REQUEST FOR QUALIFICATIONS HOTEL DEVELOPMENT OPPORTUNITY ISSUED: JUNE 7, 2013 CLOSING DATE: SEPTEMBER 30, 2013 AT 4:30 PM W:\Bldgs, Facililties and Proprts\Property Disposition\Station Street\RFQ - Hotel Developer Solicitation.docx 1
INVITATION The Town of Oliver, British Columbia is soliciting proposals from interested and qualified parties for the development of a hotel. The intent is to identify the entity (or team) that has the vision, experience, financial strength and capacity for hotel development. BACKGROUND The Town of Oliver is located in south-central British Columbia, near the south end of the Okanagan Valley. Oliver is approximately 21 kilometres north of the U.S. border crossing at Osoyoos. Oliver enjoys convenient highway access to British Columbia, Alberta and the Pacific Northwest area of the United States. Distance from Oliver, British Columbia Kamloops 272 km or 169 mi Kelowna 108 km or 67 mi Osoyoos 20 km or 12 mi Penticton 36 km or 22 mi Prince George 750 km or 466 mi Vancouver 417 km or 259 mi Vernon 155 km or 96 mi Calgary, AB 719 km or 447 mi Edmonton, AB 1018 km or 633 mi Seattle, WA 530 km or 329 mi Spokane, WA 322 km or 200 mi 2
The Penticton Regional Airport is only 35 minutes drive to the north and provides several daily connecting flights to Vancouver International Airport. Kelowna International Airport, less than two hours from Oliver by road is served by several airlines including Air Canada, WestJet and Alaska Airlines, providing connections to Vancouver, Seattle, Calgary and Toronto for international travel as well as to other Canadian cities, including direct flights to Victoria, Edmonton and Toronto. The Town of Oliver also operates its own local airport within walking distance to many local amenities including the downtown. This airport provides a convenient facility for use by private and small charter flights. Oliver enjoys an average of over 2,000 hours of sunlight each year, providing the perfect climate for outdoor recreation, with many diverse activities and events held year-round. Notably, there are two renowned 18-hole golf courses in Oliver (Fairview Mountain and Desert Canyon) plus an additional five courses within a 45-minute drive. Oliver also offers opportunities for bird watching (annual Meadowlark Festival; Vaseux Lake Bird Sanctuary) as well as exploring nearby natural habitats that are unique in Canada. Options abound for hiking, boating, fishing, mountain biking and horseback riding. Oliver is also referred to as the "Wine Capital of Canada" in reference to its diverse selection of wines offered in the more than 25 internationally recognized wineries located in the immediate area. Many of these wineries are open all year round for tours and visitors, and participate in various spring and fall wine festival events. Agritourism is an expanding industry, with more than 400 farms located in the area, producing a variety of fruits including apples, cherries, plums, apricots, peaches and pears. Winter activities include downhill and cross country skiing, as well as hiking and snowmobiling. Indoor winter sporting activities such as curling, hockey and figure skating attract visitors to the Oliver-Osoyoos area each winter weekend for tournaments and bonspiels. In addition, winter brings a significant population of snowbirds, who seek temporary accommodation in Oliver during winter months as a reprieve from Canadian prairie winter weather. In recognition of the diverse range of available visitor activities, the Town of Oliver is committed to securing a hotel development within the community. The Town is the owner of 3.5 acres of land that has been identified as an ideal location for a new hotel and adjacent public park space (residual development area after park subdivision will be about 3.1 acres). The site is centrally located in the heart of Oliver and borders the Okanagan River and Oliver Hiking and Biking Trail. It is approximately 1.1 kilometres 3
from the Oliver Airport and is located in close proximity to shops, restaurants, services, parks, and is adjacent to the Oliver Visitor Centre. The site is large enough to accommodate additional commercial and residential development that would further complement a hotel. There are opportunities to create an exciting mixed-use development program, incorporating a hotel, along with compatible and synergistic uses. The proposed development site and its surroundings are illustrated below: Visitor Centre Arena Curling Rink Development Site Kiwanis Park Community Centre and Public Pool Library Future park Kinsmen Playground & Spray Park Community Park Site Details: Developable Parcel Area: 3.1 acres Boundaries: Fairview Road to the south; Okanagan River to the east; the Oliver Visitor Centre to the north; and Station Street to the west Located: One block west of Main Street commercial area and Provincial Hwy 97 Nearby Amenities: Library, parks and major community recreational facilities all within a 450 m walk. Official Community Plan Designation: Town Centre (TC) and within the Wine Village Development Permit Area Current Zoning: Town Centre (C3) and Major Park (P2) Proposed Zoning: C3 or custom to suit development plan. The C3 Zone permits a range of uses, including a hotel; restaurant; retail establishment; licensed retail liquor store; apartment dwelling; art gallery; office; among other uses Maximum Floor Area Ratio (FAR) C3 Zoning: 3.0 4
A Hotel Market Study, which included an Economic Feasibility Analysis, was commissioned by the Town of Oliver in 2012. This study reveals that there remains a strong opportunity to grow the hospitality and tourism industry in Oliver, catering to both the local residents and visitors/tourists. It has been determined that the Town currently contains a limited supply of overnight accommodation facilities and lacks mid- to upscale hotels and resorts with meeting space and amenities to compete with the hotels and resorts situated in the neighbouring communities of Osoyoos and Penticton. The consultant's analysis reveals that there is opportunity for development of a hotel property of a mid-to upper-scale orientation in the range of 80 to 100 rooms in Oliver. It is recommended to be of a national or international brand name franchise. The consultant provided an analysis of the market and financial operating performance of a proposed 90 room chain-branded hotel of a mid- to upper-scale orientation with conference/meeting space of approximately 