Kevin Walker, developer of the Oak Bay Beach Hotel, says he and his partner, Shawna Walker, are looking to return to their operational roles within the hotel in the future.
This follows a recent development, which saw a Vancouver court appoint receiver Ernst and Young to take over operations of the hotel on Wednesday, Dec. 4.
“We have certainly discussed the possibility [of a return] with Ernst & Young,” Walker said in an interview with Douglas. “I believe all parties think that would be the best possible outcome provided the priority lenders who undertook this receivership application are repaid. That’s the key and that’s what we are focused on right now.”
According to Walker, he and Shawna are putting every effort into an alternate restructuring and financing.
Walker learned on Monday night that the construction lenders would be submitting an application to the court on Wednesday morning to force the property into receivership. He says that while the hotel operations were exceeding expectations, real estate sales of its hotel and private residences were struggling.
The property first came into the hands of the Walker family in 1972, under Bruce Walker and business partner Glenn Anderson. In 1995, Kevin, Bruce’s son, and Shawna purchased the hotel. Then in 2006 the hotel was closed for redevelopment, which was completed in late 2012. In developing the property, the hotel incurred substantial liabilities and debt, estimated to be in excess of $125 million.
“[This receivership] is about debt rationalization rather than it is [about] anything else,” says Kevin Brennan, a senior vice president at Ernst & Young. “The hotel will continue to be a great asset in the community into the longer term.”
Brennan says it will be business as usual at the hotel through the Christmas season under the current management team led by hotel manager Michelle Le Sage, remaining in place.
“We look at it as a phased approach, with the first phase being the stabilization of the business operations themselves and getting to really understand the business,” Brennan says. ”The longer-term future of the hotel, with regards to selling it or any other process, won’t be a focus of ours for a period of time.”
While the Walkers have stepped back from the day-to-day operations, they have voiced their commitment to collaborating with Ernst & Young and ensuring the level of service at the hotel is maintained.
“When we sat with our management team, advising them of this change on Wednesday night, and after we got through our tears, I charged them with a very important mandate,” Walker says. “The theme of it was, ‘We’ve built something incredible together, run with it and take it to higher levels. We’ll be watching you, make us proud.’”