Liard First Nation has gotten out of the hotel business.
It was a “difficult decision” to sell Watson Lake’s Belvedere Hotel and Gateway Motor Inn, said Chief Liard McMillan.
“It’s not the direction I would have liked to see things go. I wanted us to be successful and carry these things forward. But I respect the decision of our board of directors to make a sound, business-minded decision. It was definitely the right decision to make.”
The First Nation’s development corporation sold the hotels for an undisclosed sum, after receiving an unsolicited offer in mid-February.
The corporation concluded it could “achieve more for its stakeholders by not owning hotels,” states a newsletter released this month. The corporation plans to focus on partnering with mining and oil and gas companies.
The new owner of the hotels is Andy Shannon, owner of Dragon Construction. He moved to Watson Lake from Grande Prairie last summer while putting new siding on a rival hotel in town.
The veteran contractor was looking to buy a hotel. And he likes Watson Lake. “My sister owns Iron Creek Lodge. She’s been there for 25 years,” he said.
“This is my opportunity to actually be there and stay there.”
Shannon plans to renovate both buildings, make them smoke-free, and bring back live entertainment.
“That hasn’t been there for a while,” he said. “Make it like a real hotel.”
The First Nation bought the Gateway Motor Inn, and the Belvedere and Watson Lake hotels in June of 2007. The acquisitions were plagued by political controversy, staffing challenges and a fire that burned the Watson Lake Hotel to the ground in April.
The controversy started after it came to light that the First Nation had bankrolled these purchases, in part, with federal money earmarked for affordable housing.
The deal proved all the more controversial because of the political connections of the former owners. They’re two close allies of Premier Dennis Fentie: Community Services Minister Archie Lang and Pat Irvin, a one-time campaign manager of Fentie’s.
The First Nation paid its development corporation $1.2 million in affordable housing funds for a building known as the Campbell Block, which stood adjacent to the Watson Lake Hotel, with plans to convert the building into social housing.
This renovation work still isn’t complete, said McMillan. He faults the economic downturn, a rising dollar and gas prices for delaying the work.
But the Campbell Block, the Belvedere and the Gateway have all been periodically used to shelter First Nation members in need, said McMillan.
Two other small buildings stand on the same lot. The development corporation plans to eventually turn them into rental units. Part of the Campbell Block may turn into commercial apartments, too, said McMillan. “It may be a mixture of both.”
McMillan won’t say whether the First Nation ultimately lost money on the hotel purchases. But he concedes that running the businesses proved more of a hassle than they were ultimately worth.
“Running a hotel business along the Alaska Highway in the North can be very difficult if you’re not running it as a mom-and-pop-type operation,” he said.
Retaining qualified managers proved hard. But, on the bright side, the hotel purchases were a “learning experience” for the First Nation, said McMillan.
The First Nation has paid off its $1-million mortgage owed to the hotels’ previous owners, said McMillan.
Contact John Thompson at johnt@yukon-news.com.