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Hotel chain enters agreement of purchase for Aspotogan Sea Spaby Adam Jacobs
An aerial view of the Aspotogan Sea Spa.
ASPOTOGAN - The Marriott hotel chain has entered into an agreement of sale to purchase the dormant, unfinished Aspotogan Sea Spa.
The sale, however, isn't imminent. Prior to a sale the terms of the agreement must be met.
Michael Beckley, Marriott's senior vice-president of development, recently confirmed a partnership with Westerkirk Capital to potentially buy the 131-room hotel and spa.
"We've had a team of 12 people in there, architects, designers, engineers, to figure out if this is possible," Mr. Beckley said.
Jim Spatz, of Southwest Properties and part owner of the spa, said his group has been trying to sell the spa since it bought it 10 years ago.
He confirmed a sale was contingent on the terms of the agreement being met. Those terms include a full investigation regarding the condition of the site by the people of Marriott and Westerkirk.
"It's not a case of walking in there, furnishing it and starting up," Mr. Beckley said. "We have to determine what it would cost to get the building into shape and most importantly if there would be a return on the investment."
The cost of bringing the building up to standard could be in the neighbourhood of $10 to $20 million, he added.
"We don't know what kind of shape the air-conditioning system is in," Mr. Beckley said. "We don't know what kind of shape the electrical system is in. We don't know if the roads are in the shape we need them to be. There are a lot of questions to be answered."
Mr. Beckley said getting financial help elsewhere is also being considered.
"We may well need government help at that time," he said.
The half-built spa was abandoned in 1994 when Bavarian owners and developers Wolfgang Spiegelhauer and Brigitta Hennig ran out of money, owing contractors $4 million.
Mr. Spatz and George Armoyan bought it a few years later at a tax sale for $500,000. The 175,000-square-foot spa sits on 24.57 acres of land.
Over the years numerous attempts to sell the property fell short for a variety of reasons, Mr. Spatz said.
"A couple of previous times we came close [to selling]," he said. "The closest was interrupted by 9/11 [United States terrorist attacks on September 11, 2001]. After that a lot of tourism initiatives were put on the back burner."
Should Marriott purchase the spa, Mr. Beckley said the inside layout would have to be redesigned to fit the company's vision.
"We'd likely make the spa quite a bit smaller," he said. "We're looking at possibly a four-star hotel that caters to high-end customers during the tourism season, but also that caters to conferences, especially during the slow-down months."
Bob Mussett, of brokerage firm CB Richard Ellis, has been searching for about a year to find a prospective buyer.
"Marriott isn't new to the spa world," he said. "And they've put down a pretty aggressive position in Canada, including Atlantic Canada."
In fact, Mr. Mussett helped broker a deal two years ago with Marriott and Westerkirk for the former Nova Scotia Casino waterfront hotel.
"I don't think you can compare that location [Aspotogan] and what services they're going to offer to anywhere else," he said. "The setting is spectacular."
But, again, Mr. Mussett said no deal has been finalized. "There's still a lot of work to do."
posted on 011508
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