Sooke finds $500,000 savings in new hotel deal
Nov 21 2012
Sooke will save nearly $500,000 under a new deal with Prestige Sooke Holdings, owners of the new $50-million Prestige Oceanfront Resort hotel.
Sooke had partnered with Prestige to encourage the construction of a hotel in the municipality. Under the five-year partnering contract, the district had agreed to pay $300,000 a year beginning in 2011 to rent hotel conference space.
The new agreement will see the payment reduced to $237,000 for 2013, 2014 and 2015. In 2016, Sooke will pay a fee of just $1 for use of conference facilities.
Sooke council had its lawyers, Lidstone and Company, review the deal after the November 2011 election.
"We felt we were obligated to really look at it in detail to really see if there was an opportunity for relief because there seemed to be a few issues that had to be dealt with," said Sooke Mayor Wendal Milne.
Other changes include:
? Under the original agreement, Prestige was to contribute $200,000 toward construction of a pier at the hotel. It was built at a cost of $180,000, so the hotel will reimburse Sooke $20,000.
? Prestige will pay the district $7,360 for outstanding building permit fees, which were calculated incorrectly.
? Extra infrastructure costs incurred by Prestige prior to December 2011 on the boat launch ramp and pier area - estimated at $294,903 - have been reduced to $256,438 through negotiation. Sooke will pay Prestige over two years.
? The $63,285 in outstanding development cost charges owed by the Prestige will be paid immediately to the district. Rather than being paid at the building permit stage in 2009, the hotel had an agreement - made contrary to regulations - to pay by offsetting the amount Sooke was to pay for conference space.
Coun. Rick Kasper, Sooke's finance committee chairman, said the reduction in the municipality's rent for conference facilities was possible because they are about 21 per cent smaller than the 400-person occupancy limit in the original agreement.
"It's way better," he said. "It's almost half a million dollars in savings."
Both Kasper and Milne said the facility is well used.