Fortis Properties owner/operators of the Delta Hotel has an application before the City of St. John’s to initiate an estimated $15 million expansion at its existing New Gower Street site.

The project, expected to get underway this spring and be completed in 12 months, involves the construction of a 12 storey structure with 126 rooms on the western side of the Delta toward Springdale Street. John Walker, president and CEO of Fortis Properties said since the company acquired the Delta in December 2002, the facility’s “performance has exceeded company expectations.”

“The expansion of this property will enable us to meet the market demands and attract additional group convention and conference business to the city,” Walker said.

St. John’s Coun. Frank Galgay, whose Ward 2 encompasses the downtown core, said the hotel’s expansion plan is good news, a project that will “add to the increased need for accommodations, especially for major national and international conferences and expansion in the tourism industry.” The expansion will also result in “a source of (new) tax revenue for the city,” he said.

Once completed, the expanded wing of the hotel will raise the room count to more than 400, a plan that will result in the Delta becoming the largest convention hotel in the Atlantic region.

Mike Buist, general manager of the Avalon Convention and Visitors’ Bureau said when groups such as Fortis build or expand existing hotels they do their homework. “If you look at the hotel statistics in our destination over the last four or five years, there’s a definite growth pattern and I think everybody is looking for that to continue,” he said. “It’s tremendous news.”

Based on in-season statistics, May through October there are many nights in St. John’s when the accommodations sector is “over sold” he said. “We have never tracked out turn away where people didn’t come because they couldn’t get bookings,” he said.

Buist said the expansion of existing hotels and establishment of new ones are also driven by increased activity at the St. John’s convention center a building that draws major conventions with up to 1500 delegates. While there’s demand for in-season accommodations Buist said the big challenge will be filling some of the void in the winter period – November to April.

“Without a ski hill and without a major winter product we’re going to have to really devote resources to what I refer to as event tourism sport and cultural to help fill the rooms in this off-season,” he said.

Statistics indicate there are about 1700 accommodation rooms in the city through hotels, motels and bed and breakfast establishments with an estimated 300 to be added over the next 12 months through the Delta expansion and establishment of new hotels at Bell’s Turn/Higgins Line, Kenmount Road and Downtown St. John’s.

Buist said the 2003-04 winter season is a good example of where the accommodation sector benefited from event tourism with the city hosting the Under 17 World Hockey Championship, the East Coast Music Awards, Hospitality Newfoundland and Labrador convention and the world curling tour scheduled to begin March 31 in St. John’s. “It doesn’t really matter what it is, as long as we can put heads in beds,” he said.

Considering the Delta expansion 1,000 square meters and adjoins a residential district the city requires the proponent conduct a land use assessment report a document that will have to address things like view planes, traffic and noise.

Aside from the parking space that currently exists under the Delta Hotel and adjacent Cabot Place, Fortis Properties plans to provide above-ground parking near the new wing for hotel guests. Zoning isn’t an issue because the area is already classified as commercial central office with a hotel being permitted in the zone.

Galgay said it’s important area residents in particular get an opportunity to have input in the development plan. “When the land use assessment report is submitted to council it will be reviewed by City staff,” he said. “The report will be advertised and made available to the public for review and commentary before it is finally presented to council for approval.”

Buist meanwhile said increased expansion in the hotel sector will lead to about 300 new full time jobs and various spin-offs including benefits to the construction industry.

The Telegram. Thursday, March 25, 2004. Craig Jackson.

A clerical error that resulted in the City of St. John’s failing to invoice Brink’s Canada for designated parking space has proven to be somewhat costly. The city billed the armoured vehicle service in 2000 for $3800 to cover the annual cost for designated permit-parking space in front of the Bank of Montreal on Water Street.

Due to what the city claims is a clerical oversight, no invoices were forwarded to Brink’s for the years 2001-04, meaning $11,400 in lost revenue for those years alone. Councilor Paul Sears, chairman of the City’s police and traffic committee said Brink’s has since been invoiced for the outstanding bill. But according to the city, the company refuses to pay the bill and that will lead to the elimination of the designated parking area. Asked if the city plans to pursue legal action, Sears said the city solicitor’s department is going to have to review what, if any action, can be undertaken.

