Update: MUN great fit for Battery Hotel, mayor says

But city would still like to collect property taxes

Barb Sweet bsweet@thetelegram.com
Published on November 15, 2012

St. John’s Mayor Dennis O’Keefe said he thinks it’s a fantastic idea for Memorial University to buy the Battery Hotel, but he wants the university to pay property taxes on that site.

The city stands to lose $300,000 a year in lost property taxes.

The Telegram broke the story on its website this morning and MUN made its plans public.

The deal would close in January.

As a provincial public entity, MUN doesn’t have to pay property taxes or draw permits for renovation or construction.

O’Keefe said the historical nature of the site — at the foot of Signal Hill — plays well with MUN as a memorial to Newfoundlanders and Labradorians who have served their country.

“There’s no doubt about it. It is an absolutely terrific use of property,” O’Keefe said.

“It’s a win-win acquisition.”

The sale to MUN would also put to rest the push between the city and private development proposals for the site that have become contentious over the years, O’Keefe said.

“It dispels any possibility of some development going there that’s unacceptable to the city,” he said.

O’Keefe said if MUN isn’t up for paying property taxes, the city would not try to make up the loss by passing it on to other city taxpayers’ bills.

More in Friday’s Telegram.

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Earlier stories

Memorial University president Gary Kachanoski told The Telegram this morning the university is currently spending about $1 million a year on leased space so it makes fiscal sense to buy the Battery Hotel.

The president didn't disclose the asking price or how much the university might spend to renovate and rehabilitate the site.

The building is likely to be used for office space and rooms could be used for university residences which would provide revenue.

The four-acre site also provides land the university can utilize in the future.

The current hotel has 100 rooms, 30 suites and about 40,000 square feet of office space.

The reaction around the university has been positive to the news of the university entering into an agreement to purchase the Battery Hotel.

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The Newfoundland Association of Public and Private Employees (NAPE) had little to say about the agreement Memorial University has to purchase The Battery.

“We just heard in the media. I don’t have anything to say at this point,” Furlong told The Telegram.

News of the pending sale was broken on The Telegram website this morning.

Earlier this month, the manager of the Battery Hotel gave notice of termination of employment to workers there.

NAPE represents most of the 71 workers at the hotel. The layoffs are effective Jan. 5, on condition the pending sale goes ahead.

A Nova Scotia-born developer, Rick Butler — now based in California — bought the hotel in 2005, and originally planned to tear it down and build a 10-storey hotel.

That plan was shot down when he couldn't get development approval.

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Facilities and buildings on Memorial’s St. John’s campus and the Marine Institute are fully occupied and the university currently leases significant space off-campus, Memorial said about its purchase of the hotel.

The space at the Battery would allow the university to consolidate a number of units that would be appropriately housed closer to the city’s downtown core, the university has told staff.

The building and operations will be cost-neutral to the university. Funding will be provided from redirecting lease expenditures for off-campus space and revenue generated from university activities at the facility.

“Memorial is committed to integrating into its surroundings and values the integrity of the communities and neighbourhoods in which we live and work,”Dr. Gary Kachanoski, Memorial’s president and vice-chancellor, said in making the announcement.

"As a former professor at Memorial in the mid ‘70s I'm particularly proud to see the Battery’s landmark property contribute significantly to making Memorial University’s campus one of the finest in all of Canada,” said Rick Butler, Battery Hotel owner.

•••

Memorial University of Newfoundland has an agreement to buy the Battery Hotel, The Telegram has learned.

MUN is informing its staff internally this morning of the purchase.

There is a due diligence process and a 60-day closing period.

Earlier this month, Carol Furlong, president of the Newfoundland and Labrador Association of Public and Private Employees, which represents most of the 71 workers at the hotel, said  workers have been notified layoffs are effective Jan. 5, on condition the pending sale goes ahead.