5,000 square feet, as well as a swimming pool, hot tub, fitness facility, restaurant/lounge, small retail component, and small spa. The consultant has noted that there is merit to explore possibilities for developing a hotel complex in combination with compatible and synergistic uses. Additional development of the subject parcel may include retail (with a portion focused on the wine industry), service-commercial, restaurant, and residential. Furthermore, the hotel project may implement some form of stratified residential product. The complete Hotel Market Study can be viewed by following links from the Town of Oliver website, at www.oliver.ca/home. Additional information available on the Town s web site related specifically to this RFQ includes: OCP Wine Village development permit guidelines OCP Appendix 1 Wine Village Core Area Concept Plan 2008 C3 Town Centre Zoning Schedule Survey Plan EPP31652, showing detailed dimensions of the development site Revitalization Tax Exemption Bylaw 1328 5
THE DEVELOPMENT OPPORTUNITY This Request for Qualification is focused on the development of a hotel on the identified development site within the Town of Oliver. At this time, a preliminary land use demand market study and financial feasibility analysis has been conducted solely for the hotel portion of the development. However, it has been recommended that further exploration is warranted for complementary land uses in addition to a hotel. As such, the Town would be open to reviewing proposals which explore the possibility of not only a hotel, but also for mixed-use components, including other commercial or institutional uses along with some form of stratified residential product within the development site. DEVELOPMENT INCENTIVES Recognizing that the current economics for a stand-alone hotel development can be challenging, the Town has made certain provisions and is willing to consider other proposals to make this development more viable. Of course, any proposal must be reviewed legally for compliance with the prohibition of assistance to business contained in the Community Charter. These incentives and opportunities are outlined below: Residential Development Component: A mentioned earlier in this document, the vision for this development site includes a strata residential component. It is anticipated that sale of these residential units would help underwrite the construction costs of the hotel portion of the development. Property Tax Exemption for Improvements: The Town has adopted Revitalization Tax Exemption Bylaw 1328, to provide an exemption for the municipal portion of property taxes related to the value of new improvements on qualifying developments within four different revitalization areas. A hotel development on the proposed development site would qualify to receive an assessed improvement value exemption equal to the construction value of the hotel. This exemption would be in effect for ten years following completion of the project. Other commercial and residential components of the development would receive this same exemption for the first five years following construction, and then be 6
reduced to 80%, 60%, 40%, 20% and 10% in the sixth through tenth years respectively. Infrastructure Costs: The Town collects development cost charges (DCCs) for all new commercial and residential development in the municipality. The list of DCC funded projects includes the future bridge across the Okanagan River at the north end of the development site, as certain upgrades along the adjacent Station Street corridor. While the section of Station Street adjacent to the development site does not qualify for DCC funding, the surface infrastructure is somewhat deteriorated, and the Town could consider some cost sharing with the development on reconstruction costs for this street. Public Office Space: The existing municipal offices and council chambers are housed in two older buildings. For some time there has been contemplation over a possible expansion and relocation. The Town would be interested in discussing an option for having the land purchase price provided in kind through construction and dedication of municipal offices to the Town as opposed to a straight cash sale. Co-locating a municipal hall with a hotel would provide additional opportunities for shared use of meeting rooms and council chambers between the Town and conference participants at the hotel. Residential units could also be marketed in upper floors above the municipal hall to further offset construction costs. GUIDELINES FOR SUBMITTAL Interested parties are requested to include with their submission: A brief history of the Firm/Project Team Names, addresses and telephone numbers of those key members who may be contacted during the period of proposal evaluation. Resumes of those key professionals who would be assigned to work directly on this project Previous Experience - Describe projects which best represent the team's direct applicable experience. Include brief project descriptions, cost of development, drawings and photographs, and a description of the extent of involvement with each project. The Town is seeking firms or teams who can demonstrate the financial capability to undertake the project. Proponents should submit business and financial 7
references and resources. Relevant information includes, but is not limited to, available funding sources, funding commitments and/or access to capital, and banking relationships. Financial and banking references should include a telephone number of the contact for each of these, together with written authorization permitting the Town of Oliver to solicit the information. Proponents should outline their vision for the project. A description of interest needs to describe: o The size (square feet), number of storeys, number of hotel rooms/suites, quality, and style for the proposed hotel development, as well as other appropriate descriptive measures (for example, the number of seats for food/beverage; maximum capacity for meeting spaces; etc.). o Details pertaining to any complementary land uses proposed on-site in addition to the hotel. Provide details pertaining to each proposed land use in terms of size (square feet), number of storeys, configurations, etc. o Overall description of the appearance of the proposed development, location of significant components, the relationship/integration to existing adjacent uses and various access networks (pedestrian, vehicular, etc.). The