Securicor, another armoured car service, requested the waiving of parking permit fess for the company while doing business on Water Street. City councilors rejected that request Monday. Councilors have agreed to consider the installation of a loading zone where Brink’s has traditionally parked in front of the Bank of Montreal. The local Brink’soffice referred Telegram calls to their head office in Toronto. No there could be reached for comment.

Sears meanwhile said council has decided to seek the input of the Downtown Development Commission (DDC) about the loading zone proposal. Further the at large councilor said the city plans to undertake a review of leading zones along Water Street, from Prescott Street to McBrides Hill as part of the consultations with the DDC. The police and traffic committee has noted no other downtown businesses – other than Brink’s Canada – enjoys the benefits of designated parking space on Water Street which is a fair comment Sears said. He added however city councilors and staff made a decision in 2000 to set aside the space for Brink’s to load and unload money. “If you are asking me as a councilor whether any one business on Water Street should have parking privileges over the others, my answer would be no,” Sears said.

DDC Chairman Bill Mahoney said Tuesday his group wouldn’t get involved in an issue between a private firm such as Brink’s and the City. But Mahoney said the commission looks forward to future discussion with the City on the loading zone issue. “The loading zones not only impact the businesses that are trying to do business in the downtown, it impacts all those who work and shop in the downtown as well,” he said. The argument has been made by some people that a person dropping into a store for five to 10 minutes should be permitted access to a loading zone. “I’m not sure that’s correct,” Mahoney said noting arguments can be made on both sides of the issue. “We certainly welcome the opportunity to have good discussions with the City around parking issues in the downtown.”

As for downtown parking in general, Mahoney said the DDC has addressed numerous issues with the city in the past. “We’d like to see more creative solutions applied to the parking problems,” he said. “We don’t have any exact answers but I think we really have to step back from it and look for solutions that can provide a more global approach to parking in the downtown. That may involve things like satellite parking and shuttles to the downtown. It sounds, perhaps, a little grandiose but I think we need to explore those kinds of options.”

TheTelgram. Wednesday, March 24, 2004. Craig Jackson.

The former Bank of Nova Scotia building, located at 291 Water Street was auctioned at St. John’s City Hall Tuesday for less than half its assessed value and more than $600,000.00 less than the price it was offered for an earlier city tax sale.

The property – assessed at $500,000.00 – was bought by Bill Mahoney on behalf of Regal Realty Ltd. for $225,000.00. The bidding opened at $50,000.00 after a suggested $300,000.00 opening mark.

The city wasn’t able to unload the building March 2 during a sale of properties that owed back taxes to the capital city. The Water Street property was in arrears to the tune of $833,599.30.

Mahoney said while he was happy to get the building, he had been prepared to pay a lot more than $225,000.00. “I certainly would have (been willing to pay the assessed value), but that’s fine,” he said following his successful bid. “That building is a project.
There’s a lot of work to be done, so now I have a little more latitude in terms of the renovations I’ll do, and I’ll do them more quickly.”

Mahoney also owns the adjacent Murray Premises and O’Dwyer Manor, which house a hotel and apartments, respectively. Mahoney is not sure what he’ll do with the building yet. “I have a number of options available to me, but right now I have no specific plan for the property,” he said. “There are some synergistic advantages I’d have with that property - it fits my complex of properties very well there. “It certainly would make a very nice office building in the downtown. There’s a great demand for Class B office space and that could certainly fill that void. As well, there’s tremendous demand (for) residential properties…”

Linda Bishop, senior legal counsel for the City of St. John’s, said she’s pleased the building was sold, and while the city didn’t recover all the taxes owed, the loss is not significant. She said it’s better for the city if the building is put to use again rather than sitting empty on a prime downtown corner lot.

“He was a very interested party and certainly a businessman in the city who has developed properties and done well, so we look forward to see something go in that lovely building,” Bishop said of Mahoney’s purchase.

Mahoney said he hopes the city will auction off properties that are in arrears more often, since it benefits everybody if empty buildings are renovated and put to use. He said he’s confident there will be some form of activity at 291 Water Street within six months. “The ultimate goal is to get that building occupied, put it to good use, create activity in the downtown,” he said, “and that’s exactly what I intend to do.”

Winning bidders at city tax-sale auctions must immediately pay at least 10 per cent of the total purchase price in the form of cash, certified cheque or bank draft. The remaining balance must be paid within 30 days.

