Germain pitches shorter grant for new Ottawa airport hotel

The owner of the proposed new hotel at the Ottawa International Airport says it's prepared to accept a 10-year grant from Ottawa taxpayers to support the hotel instead of 25 years, with the airport changing its lease proposal to help build the hotel.

In a letter to Mayor Mark Sutcliffe and councillors obtained by CTV News, Ottawa International Airport president and CEO Mark Laroche and Germain Hotels vice-president of operations Hugo Germain say the airport authority will "make some adjustments to Germain's lease payment obligation" to help the project proceed.

Council will vote next Wednesday on the proposal for the city of Ottawa to provide a $13-million grant to Germain Hotels to build a 180-room Alt Hotel at the Ottawa International Airport.

Sutcliffe has come out against the proposal, which advanced to council after a tie vote at the city's finance committee on Tuesday.

Under the Ottawa International Airport Community Improvement Plan, taxpayers would provide $13 million in grants over 25 years to Germain Hotels to build the new Alt Hotel. The grant would see Germain Hotel receive 75 per cent of their $17.4 million in property taxes returned in a rebate.

In the letter to council, obtained by CTV News Ottawa, Germain Hotels and the Ottawa International Airport say Germain "is prepared to accept a grant capped at 10 years." Laroche and Germain say the application for a taxpayer grant is a "significant financial risk", but they say the hotel is needed.

"The Authority strongly believes in the need for the amenity; both organizations are prepared to submit a revised plan to their respective board of directors for approval with these revised terms and feel very confident that they will be accepted," the letter states.

"This new path forward will provide relief to Germain Hotels to help manage construction costs. Additionally, the Authority will make some adjustments to Germain’s lease payment obligation."

The letter says this proposed relief on the CIP will result in "less revenue from the hotel payments for years", and will "affect the Authority's ability" to fund other airport initiatives and opportunities.

"Germain needs to begin construction now to meet a completion date in 2025 and prevent construction costs from rising further," the letter states.

"Additionally, the right time is now to encourage Porter to choose YOW for connecting routes and to base newly arriving aircraft. As such, we request approval of the CIP at the April 12th Council meeting under the revised terms. The City’s grant would only cover ten years from the day construction ends."

The letter from Germain Hotels and the Ottawa International Airport does not say how much a 10-year grant would cost.

According to the staff report on the Ottawa International Community Improvement Plan grant, the first 10 years of the grant would see $4.98 million in tax revenue, with a $3.62 million grant to Germain Hotel.

The city would receive $12.5 million in municipal tax revenue from the hotel over the next 15 years.