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

Parents call for change to health laws after Oak Bay teen’s death

Accidental overdose has Elliot Eurchuk’s parents seeking change to B.C Infants Act

Tsawout hosts Saanich Peninsula community leaders at blanket ceremony

Reconciliation event meant to share the Indigenous exerience

WATCH:First responders score first, take inaugural Challenge Cup in Oak Bay

Ice hockey game raises funds for Cops for Cancer, encourages positive interaction with youth

Amazing Race Canada kicks off at Hatley Castle

Popular reality TV show will premiere later this year

LGBTQ advocates turn Victoria SOGI protest into dance party

Counter-protest outnumbers anti-SOGI activists on lawn of B.C. legislature

WATCH:First responders score first, take inaugural Challenge Cup in Oak Bay

Ice hockey game raises funds for Cops for Cancer, encourages positive interaction with youth

As Osoyoos Indian Band flourishes, so too does Okanagan’s wine tourism

Indigenous practices have driven growth of South Okanagan’s wine history and agricultural influence

Judith Guichon steps down as Lieutenant Governor of B.C.

Election decision didn’t make her best moments from the past six years

Vancouver to rake in $30 million in empty homes tax in first year

The tax is the first of its kind in Canada, and was intended to address the city’s near-zero vacancy rate

B.C.’s snowpack continues to increase, melting delayed

River Forecast Centre official says sudden melting further into the season could cause flooding

Another B.C. First Nation voices support for Kinder Morgan pipeline

Simpcw First Nation claims people living on one-third of pipeline route support the project

Scooter crash leaves Island man with critical injuries

RCMP said a truck was making a left-hand turn when it collided with the scooter travelling through the intersection

Prankster broadcasts fake nuclear threat in Winnipeg

The audio recording on Sunday warned of a nuclear attack against Canada and the United States

ICBC reform aims to slow rising car insurance costs

‘Pain and suffering’ payouts to be capped, major injury limit to double

Most Read