The Telegram, Wednesday, March 17, 2004. Bradley Bouzane.

Investors in St. John’s will get a second chance Tuesday to bid on a downtown office building. The former Bank of Nova Scotia building on Water Street is on the block for unpaid municipal taxes totaling more than $800,000.00. There were no takers two weeks ago, in part because the building’s value is assessed at approximately $500,000.00.

Scott Cluney, Executive Director of the Downtown Development Commission, says since the first auction, calls have been coming in. “The first question is: ‘what about the building on the corner of Beck’s Cove and Water Street, wondering what the status is, is it for sale, is it on the market, what’s going on with it?’” “So I think based upon that and the people who kind of showed some interest a couple of weeks back, this building will definitely go.”

Cluney says while nobody’s declaring that want to buy it, business people on Water Street have been talking about the building’s potential uses. “Redevelopment for office space, perhaps even retail, maybe even commercial/residential-type stuff,” he says. Cluney says the property’s assessed value of is not out of line with other Water Street sites.

Councilor Shannie Duff, chair of the council’s heritage committee, is hearing similar interest. The building is next door to the O’Dwyer block and the Murray Premises. “It seems to me it would lend itself to a number of quite interesting adaptive uses, and in fact right now there’s a fairly high level of interest.” She says.

Duff says she’d love to see the building reconstructed to reflect the adjoining O’Dwyer block, but she admits that would be “dreaming in Technicolor.”

CBC Radio, Wednesday March 16, 2004. Fred Armstrong.

Only one St. John’s property is still up for grabs of the 14 originally scheduled to go on the public auction block at City Hall March 2 as a result of back taxes. The 14 properties were associated with tax bills ranging from $565 to more than $833,000.00, and were advertised as properties about to be auctioned. However, the owners of seven of those properties settled their tax bills between Feb 26 and the date of the auction.

The most expensive property – the former Bank of ova Scotia building at 291 Water Street – remains up for grabs and will be available for less than its outstanding tax bill. Linda Bishop, senior legal counsel for the City of St. John’s, says that the property wasn’t expected to sell at the first tax sale auction because its value is less than the amount of owed taxes. “The taxes on that particular building are $833,000.00 and change,” she said. “The building itself is not even assessed at that amount, so I didn’t expect for anyone to bid $833,000.00 for that building. Now it will go to the highest bidder, so we probably won’t get $833,000.00, but we’ll certainly recover a significant component of our taxes.”

The building is assessed at $500,000.00. Bidding begins next week. Bishop said there are definitely people interested in the building and that interest will likely surface when it goes on the auction block again March 16. She figures potential buyers were at the March2 auction to scope out the competition for the second round of auctioning. “It will be interesting to see who is out there and who is serious,” she said.

Bishop said if the property is sold, some of the money is owed to the province, but she is confident the city will at least collect the principal it is owed. “I am confident the building will (sell) and I’m confident that we will collect our principle amount of the taxes,” she said.

At March 2 auction, buyers had to deposit an amount at least equal to the outstanding taxes owed. They were then given a maximum of 30 days to come forward with any additional funds that might be required to finalize the deal. Bishop said City Hall’s Foran/Greene Room was filled with potential buyers March 2. She also pointed out that the City doesn’t make any money at the auction, explaining that the City tries to recoup the taxes owing. Any additional funds that might come through the sales are used to pay off other agencies. “We don’t get to keep the extra (money)….,” Bishop said. “The City then has to pay that money to other creditors in their order of priority.”

More than $116,000.00 in back taxes was collected from the auction and from people coming forward to pay their tax bills just before the auction. The property at 291 Water Street will be on the block at 10:30 am March 16 in the Foran/Greene Room at City Hall.

The Telegram. Bradley Bouzane Monday, March 8, 2004.

Two proponents involved in separate bids to put a restaurant on Pier 7 at the St. John’s harbour front say they voiced concerns about the building’s original design, but were told the concept would not be changed, which is why they are now speaking out about the controversial development.

They say they are angered by the fact that the St. John’s Port Authority tore down a sail-like frame to accommodate the Vancouver-based The Keg Restaurant, when they had identified the same problems with the design. Javis Roberts submitted a proposal to locate the Atlantis Steak & Lobster Co., a medium to high end restaurant, on the site.

