If you’re thinking about the future of the Waldorf Hotel — and who isn’t these days — I’d start with the much vilified Solterra Group and its CEO Gerry Nichele. They are the folks who bought the Waldorf and promised, so far, not to tear it down.
In economic terms, they have the most at stake. Neither buyer nor seller is talking. But my sources at city hall point out that they paid $15.4 million for the property, which is almost double the 2013 assessed value of $7.9 million. Undoubtedly they did this expecting a rezoning to make that investment pay off.
Of course there are at least three other players in this little drama. That includes the very creative Waldorf Productions, four young guys who proved in two short years they could establish the hippest and most popular cultural hub in the city.
Unfortunately, they have proven far less successful as business types. And their political acumen on the eve of their vacating the premises is pathetic, which I will get back to in a moment.
But their repeated assertion that they had a “financially viable business that was thriving” flies in the face of the fact they themselves admit they were the beneficiaries of a significant forgiveness on unpaid rent.
That benefit has been estimated by the current hotel owner and the second player Marko Puharich at more than $300,000.
There is no question that when the Waldorf Productions lads took over the space they found a down-at-the-heels operation well past its best before date. They invested about $1.6 million in renovations.
Finally, there is the city and Vision Vancouver Mayor Gregor Robertson. Those hipsters who have regularly inhabited the various Waldorf venues are Vision’s people. Those tattooed tweeters not only have Robertson’s ear, they have his heart and soul.
It is no wonder that he directed the city’s senior staff to move with such alacrity on the news that Waldorf Productions was calling it quits and the future of the hotel was in doubt.
The 120-day cooling off period declared by council prohibits a demolition permit being issued while the city considers the buildings heritage significance and all parties consider their future.
And on that point, the people with the biggest task ahead would be Waldorf Productions. For starters, according to an email I have in my possession from the production company’s Ernesto Gomez, they surprised and ticked off their most generous landlord Marko Puharich last summer by announcing that they had spent the past year “doing our due diligence in regards to the re-development of your property.” All of this happened in the midst of them defaulting on their original lease agreement and Puharich hoping to deal with what the production guys referred to as “our current lease situation”.
They wanted a meeting that would “leave lawyers, real estate people and anyone else out.” No such meeting happened. Six months later, Puharich sold the property to a buyer of his choice — the Solterra Group — which may very well have the same plans for the hotel and the adjacent property as the “real heavyweights” Gomez and his buddies were chatting up.
Solterra’s deal, however, required the property vacated by the time they take possession next September. That put Gomez et al on a very short leash.
Rather than putting all their energy into making up with Puharich and quietly playing nice with Solterra, they hit the panic button and went on the attack denouncing “cookie cutter condos.”
This inevitably raised the ire of thousands of their supporters including Robertson who bemoaned the potential loss of an important cultural institution. It also put Solterra’s investment at great risk in the face of a neighbourhood community plan that is in the works, which could ultimately be swayed by this dispute and insist the Waldorf property remain under its current industrial zoning.
Waldorf Productions is currently poisoning any possibility of a détente with Solterra by threatening to thwart its plans for that rezoning. Not so smart.
We would all be better off if, over the next 120 days, all parties could just chill and cut a deal of mutual benefit. But then that could just be my wishful thinking. email@example.com