Oak Bay Beach Hotel launched

Dynamite blast marks the start of municipality's largest project

Darron Kloster, Times Colonist

Published: Friday, November 06, 2009

Mayor Christopher Causton triggered the first dynamite blast yesterday on the largest construction project in Oak Bay history.

A muffled thump and a rumble underfoot cracked open the granite and the $52-million Oak Bay Beach Hotel project was finally underway.

Seven years after hatching the redevelopment and three years since razing the 80-year-old original, construction of the new Oak Bay Beach Hotel started a two-year timetable that will see a five-star, 100-room hotel and 20 luxury residences built to Gold LEEDS standards on the seaside site.

Shawna and Kevin Walker say a bond offering in March raised $9 million in the first week.

Darren Stone, Times Colonist

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Many of the bricks and beams, fireplace hearths, leaded windows and other memorabilia from the original hotel will be incorporated into the new one -- and the loved Snug Pub is being rebuilt in the same spot, although 14 inches above original grade for better ocean views.

"This is a very significant moment in a long journey," hotel owners Kevin and Shawna Walker told a gathering of media and municipal officials in a steady rain. "It's three years since we checked out our final guest and locked the front door. We didn't anticipate it would take this long ... the world has been a unique and challenging place.

"But two years from now, we throw open our doors and the world can enjoy this beautiful site."

A tough planning phase through Oak Bay council caused initial delays, but the global economic downturn was a gut punch that nearly derailed the project as credit markets dried up and lenders clamped down on construction cash.

The Walkers, however, launched a bond offering in March that was met with overwhelming success, raising $9 million in the first week.

Kevin Walker said yesterday the offering -- which allowed people to invest a minimum of $150,000 in an interest bearing secured bond -- was "fully subscribed," but did not reveal how much of the $52 million in construction cost that would cover. He did say traditional streams of credit through banks have also opened.

The delay may have also worked in his favour in terms of lower construction costs and more available labour.

"Despite the challenging economic times, we saw a huge response to our bond offering," said Walker. "We had calls from people all over North America who wanted to be part of the development, many of whom had a special connection to the hotel in the past."

One of those was Mark Asser, a regular of the pub and a longtime neighbour whose father stayed at the hotel during the 1930s while commuting between Seattle and Vancouver.

Asser and his wife, Barbara, both chartered accountants, sold their home nearby and rented an apartment a few blocks away while they await completion of their unit. "The bond offering was a good vehicle for getting us there," said Asser. He added the delays "were never an issue because of the strength of the site, the property and the owners. We are part of the community."

Nearby residents will have to get used to piercing warning horns and earth shudders over the next four or five months. There will be about five dynamite blasts a day, Walker admitted, as the one-hectare site is "92 per cent Grade A granite."