Architectural consultant Paul Emberley represented a client who also submitted a bid when the Port Authority issued a request for proposals. Port Authority and CEO Sean Hanrahan has said no proponents submitted a proposal that would have allowed the port to break even on the investment. But both Emberley and Roberts say they raised concerns about the design repeatedly, saying it was not adequate to house a restaurant and didn’t offer enough space to make such a venture worthwhile.

They say they are now galled that the port authority, which hired Martek Morgan Finch to conduct the request for proposals, has turned around and changed the design for The Keg. Roberts who is also involved in DRL Coachlines said he asked for the design to be changed at a time when the port authority only had the footings in. Roberts operates the Lobster Ranch brand in Halifax. “They said, ‘Absolutely not.’ It had to be the sails (design), they would not change it for anyone. The answer was no, across the board. The only thing they allowed us to do is change something on the stairs,” Roberts told the Telegram.

“It didn’t have enough room….It wasn’t designed properly.” “The problem was, it wasn’t a feasible restaurant,” Emberley said on behalf of his client, who doesn’t want to be identified. “It could only seat so many people. It was not enough to pay for what they would need to make it a viable operation.” Emberley’s client wanted to put a steak house on the site.

Roberts said the authority proposed locating the restaurant’s kitchen on the second floor, which posed all kinds of problems. He’s now considering legal action. He says he has no problems with The Keg winning the deal if the process had been fair to everyone. Four bids were submitted in response to the request for proposals and the port authority deemed them inadequate.

On Feb 28 the Telegram revealed The Keg was getting a lease and the sail-like frame was coming down to accommodate the franchise. “Everyone should have had a fair shot at it in my mind,” Roberts said. “Why would they change the rules after the fact?”

The St. John’s port authority had already pumped about $800,000 into the uncompleted restaurant project when it decided to tear down the framing for The Keg. The port authority insists it will get all the money back including an additional $1.7 million to construct a new building through a 20 year lease agreement with The Keg.

“Something stinks on the harbourfront,” Emberley said. One restaurateur, Chuck Matchim the owner/operator of Chucky’s restaurant on King’s Road in St. John’s has said his associates approached the port authority more than a year ago about the initial design. Matchim concluded the design was unworkable and eventually found another location. Emberley said Hanrahan is wrong in saying no proponents are complaining except for Matchim. He said architect Dave Kelland had a nice design, but it wasn’t big enough to give his client the capacity for a viable restaurant. He said while the authority offered to make minor changes they would not agree to a redesign.

Personally, Emberley thinks the site should have a seafood-style restaurant, something with a Newfoundland flavour. He said if the authority had reissued proposals with a new design in mind, it would have gotten 20 bids. “Mr. Hanrahan please explain how you are going to get the money back,” he said. “I have been in business in St. John’s for over 30 years and if you build a building and then tear it down there is no way you can possibly get your money back. The rational astounds me – not to mention the unfairness to all proponents who submitted proposals on the now torn-down facility.”

Emberley said he raided the design concerns twice to the architect and brought the same problems to Martek. He believes the port authority has acted unjustly. “The proponents to this proposal have spent thousands of dollars in preparation and anticipation….but to have their efforts whipped out from underneath them in this manner is totally unacceptable,” he said.

Hanrahan said Thursday he has received no complaints, either formal or informal.

Pier 7 is the area where D.F. Barnes was originally located, near the Scademia tour-boat operation in the north-west section of the harbour front between Bishop’s and Beck’s coves. Nine seasonal tourist kiosks have been constructed next to the restaurant’s location.

The Telegram. Friday, March 5, 2004. Barb Sweet.

An independent audit should be conducted into the St. John’s Port Authority’s handling of the Pier 7 development, Mayor Andy Wells said Wednesday. “Maybe it’s a question for the auditor general of Canada to have a look at,” Wells said. “From my perspective, there’s a broad policy here. These agencies…they get a revenue stream and then carry out their business. I don’t think there’s enough transparency or accountability.”

