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Feb. 6, 2023

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Port, Red Lion call off exclusive talks

Hotel chain still in play, but other developers can make proposals

By , Columbian Port & Economy Reporter
Published:

The Port of Vancouver and Red Lion have ended exclusive negotiations about building a new hotel on the port’s Terminal 1 property, adding a new twist to an ongoing effort to rejuvenate the historic site west of the Interstate 5 entrance into Vancouver.

The port and the hotel chain mutually agreed to call off the negotiations after about a year, Magan Reed, a spokeswoman for the port, said this week. Now, the port expects to open the process to other hotel developers by issuing a request for proposals in about two months, she said.

Reed said the port expects Red Lion, which operates the Red Lion Hotel Vancouver at the Quay at the Terminal 1 site, to submit a proposal as part of the port’s upcoming solicitation process. “It was mutually agreed that ending the exclusivity agreement would move the project forward,” Reed said in an email to The Columbian, “and Red Lion is confident that they’ll be able to meet the qualifications that we put out in the (request for proposals).”

Next month, Vancouver will say goodbye to the Red Lion Hotel Vancouver at the Quay, a landmark on the waterfront since the 1960s. The hotel’s last day is Oct. 31. Its lease with the port expires Dec. 31.

The cancellation of closed talks between Red Lion and the port comes amid other moves in the hotel market — some connected to Red Lion, others not.

Red Lion Memories

The Red Lion Hotel Vancouver at the Quay, a landmark on the waterfront since the 1960s, will close at the end of October. We’re collecting memories from readers. All responses will be published online (though we reserve the right to edit or omit if inappropriate material is included) and some will be included in print with stories about the closure. Share your memories at columbian.com/red-lion.

Barry Cain, president of Gramor Development, has a letter of intent with a hotel as part of a larger redevelopment of Vancouver’s 32-acre waterfront site, which borders the port’s Terminal 1 property. He said Wednesday that although he’s talked to Red Lion over the years, the hotel is not involved in Gramor’s waterfront project. The hotel Gramor’s working with, Cain said, is “a great brand.”

Meanwhile, Red Lion’s acquisition in April of the GuestHouse International and Settle Inn brands could have consequences for the port’s Terminal 1 site.

That’s because the deal includes a “Vancouver opportunity,” according to a recent federal regulatory filing by the publicly traded Red Lion. It allows the CEO of GuestHouse International LLC, Brendan Watters, to pursue development of a new hotel on the port’s Terminal 1 parcel. Such a hotel would rise under one of Red Lion’s several brands.

Pam Scott, a spokeswoman for Spokane-based Red Lion, said this week that Watters, a hotel industry veteran, is “particularly interested” in Red Lion’s Hotel RL brand, which the company launched in October 2014.

Hotel RL is an “upscale lifestyle brand,” the company said in its most recent regulatory filing with the U.S. Securities and Exchange Commission. It’s targeted “for the top 80 U.S. urban markets” and is “inspired by the spirit of the Pacific Northwest and designed for consumers with a millennial mindset.”

Scott said Red Lion wants to see a new hotel go up at the port’s Terminal 1 site, but it’s up to the port. “We’ve been very public about the fact that we want to have a branded hotel there,” she said. The port knows “we want to have a branded hotel, but that process is really in their hands.”

‘Right to develop’

Reed, the port spokeswoman, said the port is still working with consultants “to nail down the exact details” of the request for proposals to develop a new hotel.

The end of exclusive discussions between the port and Red Lion comes as Red Lion has busied itself with business changes. Those changes include its announcement in April that it had acquired the intellectual property assets and all hotel franchise license agreements of GuestHouse International LLC for $8.5 million, plus a potential additional payment of up to $1.5 million.

“The acquisition will expand (Red Lion’s) presence across the country by adding two recognized hotel brands with 73 GuestHouse International and Settle Inn & Suites franchise license agreements,” the company said in a news release. The transaction “will more than double the (Red Lion) brand portfolio from 57 to 130 hotels in 30 states.”

The acquisition includes a provision allowing Watters, the GuestHouse CEO, to pursue development of a new, Red Lion-branded hotel at the port’s Terminal 1 property. If Red Lion “obtains the right to develop a hotel on property owned by the Port of Vancouver,” the company said in its regulatory filing, then it will assign Watters to carry out the project.

For its part, Red Lion would have the right “to enter into a franchise with the owner of the hotel” and to “enter into a management agreement with the owner of the hotel.”

Reed said Katy Brooks, the port’s director of economic development, has spoken to Watters but not specifically about Red Lion’s Hotel RL brand.

Cain, the Gramor Development president, announced last week during a ribbon-cutting ceremony several new deals for buildings as part of a larger plan to transform 32 acres on Vancouver’s waterfront into a $1.3 billion mixed-use development.

One of those deals includes a letter of intent signed by a new hotel with local connections. Although Gramor has talked to Red Lion on and off for the last nine or 10 years, Cain said, “frankly, the brand is not what it used to be … they weren’t our first choice.”

The hotel that’s in play for Gramor’s Vancouver waterfront plan, Cain said, “will bring recognition to the project.”

“We’re really pleased with the situation we’ve got,” he said, noting the name of the hotel could become public in a month or so.

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