Requested by the area's business community for years, the hotel will be a five-storey, 65,057-square-foot Holiday Inn Express, according to city documents.
However, project officials concede the first phase of the public-private partnership development - which, along with the arts centre and hotel, includes plans for a senior's residence and condominium and some residential development - is well behind the schedule first envisioned when the deal was announced in 2006.
"The economy has had an effect," said Richard Abboud, an Orleans native and president and founder of project developer Toronto-based Forum Equity Partners Inc.
"It has affected availability of capital, both debt and equity, for potential development partners. And, in some cases, it's had an effect on demand as well."
In 2006, the city selected Orleans Town Centre Partnership, a consortium led by Forum that also included Aecon Buildings, Johnson Controls Inc./BLJC and Lemay & amp; Doyle Architects, to develop the project.
The city planner currently overseeing the file was away last week and unavailable to provide details about the nature of the agreement between the municipality and Forum. However, media reports published at the time broke down the deal into three steps:
- The developers would buy 19 acres of city-owned land and the 70,000-square-foot Orleans municipal building for $12.1 million, while the city would pay $3.1 million for infrastructure;
- The developers would borrow $27.8 million, backed by a city promise to lease the space it occupied in the Orleans municipal building.;
- The city would lend the developers $9 million, with no interest or principal payment for 30 years. After the 30 years, ownership of the arts centre and the land on which it was built would return to the city.
A 2006 city council report said the partnership's proposal "provided evidence of the ability" to complete $170-million-worth of construction in phase one by 2009.
"Through negotiations, the city will ensure that suitable performance requirements are in place to encourage OTCP to complete this work by 2009," the report said.
But as city councillor Alex Cullen put it last week, "the economy kind of got in the way."
Coun. Cullen, who voted against the plan in 2006, said the city provided the infrastructure, but is not getting the promised payoff.
"That is part of the problem with these kinds of P3s. You are left hanging on a promise and if the economy sours, as ours has, you can be left hanging," he said.
However, the delay hasn't dampened enthusiasm among community and business leaders.
Orleans Coun. Bob Monette noted development plans are progressing and said everything initially envisioned will become a reality.
"Like anybody else, they've been through a recession and it hasn't been easy."
He said the entire project, which includes additional residential construction as well as office towers, will have an estimated construction value of $230 million. This will create jobs for a large number of tradespeople and, once completed, leave a lasting employment base, he said.
Similarly, Orleans Chamber of Commerce executive director Peter Stewart said he recognizes appropriate market conditions are needed for the development to proceed.
He said the local business community has been advocating for a hotel in Orleans for years and noted it is one of the amenities companies look for when choosing a new location.
With the town centre Holiday Inn Express in the planning stages and another - the four-storey 63-room Best Western at Tenth Line Road and St. Joseph Boulevard - under construction, Mr. Stewart is looking ahead at the office buildings to be constructed in the second phase.
Currently, he said, small businesses in expansion mode and looking for additional space are generally forced to build new or lease space west of Orleans. This, he hopes, will soon change.
"If somebody puts (an office building) up, and it was filled right away, they would go and put a second one up. Then all of a sudden we would have some of the bigger developers looking out here and saying, 'Wow. Maybe we are missing something out here.'"
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ORLEANS TOWN CENTRE DEVELOPMENT: PHASE ONE
Shenkman Arts Centre: The 86,000-square-foot building, constructed by Aecon at a cost of $37 million, officially opened in June.
Status: Complete.
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Hotel: A development application on file with the city shows it to be a five-storey, 65,057-square-foot Holiday Inn Express. A city councillor said there will be an official announcement in the coming weeks.
Status: Comment period in progress.
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Residential development: Two development applications filed with the city remain open. One calls for 250 apartment units; the other is for a four-storey, 41-unit affordable apartment building.
Status: City records show both applications are on hold. The lead developer said construction on 200 units will commence next year, at the latest.
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Senior's residence and condominiums: More than 200 residential units.
Status: Timeline will be "better known" this fall.
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