Receiver’s report offers first look at troubled hotel

The receiver overseeing the Oak Bay Beach Hotel has offered the first look at the hotel’s financial picture.

  • Apr. 2, 2015 12:00 p.m.

The receiver overseeing the Oak Bay Beach Hotel has offered the first look at the hotel’s financial picture.

The hotel is on an upswing financially since receiver Ernst and Young, appointed by B.C. Supreme Court, took over operations at 1175 Beach Dr. late last year, said the March 26 report.

Following its appointment, the receiver terminated employment of five members of the management team, including Kevin Walker, his wife, Shawna, and their daughter Kate.

Icon Services Ltd. has been working since Dec. 8 on a month-to-month term to manage the hotel. The company receives a base management fee of 3 per cent of the gross operations revenue with a monthly minimum of $30,000 for the first two months, and $20,000 per month thereafter, lower than the 5 per cent management agreement between Bison Properties (OBBH) and Walker Hotel Management.

The hotel went into receivership this winter owing $125 million. As of the report’s writing, the receivers have distributed $612,000 to construction lenders, a group of three organizations owed $60.5 million.

“In order for any creditor subordinate to the Construction Lenders to receive any recovery, the sale of the debtor’s property must generate transaction proceeds in excess of $70 million,” according to the report.

The District of Oak Bay is ranked as a super priority claim in the receivership of Oak Bay Beach Hotel, which owes nearly $800,000 in 2014 property taxes. The receiver commissioned the Altus Group to review and appeal the BC Assessment values which they expect will materially reduce the property taxes to be borne by the hotel in the future.

Website redevelopment is a priority as a primary marketing booking channel with 22 per cent of hotel room nights booked there.  Room reservations for June through September are up 253 per cent over 2014.

The OBBH has a fundraising partnership with the David Foster Foundation. Since its re-opening, the hotel had collected approximately $20,000 from the sale of live theatre event tickets for donation to the foundation that hadn’t been remitted to the foundation as of receivership. Ernst and Young has continued the partnership, honouring the outstanding donations.

Visit ey.com/ca/oakbaybeachhotel online to see all the reports and documents from Ernst and Young.

 

Just Posted

Victoria shatters its oldest temperature record

B.C. sees fourth straight day of record-breaking warmth

Jake ‘The Snake’ Roberts visits Victoria for Comic Con

He says he’s looking forward to the event, but don’t ask him where the snake is

Yarns, string and human hair pose a risk to Greater Victoria birds

Wild ARC handles a number of entanglement cases each year

Overturned vessels, simulated smoke expected in Victoria harbour for Coast Guard exercise

Coast Guard and other first responders will be on the water from 1 - 4 p.m. Thursday

UPDATED: Missing Victoria man found dead in Port Renfrew

Police continuing investigation, death not considered suspicious

After mosque attacks, New Zealand bans ‘military-style’ guns

The gunman killed 50 in a Christchurch mosque

POLL: When do you think the next major earthquake will hit Vancouver Island?

According to seismologists, Vancouver Island is overdue for a magnitude 7 earthquake.… Continue reading

UPDATE: Two avalanches confirmed at Okanagan ski resort, one in hospital

A man has been sent to hospital after an isothermal avalanche at SilverStar March 20

Okanagan man, Yorkshire terrier chased by coyote

Animal sightings have been reported around West Kelowna and the Central Okanagan

Having phone within sight while driving does not violate law: B.C. judge

The mere presence of a cell phone within sight of a driver is not enough for a conviction, judge says

B.C. lottery winner being sued by Surrey co-workers

They claim he owes them $200,000 each, in a lawsuit filed in B.C. Supreme Court in Vancouver

Pot industry welcomes decreased edibles tax, but unhappy medical tax remains

Taxes can increase the cost of medical cannabis by as much as 25 per ceny

‘It has to send a message:’ Broncos families await sentencing for truck driver

Jaskirat Singh Sidhu pleaded guilty to 29 counts of dangerous driving and apologized in court

MPs continue voting marathon as Tories protest shutdown of Wilson-Raybould motion

Multiple MPs have resigned from Trudeau’s Liberal cabinet

Most Read