and also enter into an agreement to tear down the CLC. This is what the mare says he wants. Has anyone seen the lemmings not follow. How much more damage can these guys do in less than 3 months.
Someone also mentioned today the electrical sale is still in the works. Anybody know if there is any truth to this.

Anonymous said...

I believes the $50K is actually a fee for the "site finder" for services rendered, rather than a franchise fee. More smokescreens and subterfuge by Decoux, just like with his sudden eagerness to demolish the CLC before his term ends? Weird happens all around that reek of desperation and cover up.

Anonymous said...

From the RFP, #16, P.9 :
"Proponents must submit evidence of sufficient financial capacity to carry the hotel project to completion. The Municipality will not consider submissions that do not provide the financial information requested."

The press release says:
"The Vachon Group, who is still the official applicant for the hotel development ..."
Does that mean Vachon (a one man start-up consulting company) was the original proponent? But the contract was with Medican.

Bruce's Bray:
In the meantime, the Medican investors took their money and went elsewhere with it.

Anonymous said...

If Medican was the principal and took their money elsewhere, how can the mayor then blame everyone else for his failed project. The municipality is not in the hotel business. It is the developer, investors, whoever.

He is a narcissist unwilling to admit he and his followers bought a pig in the poke. Excuses, excuses and " it's someone else's fault". Ridiculous.

Anonymous said...

Harry just asked Emile about this:

http://emilesaindon.wordpress.com/2013/03/04/time-to-compare-past-and-present/#comment-333

Another question, is the BW approval based on designs and plans owned by Medican/Vachon?
If so, "our right to build a Best Western" would be worthless without the plans.

Anonymous said...

Well what's $50,000 we spent probably 10x that on this silly logo.
Whatever happened to Mountain Freedom especially "FREE"

Anonymous said...

Medican investors? Medican was looking for investors. Poor Bruce in his Mayor's Corner got it all backward. Only a clean sweep will stop all these consulting dollars marching out of here.

Anonymous said...

Maybe it was the ratepayers petition that derailed the Medican deal?

Anonymous said...

anon 2:44 Nice try, but the petition has been around for about 8 months. Also if the mare could of blamed the petition he would have. Simply put, council signed a crappy deal with a crappy company and anyone with half a brain recognized this as the details came out. Council was simply desperate for some good news. They remain desperate and this is why we are discussing this latest news. Sad!

Anonymous said...

Wasn't Medican going to be the lead sponsor for the Jamboree this summer?

Anonymous said...

Dean,
You covered all the bases with that post. What it not clear is if the Mayor is planning on, what he perceives as buying a ticket to the 'Best Western Club' for $50K or flipping that same money to Vachon to retain them in their grasping at straws approach. (He is very vague in his statement)

“At this point we are still working with the Vachon group (hotel finders) to attract a Best Western or other hotel chain to build. In order to retain our right to build a Best Western for two years, we need to consider putting up $50,000.00. A decision regarding clearing the property will also have to be made very shortly”.

It is entirely likely that our $50K will ultimately become part of a package attracting another pennieless 'get rich scheme'.(And costing us another fortune in promotion and legal fees)

Worst case; we also enter into a binding contract, for demolition, before the Oct. 21 election.

What really scares me is that council appears to be treating the Vachon Group as yet another consultant and it seems that they cannot survive without each other.

Anonymous said...

Short memories folks remember all the hoopla just three short years ago. We voted for change; moving into the 21st century; there was stuff I read in the papers; on the blogs and Facebook that made me want to puke.
Well folks I am sure everybody was just has excited when they left Southampton back in 1912 on that big un sinkable boat. Residents of the CNP unlike them unfortunate souls you will pay for your choices not just on one chilly April night. You will pay again and again for years to come. This October when politicians yap about change have the common sense to ask "what" kind of change.

Trevor

Anonymous said...

The mayor and council are WAY OUT OF THEIR mandate which is to provide policy and perhaps oversight to the administration. The deal flopped, admit it and move on with the other municipality business at hand. He is way out of his league, lacking the training, experience and especially business skills to become a real estate tycoon. Oops, I forgot, there always consultants out there ready to extract even more dollars from the coffers.

Anonymous said...

Check out the website:
groupvachon.com/

Looks like it is now a zero-man company.

The Group|Vachon logo is still on the "About" page and this is in the HTML page source:

meta name="description" content="Hotel Management services, Real Estate services"

The Doomsayer said...

As to Anonymous @ 4:47 comment on Group Vachon, that's not surprising.
Check out www.landstudio.ca the company responsible for the design on the proposed new entrance monuments. All it has is this;
LAND[architecture]STUDIO
355 Woodfield Road SW
Calgary AB
Canada T2W 3V8

T 403 701 1749
F 403 984 8455
E info@landstudio.ca
plus ...this site currently under construction

Makes you wonder exactly what kind of "fly by night" groups Emperor Decoux & cronies are coming up with?

Anonymous said...

Nice research K. (It could only be you).

Diane has a website heralding her acquisition of a diploma, and then her CV wreaks of falling from grace... fast. (Just my opinion, but this is not really indicative of a professional with "experience"). Where does Bruce get this talent?

