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It looks like it could have been made by a bomb. And in some ways the gigantic hole that you now find smack dab in the middle of this hard-luck city's historic downtown core did set off reverberations that can still be felt today.

"Quite a sight isn't it?" says Don Stone, a college professor, pointing at the Nanaimo construction site. "It's madness, absolute madness. But in many ways, I guess, it's typical of the kind of decision making that has been a hallmark of this city. It's a shame. A crying shame."

There are big changes under way in this Vancouver Island city and not everyone is happy about them.

On one side are council and half the citizenry enthusiastic about a new convention centre going in downtown as well as a string of new condo towers that will soon ring the harbour.

On the other side is Mr. Stone, founding member of an opposition group calling itself Friends of Plan Nanaimo, and the other half of the citizens, who feel that council's plans are ill-conceived and the most stunning example yet of the kind of indiscriminate planning and development that has contributed to the town's reputation as a dump.

A referendum held on the project two years ago passed by a majority of 52 per cent to 48 per cent.

"I am confident that when we open the convention centre and we get the [condo]towers built people will be saying, 'Why didn't we do this 10 years earlier?' " said Gary Korpan, Nanaimo's mayor and the man who has the most to lose should his spectacular vision for the city ultimately be judged a disaster.

The centerpiece of Mr. Korpan's dream for a revitalized city centre is something being called the New Nanaimo Centre, a combination conference centre, museum and auditorium among other things. Marriott International has signed on to build a tower adjacent to the centre that will be half hotel rooms, half condos. The entire development is a joint project of the city and Suro, the U.S. real estate giant based in Stamford, Conn.

As part of the deal, Suro paid $8.7-million for a big swath of land near the old Civic Arena, (which will soon be torn down) the site where the company will build two condo towers.

The Americans swung a pretty sweet deal. As part of the agreement, the city will pay $3.5-million to replace parking for a nearby park, $1.3-million for a new road to the condos and the park and the costs of hooking up sewer and water services to the site.

Beyond that, the city will also be on the hook for the costs associated with soil cleanup, which could end up being huge. The site was the location of an old foundry for many years, as well as a battery plant and lumber mill.

In addition, council agreed to take off the 15-storey height restriction on the condo towers, which will be at least 20 storeys. The city gets 10 per cent of gross sales, minus reasonable marketing costs to Suro, so there certainly was some self-interest in removing the height cap.

"The mayor thought he was playing in the big leagues with these guys, but they knew they were dealing with a total rube," Mr. Stone said.

Beyond the conference centre and the condo towers being built by Suro, two other condo towers are going up right on the harbour.

One of them is being erected at the site of the once-famous Malispina Hotel, the concrete carcass of which has sat vacant for nearly 15 years, to the embarrassment of everyone.

The proliferation of condo towers is also part of Mr. Korpan's overarching plan to bring the city's battered and depressed downtown core back to life.

You could trace the city's reputation as a dusty, blue-collar repository for the likes of groups such as the Hells Angels, whose Nanaimo chapter has been one of the most visible and controversial over the years, way back to 1849 when coal was found in the area. It turned Nanaimo into one gigantic industrial site. Half the current city is built on top of mine shafts. On top of generations of hard-working labourers, lumberjacks and fishermen too.

In modern times, the 1970s to be precise, giant malls began popping up on the outskirts of town, dealing a severe blow to the downtown core (and leading one anonymous poet to declare: "Nanaimo is an Indian word meaning too many malls.") Despite a major recession in the area in the 80s, the downtown retail sector, as recently as 1996, comprised 34 per cent of the city's total commercial tax base. By 2003, that was down to 15 per cent.

"The studies we did showed two things," Mr. Korpan said. "A convention centre was the best way to immediately improve things downtown, and an influx of seven to 10,000 people would also be needed to support a vibrant retail sector downtown. And that's what those condo towers will help us do."

In the referendum, Mr. Korpan went to the citizens asking for the right to spend $52.2-million on the New Nanaimo Centre, which is to open in the fall of 2007. Skyrocketing construction costs, as well as additional expenditures for things like site cleanup, have already pushed the costs to the up to $72.2-million.

And they're climbing.

"We believe the whole thing will end up costing more than $100-million before all is said and done," Mr. Stone said. "The bigger issue, however, is this council has exceeded the narrow mandate the people gave them in the referendum."

Mr. Korpan, however, has no intention of backing off. No intention of filling in the big hole in the middle of town and starting over. But if he doesn't exactly sound desperate, there is something in the mayor's voice that suggests the city's time is now, that it doesn't have to continue being the butt of everyone's jokes. It has a spectacular harbour, agreeable year-round weather and a great, commerce-friendly position on the island.

"There have been mistakes made in this city over the years which have contributed to an image problem," the mayor said. "I believe that's changing; there is a new optimism in town. People, for the first time in a long time, I think, are seeing the enormous potential that we have. And I think our vision for the next few years is just what this city needs."

Time will tell.

gmason@globeandmail.com