Sylvan Lake's Best Western Plus Chateau Inn on Lakeshore Drive has applied to the town to convert to apartments.
Photo from Best Western Plus Chateau Inn Facebook page

Sylvan Lake hotel eyeing apartment conversion to cope with economic downturn

Oil and gas industry struggles and pandemic made hotel unprofitable

Hit hard by the province’s economic downturn, another Sylvan Lake hotel is looking to convert rental rooms into apartments.

Best Western Plus Chateau Inn at 5027 Lakeshore Dr. has applied to turn 72 guest rooms into 57 apartment suites in a $2 million project. Forty-two studio units, nine one-bedroom apartments and six handicapped accessible one-bedroom units are proposed.

The ground floor, where a restaurant, breakfast lounge, business centre, exercise room and pool are now located, would be converted into retail commercial space, according to an application going to the town’s municipal planning commission on Monday.

Best Western’s move is being made because of the sluggish economy, says a letter from owners Chateau Inn Ltd. to the planning commission. Chateau Inn Limited owns the nearby Chateau Inn Suites.

“Due to the economic downturn, specifically the oil and gas sector in central Alberta, the hotel has not been economically viable for the past number of years,” says the letter.

“The situation is further exasperated with the COVID-19 pandemic reducing the normal tourist visits in the summer.

“The continual business loss is not sustainable.”

The hotel was opened in 2011 and has a prominent location near the town’s downtown. The ground floor will be converted into three or four commercial units and a private landscaped outdoor space will be created for building tenants.

Little will change in the building’s appearance along Lakeshore Drive. The conversion will “positively enhance the pedestrian experience on Lakeshore Drive,” say the developers.

In a report to the planning commission, senior planner Kim Devlin recommended approval of Chateau Inn’s plans, noting that the town’s Sustainable Waterfront Area Redevelopment plan promotes mixed-use development in the lakeshore area that will encourage more commercial development and year-round activity.

This is the second Sylvan Lake hotel that has responding to the economic environment by converting to apartments.

Lost Harbour Inn, at 5312 Lakeshore Drive, was given approval last June to convert its 28 hotel units into 16 apartments. Nine two-bedroom suites and seven one-bedroom units were approved.

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