Duncan-based non-profit restores rundown hotel as a community hub
>> Lee Herrin
When most Victorians think of Duncan, they think of the strip of gas stations, fast food joints and shopping malls just north of the bridge over the Cowichan River. But that’s not really Duncan—just the strip on the highway. The actual town of Duncan is a few blocks west and it’s really quite charming if you’ve never been.
Across the tracks from the old train station there are two bright and colourful buildings separated by a small parking lot: one is the privately owned Duncan Garage, a postmodern community centre complete with a café and bakery, an organic market, a used bookstore, a hair salon and a variety of other small tenants; the other is the newly revitalized “Station,” a mixed use building with green retail businesses, a commercial kitchen for rent, non-profit offices, and 20 housing units upstairs.
The Garage has been going strong for well over a decade as a vital part of the community, and was the pioneer on the block in terms of revitalizing the area. For most of that time, however, the Phoenix Station Motor Inn next door was a shabby establishment, operating illegally as a rooming house, and home to a rundown pub, a private liquor store, and some empty space formerly used as the motel dining room. At least it was, until it was purchased by the visionary Cowichan Green Community (CGC) Society in 2013, and transformed into “the Station.”
An enterprising non-profit
Cowichan Green Community (CGC) unofficially began in 2001 as an environmental-based community outreach project established by passionate volunteers to promote energy efficiency, healthy housing and environmental sustainability in the Cowichan Valley. In 2004, CGC registered as a Society and increasingly began to focus on food security.
In 2009, CGC located downtown Duncan and opened a new Green Store, a large community space, and a bright and beautiful office. At that location, CGC developed a variety of social enterprises including an urban agriculture consulting business, Ceres Edible Landscaping.
The Phoenix Station Motor Inn before renovations. Photo: Cowichan Green Community
The Phoenix becomes the Station
By 2012, the Phoenix was struggling, and was looking for potential buyers. At that time, another non-profit organization was negotiating to purchase the building, and approached CGC and asked them to become their anchor tenant on the main floor. The other non-profit wanted to convert the hotel rooms into transitional housing, and put offices where the liquor store and pub operated. At the time, it seemed like a great match, so CGC quickly began packing boxes with a move-in date of September.
By October, CGC was settled in, though the pub, liquor store and rooming house were still in full swing as the details for the sale were being finalized. However, negotiations between the non-profit partner and the Phoenix’s owners were not going as planned. The deal fell through, leaving CGC alone renting space in a building that seemed destined to remain undesirable.
Other offers to purchase the building were rumoured, including a company that wanted to rejuvenate a late night cabaret and cancel CGC’s lease. Having just finished unpacking, the CGC team was not keen on moving again, and so the question arose…what if?
By December 2012, after a few frantic meetings, CGC’s Board of Directors and their Executive Director, Judy Stafford, put in their own offer to purchase the Phoenix. The deal, with many conditions, was set to close in June 2013. Board members put up their own money for the deposit, but most felt that ultimately the deal was risky and would be unlikely to close.
Ups and downs
In any project, there are ups and downs. Almost right away, a suitable anchor tenant showed a willingness to sign a long term lease. That just left the top floor. CGC explored an agreement with BC Housing for the apartments upstairs, but they decided not to enter into an agreement. Time was ticking.
I first heard about the CGC project in November of 2013 at the BC Non-Profit Housing Association conference in Richmond. Judy and her Board Chair, Bev Suderman, were pitching at a “Dragon’s Den” event where they were looking for help, investment or advice on their project. I approached them following their presentation, and I told them a little about our experience here in Fernwood with the 2005 purchase of the Cornerstone Building. We arranged to meet in December.
We met and shared a few laughs about our respective willingness to take on risk. We also gave them confidence that it would all work itself out—eventually! Fernwood was living proof.
The deal gets done
The CGC team eventually met with representatives from VanCity and new negotiations went into high gear. The VanCity Community Foundation contributed a $50,000 grant at the last minute that made the numbers work. In June 2013, CGC”H” (a taxable holding company wholly owned by CGC) was the proud owner of a 20 unit hotel with almost 10,000 square foot main floor retail space. But after the purchase had finalized and renovations had begun, the anchor tenant pulled out. CGC had to scramble.
A deadline for negotiating take-out financing approached, and then passed. CGC negotiated an extension from the credit union in order to complete the renovations and find new tenants, but the pressure was on. Board members who had pledged collateral were getting nervous. Also, as everyone who has done a major renovation knows—the bills keep coming, adding to the pressure.
But with tremendous courage and confidence, CGC prevailed. New commercial tenants were secured—Cycle Therapy Bikes and the Harmony Yoga and Wellness Centre. Both are aligned CGC’s vision of a more sustainable community, where the Station would play an important role in revitalizing downtown Duncan. The upstairs renovations were completed too, and all 20 suites were fully occupied by October 2014. In a real effort to protect the vulnerable, none of the existing tenants were displaced due to the renovations.
The first mortgage payment was made January 2015. The project took longer, and cost more than anyone thought before they started. But ultimately it all worked out, and the building is breaking even. After the renovations, CGC has a $1.78 million mortgage against a building appraised at $2.13 million. They also have a permanent home: CGC’s offices are also located in the building, along with a commercial kitchen that they rent out to small-scale food ventures, and the Garden Pantry store, CGC’s own specialty thrift store and social enterprise. Judy and Bev have told us here at Fernwood NRG that we inspired them, but they’ve inspired us too. Our hats are off to the Cowichan Green Community!