The St. John’s Port Authority has been at the center of controversy since the Telegram revealed the authority was tearing down a sail-like frame on the harbourfront in order to accommodate the needs of The Keg Steakhouse & Bar. The port authority had already pumped about $800,000.00 into the uncompleted restaurant project and insists it will get the money back – plus an additional $1.7 million to construct a new building – through the 20 year lease agreement with the Keg.

But some local restaurateurs are upset at how the project was handled in the first place. Sources have told the Telegram that the port authority was repeatedly told during proposal calls that the initial building design restricted them from submitting feasible proposals. In other words, the size and layout of the building would not coincide with their business plans. There have also been concerns that the authority halted a third request for proposals last fall, decided to redesign the building and signed The Keg last week to a 20 year lease without consulting other interested parties about the revised plan.

But Sean Hanrahan, the authority’s CEO said due process was carried out with one public request made for expressions for interest and two public requests for proposals from 1999-2001. Hanrahan also said the request for proposals closed on the scheduled date and results were assessed in the normal course of business. “Unfortunately, there were no proponents that would have allowed the port to break even on its investment – but the process was not halted,” he said Wednesday.

Hanrahan said the authority isn’t required to issue a call for proposals and could have picked whatever restaurant it wanted, but decided to follow due process. “We did have four bids. So four people were interested and I , again, haven’t received anything by way of negativity or complaint from those who bid,” he said. “We simply didn’t have proposals that were financially sound enough to provide a break even point on the investments.”

Hanrahan said the steel from the rejected frame will be reused in the new configuration. “This is such a huge good news story for the city and the region,” he said. “We’re revitalizing public space on the waterfront. We’re creating 140 new jobs. We’re creating almost $40,000.00 in annual taxes. All I am hearing is negativity.”

Wells said he’s been concerned about the port authority ever since it built a new headquarters on prime waterfront land a few years ago. That should be looked into as well, he said. “The harbour is the most important resource to the City and they should not have been allowed – board chairman) Mel Woodward should not have been allowed, with a bunch of political appointments, to waste $2 million (on a new headquarters). It happened.” Wells said.

“The question you have to ask about the kiosks down there (on Pier 7 is) is that a repetition of the same? I don’t understand from a policy or decision making perspective why you would construct a building on spec.”

While the Atlantic Canada Opportunities Agency put $1 million of taxpayers’ money into the overall $4 million project, to fund nine seasonal tourism kiosks and “park-like” landscaping adjacent to the controversial restaurant structure, ACOA insisted in a Telegram story Tuesday that it didn’t provide funding for the restaurant. However, The Telegram has obtained an offer made by Martek Morgan Finch – which handled the request for proposals for the port authority – to a restaurant owner. In that letter, Martek Morgan Finch offered the fish and chips restaurateur a five-month lease in on of the ACOA funded kiosks for $6000 plus HST.

“Kiosks are to be taken as is, and any tenant improvements will be the tenant’s responsibility and subject to landlord approval,” the letter stated. “Should you be interested in operating a fish and chips outlet please advise by noon on Monday, Feb 23.”

ACOA spokesman Doug Burgess said it’s up to the port authority to decide what the kiosks are used for. “We are of the opinion that the St. John’s Port Authority has the administrative experience and the management expertise to conduct their affairs in a responsible way…Those kiosks aren’t that large. Hoe big a ‘restaurant’ is going to go in one of the kiosks?” he said. “We wouldn’t fund a large stand alone restaurant per se, something the size of the Keg that’s being discussed. We wouldn’t fund anything like that – a commercial venture – in an area that’s already being well served in the restaurant trade by a number of operators.”

Chuck Matchim, the owner/operator of Chucky’s Restaurant on King’s Road, confirmed he was approached about the kiosk but declined because of concerns about how the Pier 7 project was being handled. Matchim has already said he approached the port authority more than a year ago about problems with the initial design of the restaurant building. Hanrahan insists that a proponent representing Chucky’s specifically informed him – prior to the termination of the most recent proposal call – that they had found another location.

The Pier 7 development is to accommodate nine kiosks, one of which has now been redesigned for use as a washroom. The original design did not include such facilities.

The Telegram. Thursday, March 4, 2004. Barb Sweet.

