Things are about to start happening down at Terminal 1 of the Vancouver Waterfront.
Vesta Hospitality, the developer working to build The AC Hotel by Marriott on the Terminal 1 property at the Vancouver Waterfront, has recently announced that the groundbreaking for the ground stabilization for the project is set for Aug. 22.
“We should have everything ready, permits and everything, before the end of the year,” said Vesta CEO Rick Takach. “The opening date is scheduled for mid-2021, and I’d like to push that forward a little bit. Designs are about 75% complete, and we’re pretty excited about where that stands at the moment. There are certain areas that are 100% done.”
The new hotel at Terminal 1, which is part of the Port of Vancouver USA’s waterfront redevelopment site, will be located at the corner of Esther Street and Columbia Way. Takach said the seven-story building will offer 150 guest rooms, riverfront event space, about 4,000 square feet of meeting space, and some office and retail space. There will also be 160 parking spots included in the development.
“We put a lot of effort and thought into maximizing the river views and mountain views,” Takach said. “One of the really cool things, when you enter the hotel, there will be five support trusses in the lobby, so there will be no support columns to interfere with the great views of the river when you walk in. The design, as far as interiors go, is getting really close (to being complete). We’re very excited about the look; it’s going to be modern, but it (the design) was developed in Spain, so it will also kind of have a European flair to it.”
Takach said they also have an agreement with the Port that the building will be gold-level LEED certified. Part of that certification includes putting some “bird windows” in the hotel, which are windows that reduce the risk of birds flying into them.
Vesta hired a company based in Kansas to do the design work for the hotel – DLR Group. The company has designed more than 20 hotels for AC Marriott worldwide. Robertson & Olson is the contractor for the project, and engineering is being done by Otak.
Overall, Takach said the project is expected to cost $50 million, and it is being partially financed by investors through the opportunity zone in downtown Vancouver. Opportunity zones were a part of the 2017 Tax Cuts and Jobs Act and allow investors to delay paying capital gains tax taxes on qualified Opportunity Funds.
“There are really two components to the opportunity zones,” Takach said. “One, let’s say you invest $1 million in capital gains, roughly you’d have $250,000 of taxes due to the government as federal tax; the opportunity zone allows you to not pay that tax today, you pay it in 2026 and at that time you are eligible for a 15% discount. The second part, if you’re a patient investor, if you wait 10 full years all of the income earned from the investment is tax free. So, it’s really good if you’re OK with putting your money in for 10 years. For me, it makes sense, I don’t mind a 10-year investment – it’s really good from a tax perspective.”
With a number of hotels being constructed in the Clark County area, including the Hotel Indigo at the Vancouver Waterfront that is expected to open in 2020, there will be a good amount of healthy competition for the AC Marriott. However, Takach said their revenues year-over-year are still increasing, and he feels they still have a competitive advantage.
“The demand is there, the economy is still good, the challenge will be when these other hotels open, but the market continues to grow and continues to be positive,” Takach said.
Staff at the Port are also looking forward to the addition at Terminal 1.
“We are excited to welcome local developer Vesta Hospitality to Terminal 1 as they break ground on the new AC Hotel by Marriott,” said Port of Vancouver USA CEO Julianna Marler. “It is the first project underway at the Port’s 10-acre waterfront development, which is a significant milestone for us. Vesta Hospitality has designed a beautiful facility and we are proud to have them as partners in realizing our vision for Terminal 1 as a premier destination right here in Vancouver.”
More details will be coming on the Aug. 22 groundbreaking event.
“Vancouver is my hometown, and this project is very important for us and the city,” Takach said. “We’re very excited about it, and we can’t wait for the groundbreaking.”