A binding requirement to build the George Hotel and Resort never existed

Lawyer retained by Coast Clarion says covenant between town and developer has no timeline, no penalties, and cannot be enforced

(By News Desk)

Do we have any guarantees that developer Klaus Fuerniss will build a hotel first, Councillor Annemarie De Andrade asked at the May 19 council meeting (see 52:20 mins.) where a two-year extension of the development permit for The George Marine Resort and Residences was approved. 

“I believe there’s a resolution from council that requires that a hotel be built and that the occupancy permit will not be issued for the residences until the hotel is completed,” Chief Administrative Officer Emanuel Machado replied. “That’s in the development agreement. But we can confirm that with [the] planning [department].”

Councillor Stafford Lumley was sure of it, too: “I’d be willing to bet a lot of money, because I can remember very vividly a motion that was made by then-Councillor Jeremy Valeriote, and the CAO is correct, there is a condition that until the hotel is built, nobody can occupy the residences. It’s in the agreement. 

“I mean, you could roll your eyes, I guess, but it’s in there. The last council thought it was prudent to put that in there so that he couldn’t — exactly like you’re saying — couldn’t build condos, sell them, and go ‘oh, I’m not going to build a hotel anymore.’ It’s actually there, I mean, you should look into it if you want, personally, or ask the planner, or Mani, to get that for you, but I know for a fact that it’s in there,” Lumley said.

The Coast Clarion followed up and asked Machado where this agreement could be found. A check by The Clarion of the development agreement found it does not contain a requirement to build a hotel, let alone a clause stating that occupancy permits for the residences cannot be issued until the hotel is completed. 

Machado did not respond. 

More than a week later, after an email to the mayor, he said the director of planning would answer the question.  Two weeks later, Lesley-Anne Staats emailed that “there are a number of covenants registered on the title of the property, restricting the land use of the property, including the development agreement, the hotel-use covenant, the flood covenant, and the land-exchange agreement.”

There is nothing in the development agreement, the flood covenant or the land-exchange agreement about a requirement to build a hotel.

But the hotel-use covenant  says a hotel must be built, and it specifies what kind of hotel: The George. It does not say that the hotel must  be built first, and there is no mention of occupancy permits for the residences not being issued until the hotel is completed. 

The Clarion took the covenant to Gibsons lawyer James Graham for an assessment. 

“There is no real requirement to build a hotel in this covenant,” he said. “First, there is no timeline. When must the hotel be built? It does not say. It could be 25 years after the condos, or never. There is nothing in here that says that both are to be built at the same time.

“Second, there is no mention of penalties if the hotel is not built. How is the town going to enforce this? I can’t see why he couldn’t just say: ‘I built the condos, now I don’t have the money for the hotel’.”

The town would have had an opportunity to impose conditions when the developer asked for the two-year extension of the development permit, Graham said. “‘You have to build a hotel and we set a timeline, and if you don’t comply, we fine you,’ the town could have said.”

All the covenant does is restrict the use of the land. Only condos and a hotel with The George Hotel design can be built on the site, and the covenant stays with the land, whoever owns it, Graham said. 

The George Residences sale centre in Lower Gibsons has closed; the space is for rent. The George Marine Resort and Residences website has not been updated since 2017. The Klaus Fuerniss Enterprises office in Kern’s Plaza has also closed. If the site is sold, a new developer can only build condos, and a “George” hotel. Or no hotel.

Lawyer’s fees for this article and the cost of title searches were paid for by readers of The Coast Clarion. The writers are not paid. If you find these articles valuable, please consider a donation.