The Port of Vancouver has leased its hotel, squaring up the first nails to hammer at its redevelopment of 10 acres along the Columbia River.
Port commissioners voted 3-0 Tuesday to enter an agreement with T1 Hotel, a corporation owned by Rick Takach, who also owns Vancouver-based hotel development company Vesta Hospitality.
The hotel will offer at least 150 rooms and parking spaces west of the former Red Lion Hotel Vancouver at the Quay. The deal locks T1 Hotel and the port into a 50-year lease, with rent paid as a percentage of room revenues.
Port officials expect to make $25 million over the lifetime of the lease. Mike Schiller, director of business development for the port, said a rate, versus a flat fee, allowed them to get the most revenue. Takach said it helps both sides cooperate.
“The better we do, the better they do,” he said.
The port won’t make any money off the restaurants or shops that the hotel might have. The hotel is expected to hire 80 people.
With the lease signed, the port now has its first new building on the books at Terminal 1, its vision for apartments, restaurants, offices and a public market near the shores of the Columbia.
Schiller, who has been involved with the Terminal 1 project since 2015, called it an exciting development.
“The commission’s vision is for this to be a community gathering place and a community focus. That’s the excitement that we at the staff feel, to translate their vision that they gave to us several years ago,” he said.
The Vancouver City Council endorsed the Terminal 1 master plan in June and has final say on any construction permits at the site. Takach said he expects they will pay close attention to the hotel permits, since it will be the “entryway” into the city and state.
“I’m sure there are a lot of people that are going to want to have a lot of input,” he said.
Still, the hotel will be shoulder-to-shoulder with other projects.
Terminal 1 is nestled between the Interstate 5 Bridge and The Waterfront Vancouver, an even larger project spearheaded by Columbia Waterfront LLC.
Two other hotels are expected to sprout nearby, too. Hotel Indigo, from Kirkland Development, is reportedly set to break ground this winter; and Hyatt Place, from Evergreen Hospitality, is just waiting for the city’s OK to start construction, according to developers.
Takach said he expects both hotels will be built before his — but he’s not worried. “If they proceed, I may be the last one out of the ground,” he said. “But, I really like my brand. I like my site better.”
Construction won’t start until next summer at the earliest. Engineering, design work, and finding the contractors and management companies come first, Takach said.
They also have to get the go-ahead from Marriott Group. Even though they have pitched the hotel as The AC by Marriott since May 2016, they have yet to formalize it with Marriott’s heads of franchising and pay an estimated $80,000.
“I didn’t want to spend $80,000 and then have (the port) say, ‘You know, we’re not going to do it,’ ” Takach said.
Construction will cost an estimated $40 million, according to a Port of Vancouver press release. Takach said he will secure funds from an investment group in Ohio. He also plans to sell ownership in T1 Hotel. He is currently its sole owner.
Columbia Shores, at 110 Columbia St., will have to be demolished to make room for the hotel. The port owns the building and the land, and the tenants will have to move. But they won’t know when demolition will take place until it’s clear when the hotel is ready to go.
“The timeline of the construction of the hotel hasn’t been firmed up, so we don’t have a firm timeline for the demo,” said port spokeswoman Abbi Russell.
Schiller said the port staff will focus on a lot of the particulars of the other aspects of Terminal 1.
“It’s an expansive project, however you look at it,” he said. “We’re looking at some design iterations and gathering the information we need to make internal presentations to leadership here, and update the commission as well,” Schiller said.