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News 11/23/05
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PARTNERS HOPE HOSTEL SPURS GASTOWN REVIVAL Private-sector project could start in 2007
Two Vancouver developers hope a rejuvenated historic hostel will help spark a renaissance in Gastown - and lead to similar privately operated venues across North America.
Sam Yehia and Paul Jacobs, partners in the Cambie Malone's Group, plan to refurbish and expand their Cambie Hostel in Gastown on the southeast corner of Cambie and Cordova streets, in conjunction with the $200-million Woodward's department store redevelopment. Pending financing and city hall approvals, the $5-$7 million hostel upgrade is slated to begin construction in 2007 and conclude in 2008.
"The rejuvenation of Gastown, in the (1970s) if I recall correctly, unfortunately, did not yield the kind of success that everybody had hoped for," says Yehia. "I'm hoping that the impact of such a large development like Woodward's is going to finally give Gastown the success it deserves."
Gastown, easily identified by its cobblestone streets, was Vancouver's first settlement in 1867 when John (Gassy Jack) Deighton, a former Fraser River pilot turned saloon keeper, opened a makeshift bar at the foot of the current Gore Street. But the once-thriving area now contains many abandoned businesses and is frequented by the homeless, prostitutes and drug addicts who inhabit the nearby Downtown Eastside.
Yehia hopes Gastown can achieve a fraction of the success that Granville Island has enjoyed since it converted to a shopping and tourist area from a warehouse district in the 1980s.
If all goes according to plan, Cambie-Gastown Hostel will increase its bunk count to 300 from 135 while doubling the number of guests to 60,000 annually from 30,000. Yehia and Jacobs also plan to install a new pub exclusively for students of Simon Fraser University's contemporary arts school, which is part of the Woodward's redevelopment, and those who attend other nearby downtown college and university campuses, along with a bistro and rooftop lounge.
The hostel project will also provide a facelift for an existing bar and bakery on the 11,650-sq.-ft. site.
"We've been operating this since 1990 on what we consider to be the edge of the abyss," says Yehia, whose group owned the property before he partnered with Jacobs three years ago.
Yehia and Jacobs say they have raised $600,000 of a $4- million syndicated-mortgage offering, which pays a fixed 12-per-cent return over five years. CMG decided to arrange its own offering rather than go through an investment banker in order to avoid management and processing fees.
The two partners plan to put about $1.5 million from the offering into the Cambie- Gastown hostel and raise the rest of the project's funds through construction loans. Remaining funds from the mortgage offering will go towards redevelopment of Cambie hostels at Pender and Seymour streets within Malone's Bar and Grill, and Cambie hostel facilities in the Victoria suburb of Esquimalt and Nanaimo.
Shelbey Sy, Pacific Mountain region marketing director for Hostelling International-Canada, which owns and operates not-for-profit hostels across the country, welcomes the Cambie-Gastown expansion.
"It's all about the hostelling experience," she says. "I think (the renovation) is a great thing."
Hostelling International- Canada is a not-for-profit association affiliated with the International Youth Hostel Federation. HI-Canada owns and operates 13 hostels in B.C., while several others in places such as Tofino on the west coast of Vancouver Island, Nanaimo, Golden and Nelson are independently-owned but still affiliated with HI-Canada in a franchise-like arrangement.
Cambie Hostels are not part of the network.
CMG expects to file the Cambie-Gastown development application with the City of Vancouver next spring and obtain building permits in the fall of 2006. A builder has not yet been chosen, but Yehia and Jacobs have enlisted Geoffrey Henriquez, the architect of the Woodward's redevelopment, and all other Woodward's consultants in order to give both buildings - which will be linked by a plaza - similar appearances.
The Woodward's redevelopment is the largest of its kind in Vancouver's history. In addition to the SFU campus, it will feature condos, social housing and retail components as well as a large public area that is adjacent to the hostel.
"Seeing as the Cambie is the first building you see (going west to east) before the Woodward's development, we thought it was important, as the gem on the mountain, to really do something that honoured the kind of investment and the kind of improvement that this town is going to enjoy," says Yehia.
The Dublin-born Jacobs, who has lived in Greater Vancouver for six years, is coveting the chance to revamp the historic building.
"I love heritage buildings," says Jacobs, who operates the Columbia Cottage B&B. It was known as the first Irish vegetarian bed-and-breakfast in Canada at West 14th Avenue and Columbia Street, for three years after Jacobs emigrated here in 1999.
"I think the city needs to look after and cherish the heritage buildings that are left, because that's the heart and soul of the city. If I can complete my working life just finishing off those four (Cambie Hostel) buildings, that would be absolutely amazing. I'm not interested in building a huge empire. Sam (Yehia) is doing that."
Jacobs moved to Vancouver a year after he fell in love with Gastown during a holiday.
"I saw an opportunity in Gastown," says Jacobs, who worked in the garment industry for 25 years in his homeland while also dabbling in real estate. "It was very similar to an area of Dublin called Templebar ... (The rock band) U2 bought a lot of property there when it was just like Gastown. They bought the big hotel there. They refurbished it and spent a fortune on it. It's an original art-deco hotel ... and it's the No. 1 tourist attraction in Ireland at the moment."
Yehia foresees a North America-wide Cambie chain of privately owned "full-service" hostels - which include pubs and restaurants and are developed from distressed buildings.
"I don't think the student hostelling experience has been properly marketed," says Yehia.
But, he adds, the hostelling industry has operated worldwide for more than a century with facilities run by non-profit groups, noting that low-budget travel - in the form of backpacking - is "a rite of passage."
(Monte Stewart can be reached at monte@businessedge.ca)
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