Group Germain still hoping to build airport Alt Hotel in ‘near future’ after tax break rejected

Alt Hotel at airport Group Germain
Group Germain is proposing to build a 180-room hotel that would be attached to the Ottawa airport terminal. File photo

The company whose plan to build a new hotel at the Ottawa International Airport became embroiled in controversy when it applied for and was denied a municipal tax break says it still hopes to complete the project in “the near future.”

In an email to OBJ on Monday, Group Germain’s vice-president of operations, Hugo Germain, said the Quebec-based hotel chain is still working with the Ottawa International Airport Authority on a proposal to build a 180-room Alt Hotel that would be attached to the airport terminal.

“We remain in close communication with the airport authorities and we are working very hard to try to get this development project started,” Germain said.

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Group Germain announced plans to build the hotel in early 2019 and initially hoped to complete the $40-million project by the end of the following year. 

But the pandemic delayed construction of the hotel, which – like other Alt-branded airport properties in Toronto and Halifax – would offer direct entry to the airport terminal via an indoor skywalk. 

Last year, Group Germain applied for a tax break under a new community improvement plan (CIP) for the airport region aimed at spurring new development around the terminal. It would have given the company a discount of up to $13 million on its municipal property tax bill over the next 25 years.

But the city finance and corporate services committee’s vote on the proposal in early April ended up deadlocked at 6-6, and a week later full council rejected a revised plan that would have seen the firm’s tax break capped at $3.7 million over a maximum of 10 years.

Following the vote, Group Germain said it would “go back to the drawing board and hope we can find ways to make this project work.” 

In an update at the airport’s annual public meeting last week, Ottawa International Airport Authority CEO Mark Laroche said the hotel chain “was hard-hit by the pandemic” and faces “mounting construction and material costs” that could threaten the proposal.

“Airport-connected hotels are highly desirable and expected of a world-class hub airport,” Laroche added. “We continue to work with Germain Hotels to find a way to move the Ottawa airport project forward.”

On Monday, the company said finding a way to make the proposal financially viable “remains a major challenge” due to the magnitude of the required investment.

“We were, of course, disappointed with the outcome and the rejection of our request for access to the CIP, which would have allowed us to mitigate part of the risk during the startup of the hotel,” Germain said. “The work continues with our team of professionals as well as our builder, and we hope to be able to complete the project in the near future.”

Council members who voted against the CIP proposal for Group Germain, including Mayor Mark Sutcliffe, said they were opposed to giving tax breaks to private businesses. Some, such as Coun. Jeff Leiper, also questioned whether there would be enough demand for such a hotel. 

But Ottawa Board of Trade president and CEO Sueling Ching said the project is a “critical part” of the airport’s recovery plan, arguing it will make Ottawa International Airport a more attractive destination for airlines looking to add flights to the capital.

She said that while other major Canadian cities have offered cash incentives for air carriers to establish new routes to their communities, Ottawa chose not to do so, instead opting to set up the tax-break program for the airport area instead.

“We’re not trying to take a slice of the pie from the other hotels (near the airport) – we’re trying to create a bigger pie for everyone,” Ching said. “This is an opportunity that fits in with the long-term growth plan for the airport authority. From that perspective, I think it’s critically important.”

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