However, Gateway Casinos welcomes the development
While the mayor said Thursday he looks forward to moving forward with the Kingsway Entertainment District now that a hotel management company has been named, some members of council are still sounding alarm bells.
Dario Zulich, the developer behind the KED, announced Thursday Manitoba-based Genesis Hospitality “has entered into an agreement with Kingsway Entertainment District Inc. to develop and construct a flagship hotel in conjunction with Gateway Casinos and the City of Greater Sudbury at the KED. This hotel will represent a major investment in the City of Greater Sudbury.”
Mayor Brian Bigger said the company is a welcome addition to the local landscape.
“Genesis Hospitality is a welcome addition to this project,” Bigger said Thursday. “It completes the partnership going forward with the plan. As a member of this community, it will contribute to future economic growth and the success of the KED.”
Zulich said Friday he looks forward to working with Genesis Hospitality “in providing an integrated and seamless visitor experience at the KED.”
Based in Brandon, Genesis was born in 1978 when three families pooled their resources to build their first hotel. The company currently owns and operates 12 hotels across the country, including four in Manitoba, three in Alberta and five in Ontario.
Their portfolio (genesishospitality.ca) indicates they operate one Hampton Inn; three Courtyards by Marriott hotels; a Comfort Inn; two Residence Inns; a Clarion Hotel; and three Victoria Inns.
That causes concern for Ward 1 Coun. Mark Signoretti, who said Greater Sudbury was promised a four-star, upscale hotel. Most of the holdings owned by Genesis are mid-level.
“It adds to the uncertainty around this project,” he said. “Talk is one thing; actions are different. All I see is talk; I see no action. … At best it’s a three-star, and that’s not what we were promised.”
In its current incarnation, plans for the KED include a $100-million events centre paid for by municipal taxpayers; a $60-million Gateway casino; and a hotel.
The Star sought comment from councillors Signoretti, Michael Vagnini (Ward 2), Gerry Montpellier (Ward 3), Robert Kirwan (Ward 5) and Bill Leduc (Ward 11), as they have been the most vocal opponents and proponents of the project. Only Signoretti, Vagnini and Montpellier replied.
“I just find it very coincidental the announcement comes two weeks after Gateway announced they were putting a pause on the project,” Signoretti said Friday. “It seems every time the KED is hit with a speed bump or negative situation, the developer makes a new announcement saying, ‘look at this.’ The timing is too coincidental, in my opinion. I think it’s grasping at straws right now.”
Signoretti said there are too many unknowns to celebrate the deal.
“Are they just an operator? Are they actually building this and putting up the money for it? Or are they just agreeing to operate the facility,” he asked.
In 2018, Hilton Hotels sent Zulich a letter indicating their “strong interest” in establishing a Tapestry brand hotel at the KED. But it went nowhere and an agreement was never finalized.
Signoretti is concerned the same thing could happen again. He said he would like to know what happened in 2018 and he wonders why there has been no movement on a hotel in three years, until Gateway announced they would not be starting site preparations.
Curiously, Zulich said in his release that Genesis will work with Kingsway Entertainment District Inc. to develop and build the hotel. Signoretti said until Thursday he had never heard of a company called KED Inc. Throughout this process, Zulich has been developing the project through a numbered company.
It appears despite Zulich’s announcement Thursday, there is still no agreement in place to direct the construction of the hotel.
“As previously publicly shared at council, the city has a cost-sharing agreement with the developer. A summary of this agreement has been available on our website since 2019,” Maggie Frampton, a spokesperson for the city, said Friday.
As Montpellier has pointed out many times, the agreements to which councillors have been privy are not build agreements. The agreement on the city’s website “focuses particularly on the common areas/works and blasting. Each partner is responsible for the development of their own site, including buildings and parking lots.” The cost-sharing agreement outlines each partner’s responsibility towards road work; intersection improvements; blasting and grading; Festival Square; a stormwater management pond; and the bus loop that will service the KED.
