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| SUNRISE
IN THE NEWS
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Thornton
Court sells for $3.75M, will be turned into hotel
They
came with their cell-phones, leather coats and lawyers, and one of them bought a
downtown hotel.
About
60 people crammed the drawing room at the Hotel Macdonald at noon Wednesday for
what may have been the largest unreserved auction of a commercial building in
Canada.
One
Thornton Court sits just east of the stately Macdonald, with a view of the North
Saskatchewan River.
It
took just 10 minutes for auctioneer Frank Hunt of Century Services Inc. to
handle 19 bids, at one point imploring the eight registered bidders that
“it’s better than buying a bunch of deep-fat fryers.”
He
finally pronounced the 11-storey former office building “sold” for $3.75
million to the gray haired gentleman with folded arms, who occasionally flapped
bid card No. 255.
Gerry
Levasseur, president and CEO of Sunrise International Inc. based in Spruce
Grove, had just bought himself another hotel, to go with the Jasper
Inn Motor Lodge, Hinton
Ramada, Stony Plain Ramada Inn & Suites, and Stony
Motor Inn.
In
addition to his $250,000 bid deposit for One Thornton Court, Levasseur must pay
another $375, 000 within a week, and wants a weeklong extension for Dec. 29
deadline for closing the deal.
“It’s
probably 80 per cent complete. We’ll just finish the way it is and get it
opened. We’ll have a chain name on it, but I don’t know which one.”
Levasseur
said his hotel will add 220 rooms, priced in the $80 to $100 a night range, to
the downtown hotel market.
“It
won’t be comparable to the Hotel Macdonald or the Westin. This is going to be
a limited type hotel. We’re debating whether to put a lounge or restaurant in
there. We may have just a continental breakfast.”
The
low price of the rooms, he said, isn’t related to the good deal he got on the
building. “There’s a lot of money to be spent there yet. It’s going to be
an attractive place when we’re finished.”
Another dead spot on
Jasper Avenue will soon be brought back to life as a new hotel at the address
known as One Thornton Court.
A Spruce Grove company called Sunrise International which also owns hotels in
Jasper, Hinton and Stony Plain, successfully bid $3.75 million for the 11- story
former office tower which will open with 200 mid-market hotel rooms in early
spring. Despite its spectacular view, the address, sandwiched between the Hotel
MacDonald and the Shaw Conference Centre, was becoming somewhat infamous as a
deal after deal on the property collapsed. In fact, the conversion of the
building to a hotel is 80 per-cent complete, but the work stopped about a year
ago after the previous owner defaulted on two loans. It's like a ghost
town- everything is exactly the way it was when construction stopped in March
1998. Some rooms have everything but the Gideon Bibles. Comforters in
their plastic covers sit on beds. There are hair dryers in some bathrooms.
Other parts of the building are a construction zone, with a bucked of hardened
drywall mud left where someone was working. Alas, nothing is easy on Jasper
avenue, the Mac itself was Vacant for about a decade. A number of
buildings on the north side of the street have been empty for years, inducing
the Cambridge building and the former Hop's Handbags building.
But, this time the job will get done at Thornton Court, says John Cosgrove of Sunrise. The company already put in $600,000, and has until early January to come up with the rest of the financing. This is the first major hotel to open downtown since the Mac reopened its doors about six years ago.
It's a great deal for Sunrise, Cosgrove says. It means they can put a hotel room on the market by spending $30,000, less then one third of what it costs per room in a high-rise these days
Cosgrove's company had its eye on the building for a couple of years, but at one point it was going for more than $10 million.
"We know it had potential and at some point the price would be right. ..." Cosgrove says.
"When we looked at what we were prepared to bid, we took a conservative view of the market in terms of rates and occupancy."
A hotel downtown is not automatically a gold mine and, even at a bargain price, Cosgrove acknowledges there is some risk.
Jim Hansen, president of the Alberta Hotel Association, says the overall occupancy rate for downtown hotels up to September was 62.8 percent, down form 63.3 percent from last year.
"It's certainly not going to help the hotels, but it's better to get the inventory up and running," he says. Being more of a 2 1/2 or three star hotel, it's not really competing with the four-star hotels downtown.
Cosgrove is looking forward to next summer, when occupancy and room rates will be pushed up by the World Championships in Athletics, which is expected to draw thousands to Edmonton. Some of the rooms are pretty small, but the views are something to write home about. All of the south side of the hotel, from the ground floor up, has a commanding view of the river valley. But even the rooms away form the riverside have great views of downtown, especially those looking east along Jasper Avenue where the street starts curving to the north. Cosgrove says the layout isn't exactly as he would have designed it, but there will probably be some changes to unfinished rooms on the upper floors to get some more expensive honeymoon suites. The company will be talking with the hotel chains, but will first have inspections done to see which standards the space meets.
The work schedule followed by the previous owners was also quite curious, he says. Most hotels start with the entry and the elevators, and then the rooms can be finished a floor at a time, which means that income can be coming into the hotel before it is completed. In this case, the elevators need a complete overhaul and the lobby was barely touched. The city won't even issue an occupancy permit until the entrance is completed.
The 30 year-old building , like most of its era, is not exactly an architectural wonder, especially compared to the Mac. But Cosgrove promises the exterior will be "prettied", with possibly a new roof line and elimination of that ugly maroon trim.
Sunrise International Inc.
www.sunriseint.com info@sunriseint.com
P.O.
Box 4326,
Spruce Grove, Alberta
T7X 3B5
Phone:
1 (780) 962-9298
Fax: 1 (780) 962-8210
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