Maybe he should get another constant to advise him upon hiring consultants?

Anonymous said...

http://penrosecontractors.com/penrose-hospitality/executive-summary

"With over 20 years experience in the select service and boutique hotel segments as owner’s representative, regional manager and general manager, Penrose Hospitality Inc Vice President Christopher Vachon has a track record of opening profitable and award winning hotels."

Anonymous said...

Not to knock Diane's ventures.

"an active realtor in the province of Alberta and is a Can fit Pro certified fitness trainer. She consults with companies such as Air Canada, the Government of Canada, Marriott and Hilton Hotels, the London Free Press Club, Survivor Boot Camp (former Owner), and the University of Western Ontario.

Was she paid to consult with the Government of Canada and stated companies such as Air Canada, the London Free Press Club and the UWO except maybe on a fitness perspective?

I don't think that these entities were interested in hiring a newby hotel developement consultant, nor (it would seem to me) would any of them have any interest in attracting a hotel. (perhaps their idea was to gain ideas on interior design, or employee fitness etc, which is also part of the listed qualities)

There are no references as to hotel development at all on the site.

Anonymous said...

6:37 :
Sorry, should have mentioned, the site used to feature Vachon's hotel consulting business on the main page with Diane's realty on a subpage. (It looks like it was changed in a hurry - if I click on the "About" tab I can't see how to get back to the main page.)

But now Vachon works for Penrose:
"Tyrone Schneider's Overview

Current
CEO at Penrose Group of Companies Inc.
Chief Restructuring Officer at Medican General Contractors
Past
CRO/CEO at G. Raymond Chang Ltd, Color Ad Packaging Ltd
Owner at More Business Solutions Inc
Alderman at City of Medicine Hat"

http://ca.linkedin.com/pub/tyrone-schneider/14/192/388

Anonymous said...

6:37 wrote:
"There are no references as to hotel development at all on the site.

Websites can have "meta tags" that are not visible on webpages, but Google and other search engines may use to classify them.

groupvachon.com took out the hotel related content but neglected to remove the hotel related meta tags.

No big deal, just a trace of the change in case you did not see the earlier version of the website.

Anonymous said...

PENROSE HOSPITALITY INC. Named Alberta
Corporation Incorporated 2013 MAY 02 Registered
Address: 1500, 850 - 2 STREET SW, CALGARY
ALBERTA, T2P 0R8. No: 2017462496.

Corporate Registry
http://www.qp.alberta.ca/documents/gazette/2013/text/11_Jun15_Registrar.cfm

Anonymous said...

Is this ever getting messy so we have Medican that comes in here and makes a deal with the MCNP. Then they bring in Group Vachon who is working for? Medican-MCNP. Then suddenly a letter shows up from the Penrose Group which is now Medican? Then Medican disappears from the picture and now we find out that Christoper Vachon is working for the Penrose Group of Companies. Can anybody figure this mess out?

Brian

Anonymous said...

Just a heads up, that Dean has a new poll going on the right hand side. (It doesn't show up very well on my computer, I have to scroll to notice it, hence, this post.)

Get your votes in!

Anonymous said...

Brian you are right this is such a mess.
Wonder what they spent on lawyers? those 80 plus revisions to the contract. Plus now a new contract will have to be done with the next buyer. WOW

Anonymous said...

It sure looks like Bruce is not responsible with taxpayers’ money. Putting up a deposit to secure a hotel franchise for a specific hotel brand is irresponsible. What if future investors want to build a different hotel?
This whole Medican hotel fiasco illustrates our administration’s total inexperience with basic business concepts. We need people on council who can use basic reason and can do basic math. We are lacking in these qualities with the present council.

Anonymous said...

5:42 :
They've had the landstudio domain since 2007.

http://whois.net/whois/landstudio.ca

Anonymous said...

The level of stupidly is reaching new heights here. Bruce/brian have no business committing the next council to having to make a choice between going with Best Western or losing $50,000 of taxpayers money.

Anonymous said...

Brian, I'll try to explain the mess using this.....

PENROSE HOSPITALITY INC. Named Alberta
Corporation Incorporated 2013 MAY 02 Registered
Address: 1500, 850 - 2 STREET SW, CALGARY
ALBERTA, T2P 0R8. No: 2017462496.

So, Christopher Vachon I would think is a consultant for or even has something to do with running these companies. There is no law saying you can't work more than one job. Starting a business well a shady one, not hard either, rent office space, call that your business and go into a registry office and register it or pay a lawyer to incorporate it. Finally get a GST # and for the cost of like $5,000, you too can look like a giant corporation and fleece unsuspecting people everywhere. Anyone notice a trend how these kinds of people are the only ones who even want to come near CNP to do business. Should tell you something about the reputation we've gotten.

Anonymous said...

Dean - who was it that pushed for the closure of the CLC - to turn it n to the derelict, that as a community we are trying to (unsuccessfully) deal with now?

Anonymous said...

What are you talking about 11:34 the building did not turn into a derelict 3 years ago. Exterior looks almost the same and I expect the third floor where the cadets were is only worse. Remember all the mold and rats at the food bank.
The "derelict" is probably 30 years old.
Also keep in mind that 75per cent of us voted to close the place.