The city's fabled Bayshore hotel is on the verge of being sold for a price that seems to reflect hopes for future development rather than operating the current business, says a principal of a brokerage that worked with one of the unsuccessful bidders.
The Westin Bayshore Resort and Marina, next to Stanley Park on the Coal Harbour waterfront – which has been transformed into a high-end condo district over the past 20 years – sparked a fierce bidding war when the owner put it on the market earlier this year.
It is now being sold to local developer Concord Pacific Developments for somewhere close to $300-million, according to Bob Levine of Avison Young.
"It's trading at a number that doesn't make any sense from a pure hotel point of view," he said. "The value reflects the potential, but it's all a wish and a prayer."
Concord Pacific, one of Vancouver's biggest development companies, has confirmed it is one of the bidders, but won't say if it has been successful.
However, Mr. Levine said that the vendor "is not engaged with anyone" other than Concord.
The most recent city land sale in that range of money was Onni Group's purchase in April of nine hectares on Vancouver Coastal Health's Pearson-Dogwood site for $302-million, where 3,000 housing units are envisioned in city plans.
That's a stark contrast to the 2.4-hectare Bayshore site, which is already largely occupied by buildings.
The city insists that there is no significant development possibility for the small site.
It already has a 511-room hotel and a large wing with convention facilities.
Current zoning allows only a rental tower behind the convention wing and a second 18-storey hotel tower elsewhere; no condos are permitted.
"We were really clear with all six of the companies that came to see us about the redevelopment potential being only those two towers," said Brian Jackson, Vancouver's general manager of planning.
"We've said this is a union hotel with high-paying jobs and convention facilities. A loss of any of that would be a significant concern to us."
As well, Mr. Jackson said, the original wing of the hotel – designed in 1960 by modernist architect Douglas Simpson and a home briefly to eccentric billionaire Howard Hughes in 1972 – is a candidate for being listed on Vancouver's heritage registry, which would offer it some protection from being altered.
"That's a complicating factor," he said.
But Mr. Levine said he heard a lot of talk among those involved in the bidding that potential buyers were "wishfully thinking that somewhere down the road – 10 years was the time frame that kept coming up – there may be a consideration to allow a redevelopment with a smaller hotel."
He said the price was driven up because it's a waterfront site. "Because of its location, people have offered incredible amounts of money, including our clients. And these are all firm offers with no contingencies for rezoning."
The Bayshore was in the news two years ago when it became part of a five-hotel deal with Starwood Capital and partners from the Middle East for $745-million. The Vancouver hotel was valued at $151-million at that point.