ACOA cash not spent on restaurant, official says

The Pier 7 development at St. John’s harbour was approved for $1 million in federal funding, but the Atlantic Canada Opportunities Agency (ACOA) insists none of it went into the controversial restaurant component. “There is no ACOA support for that restaurant,” agency spokesman Doug Burgess said Tuesday. Taxpayers’ money has gone into the redevelopment of the overall sure however. ACOA has doled out $747,000.00 so far for the Pier 7 “park” and the St. John’s Port Authority can collect another $250,000.00 when it submits the appropriate documents.

The original scope of the project submitted to ACOA showed room for an eventual restaurant but ACOA doesn’t fund restaurants, Burgess noted. He said ACOA funded the site’s kiosks because of their tourism potential. The kiosks are adjacent to the restaurant, which has been stirring controversy since the Telegram revealed Saturday that the sail-like frame being constructed for the restaurant was coming down to accommodate The Keg Steakhouse & Bar.

The St. John’s Port Authority (SJPA) had already pumped about $800,000.00 into the uncompleted restaurant project. The port authority insists it will get all the money back, including an additional $1.7 million to construct a new building, through the 20 year lease agreement with The Keg. But some local restaurateurs are upset how the project was handled in the first place. Sources have told The Telegram the port authority was repeatedly told during proposal calls that the initial building design restricted them from submitting feasible proposals. In other words, the size and layout of the building would not coincide with their business plans.

Secondly, there’s a concern the authority halted a third request for proposals last fall, decided to redesign the building, and signed The Keg last week to a 20 year lease without consulting other interested parties about the revised plan. But Sean Hanrahan, the authority’s chief executive officer, said doe process was carried out, with one public request made for expressions of interest and two public requests for proposals from 1999 – 2001.

One restaurateur, Chuck Matchim, the owner/operator of Chuckys restaurant on King’s Road, has said his associates approached the port authority more than a year ago about the initial design. Hanrahan insists that a proponent representing Chuckys specifically informed him – prior to the termination of the most recent proposal call – that they had found another location.

Burgess said ACOA did not encourage any public funding for restaurant development on the site and has no misgivings about what’s going on. “Our projects are evaluated on a project-by-project basis. The focus was an enhancement of the waterfront experience,” he said.

Pier 7 was funded by ACOA’s business development program. The development has had a storied past. In 2000, the port authority accepted a proposal by the Young Group of Cos. to build a retail/office complex with a nautical look on the pier opposite the Murray Premises. The company’s application indicated the three-storey 30,000 square foot waterfront development would cost $2 million to $3 million and was supposed to be finished in 2001. Half a year later it was announced the plan was off.

In May 2003, the authority announced it was proceeding with its own $4 million Pier 7 tourism development plan. Phase 1 consisted of the seasonal kiosks to operate from May to October. The kiosks will likely be used by tour boat ticket sellers, refreshments and crafts people, fish merchants and tourist information personnel.

Phase 2 called for the construction of a 5,600 square foot building shaped like sails with a large glass wall overlooking the harbour to accommodate a pub or restaurant. Grass and seating will surround the area. It’s that original restaurant concept that has seen the wind fo out of its sails. Pier 7 is the area where D.F. Barnes was originally located, near the Scademia tour-boat operation. The north-west section of the harbour front is situated between Bishop’s and Beck’s Coves.

The Telegram. Barb Sweet. Wednesday, March 3, 2004.

The St. John’s Port Authority announced the Keg Steakhouse & Bar will be dropping anchor as part of the center piece of the Pier 7 retail/entertainment complex. The development will mark the completion of the SJPA’s five year, $20 million Port Revitalization Plan. This development, together with the seasonal kiosks, will provide a wonderful public space on the waterfront.

The economic benefits are considerable. 22,000 person-hours of employment during construction, 140 new jobs upon completion, approximately $40,000 per annum in City taxes and the impetus for other development of that area of downtown.

The Keg Steakhouse & Bar is the undisputed Steakhouse leader in Canada, with a total of 80 locations across North America, has a focus on a casual yet contemporary dining experience and in December 2003 as named Restaurant Company of the year an the industry’s Pinnacle Awards held in Toronto.

The Keg Steakhouse & Bar franchise group are made up of Rob Moore, President, Wayne Moore and Leo Power – well known owner/operators of restaurants such as Pizza Experts, Rumpelstiltskin’s, Klondike Jake’s, Fog City and West Side Charlie’s – all of which employ more than 500 people.