Montpellier said the timing is curious, since it appears Zulich has been working with Genesis for some time.
“We are incredibly excited to finally make this announcement. We have been dealing with Genesis since well before COVID,” Zulich said Thursday. “They have visited us on several occasions and we have walked the site. Genesis Hospitality is the perfect fit. They share the same vision as we do. They are ambitious and resourceful. They care about community and growth, just like us.”
Montpellier said Friday “Genesis has been in the picture all along, right from the beginning.” He pointed out Genesis is basically a middle-man, pairing money and material.
“They are not hotel builders; they are brokers,” Montpellier explained. “You say to them, ‘we’re interested in the hotel business,’ and they will find you a hotel. They don’t sell the hotel brand, they broker it.”
Montpellier said Zulich’s announcement was deceiving and was meant to make the public think there is a hotel, but he said he views it otherwise.
“Anybody with any logic would know any company – even if it were Jack and Jill’s Campground – would be proud to put their name on it,” he argued. “There is no name on this. There’s just the name of a handling company. A handling company is just a law firm – they put the players together. It’s just smoke and mirrors again.”
In an attempt to gain some clarity about the KED, Montpellier said he will introduce a motion at next Tuesday’s council meeting that aims to stop the rumours.
He says in the motion several city staff — including members of the senior leadership team and city solicitor Eric Labelle; as well as Zulich and Robert Swayze, the city’s integrity commissioner – have confirmed publicly “that no legally binding hotel or casino building commitments actually exist for the KED beyond site preparation.” He also alleges a member of council, who he does not name, continues to “claim on social media that such a commitment does exist and that a hotel and casino will be opening in less than two years.”
Montpellier says this situation has caused considerable confusion and distress within the city.
“Be it resolved that council hereby directs staff to issue through public media notification that the only current build commitment for the KED is limited to site preparation,” the motion concludes.
Vagnini echoed the concerns of his colleagues. He said the fact a hotel brand has still not been named is “perplexing.” He said he wants to know whether Greater Sudbury is getting a Marriott or Hyatt or Ramada.
“I don’t know how they can start building a hotel without mentioning who it is,” he said. “It seems very secretive that they can’t discuss this with us. That tells me, in my mind, that they don’t have a hotel that has come forward. Yes, we have a management group, but where’s the name of the hotel and why is this a hidden mystery?”
Despite the concerns of the three councillors, Robert Mitchell, a spokesperson for Gateway Casinos, said the company is pleased to see Genesis come on board.
“We are pleased with (Thursday’s) announcement and look forward to working collaboratively with all our KED partners,” he told The Star. “As stated in the past, Gateway is hopeful there can be a quick and successful resolution to the outstanding issues facing the KED development.”
Site prep was to cost about $9.7 million. The city was to be responsible for $5.9 million, while Gateway would have paid $2.2 million. The hotel operator would have covered $1.1 million and Zulich was to have paid $530,000.
While site prep was scheduled to begin on Nov. 29, Jagtar Nijjar, executive VP of development and construction for Gateway Casinos, said in an email to city CAO Ed Archer that afternoon they were putting a pause on the work, due to outstanding issues.
“The KED project continues to be challenged by significant risks, including the ongoing Minnow Lake Restoration Group legal action that will not be heard in court until April 2022, and the OPP investigation called for by the city,” Nijjar wrote.
The Minnow Lake Restoration Group launched in August a divisional court action seeking a judicial review of a July 2021 decision to move forward with the KED. They want that vote declared null and void.
Montpellier published an open letter on his Facebook page earlier this year in which he alleged representatives for Zulich and Gateway Casinos approached him before the events centre vote in June 2017 in an effort to sway his decision. He has indicated that is why he did not vote on the location of the events centre. An OPP investigation was launched after Ward 8 Coun. Al Sizer introduced a motion to have the Greater Sudbury Police Service look into the matter.