Proposal should discuss how the design concept embraces and complements the existing historic commercial core buildings of Oliver that extends along Main Street. o Consideration should include the context relative to the Town of Oliver and the surrounding rural area; identification and preservation of key views and sight lines; views including the skyline of the surrounding benchlands and hills of the South Okanagan; consideration for site servicing; etc. o Depict the proposed project elements in a massing plan as well as a building layout. Conceptual elevations would be welcome but not required at this stage. Descriptions as to proposed design philosophy, frontage improvements (sidewalks, landscaping, etc.), as well as the relationship of these elements to surrounding land uses and access systems should be incorporated. Hotel Brand and Tenant Commitments (as applicable) - Proponents should include any commitments from proposed hotel partners and any applicable retail and/or restaurant tenants. If a respondent does not have commitments, they should include a proposed plan for partnering with a hotel and signing any proposed tenants. 8
Any other additional information you feel may be helpful in the evaluation of respondents. GENERAL INSTRUCTIONS TO PROPONENTS Proponents are requested to submit four (4) complete hardcopies and one (1) electronic copy of their Proposal on USB flash drive or CD as a PDF document that is PC readable, labelled, and not password protected. The Proposal should be presented in a sealed envelope plainly market "Hotel Development Opportunity" to be received no later than 4:30 PM on September 30, 2013 at: Town of Oliver 6150 Main Street PO Box 638 Oliver, BC V0H 1T0 Attention: David Svetlichny, Chief Financial Officer Proposals received after the time and date specified above may be rejected by the Town without further consideration. Proponents are requested not to submit their proposal by facsimile or email. ENQUIRIES All technical enquiries concerning this Request for Proposal shall be directed to: David Svetlichny, Chief Financial Officer Email: dsvetlichny@oliver.ca In the event an enquiry from a Proponent necessitates the need for clarification, all Proponents will be notified by the Town. Prior to the closing time, Proponents must establish contact only with the above person regarding their enquiries about the Proposal. If any changes to the above contacts are made all Proponents will be advised. 9
TERMS AND CONDITIONS This Request for Qualifications is not intended to form a contract between the Town and any proponent who chooses to respond. The Town is assuming no obligation to award a contract as a result of this Request for Qualification and reserves the right to terminate the Request for Qualification at any time. Similarly, any proponent may withdraw their proposal at any time by notifying the Town in writing. The Town will not reimburse any proponent for costs incurred in the preparation and submission of a proposal. Any response to this Request for Qualification may be negotiated to be part of a contract to be entered into with a successful proponent. A proponent who solicits members of the Town Council or any associated committee during this competition will be viewed as attempting to seek an unfair advantage over other Proponents and may be rejected without further consideration. Freedom of Information and Protection of Privacy Act: All Proposals and subsequent information material received will not be returned and shall become the Property of the Town of Oliver and as such may be subject to disclosure provisions of the Freedom of Information and Protection of Privacy Act. The Town of Oliver reserves the right to make extra copies for utilization during the evaluation process only. Evaluation and Selection Process: Proposals will not be opened or read in public. It is the Town s intent to review the proposals received and initiate further discussions and possible negotiations with one or more proponents whose proposals appear to best meet the vision outlined in this document and the other documents referred to herein. Proposals will be reviewed and evaluated by a selection committee comprised of Town staff and council members. During the evaluation process a limited number of respondents may be invited to give written or oral presentations and/or participate in interviews with the committee, and provide additional requested information. To assess financial capabilities, further information, including financial statements of assets, 10
liabilities and net worth may be sought. Such discussions will not in any way create binding contract between the Town and any such Proponent. The Town may, at its sole discretion, continue discussions and enter negotiations with one or more of the prospective proponents. The Town may request additional information from the selected proponents at any time during the selection process. The Town will evaluate proposals based on qualifications including other projects that are similar in scope and complexity, and other projects that are compatible with the hospitality industry. The decision will be based on the proponent's vision for the project, financial capabilities, and construction experience. The Town of Oliver reserves the right to reject any and all proposals received in this solicitation. There will be no binding agreement with the Town until a formal written agreement has been negotiated with a proponent, and that agreement has been approved by authorized Town officials. After the Evaluation and Selection: The selected proponent would be expected to commission and deliver a market demand analysis and financial feasibility assessment for the development, and prepare preliminary development schematics, building exterior elevations, design theme and site plan, etc. The selected proponent will have the opportunity to negotiate workable zonings, floor area ratio (FAR), possible bonusing and parking ratios in consultation with the Town, their representatives and the community by way of public open houses and workshops. This stage would also include the formulation of a workable ownership entity/structure; approach to securing construction and permanent funding sources; and details of any proposed involvement of the Town. Any land purchase would include performance requirements and provisions for reversing the sale if agreed provisions are not met within an agreed timeline. 11