Construction has finally begun on a downtown Nanaimo hotel to serve the Vancouver Island Conference Centre, which was finished in 2008.

“At this point, we have mobilized on site to start construction. A site fence is now up and an excavator is on site,” Ali Monsen, spokeswoman for developer PEG Companies of Utah, wrote in an email Friday.

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“You will see the excavator clearing and grubbing the site, and doing preliminary earthwork. We are thrilled to officially be in the ground and look forward to hosting a ceremonial groundbreaking in conjunction with the city in late January.”

The planned nine-storey, 172-room hotel, called the Nanaimo Courtyard by Marriott, at 100 Gordon St. is expected to open in 2021. Construction costs have been estimated at $22 million.

“[We’re] certainly starting to see some activity,” Dale Lindsay, general manager of development services for Nanaimo, said Friday. “They have given us a plan on how they hope to move forward and, so far, they are working within that plan. So, [it is an] exciting time and [we] hope to see them continue.”

Concerns had been raised this month as critical deadlines to begin work approached with no sign of promised construction. If site work had not started by month’s end, PEG would have been required to apply for a new and more expensive building permit.

“As long as they continue, and we are confident they will, there’s no need to renew the building permit,” Lindsay said.

Mayor Leonard Krog said he was delighted to see work begin on such an important community project. The hotel, considered key to downtown vitality, is one of two important projects for the city, along with a hoped-for fast-ferry between Nanaimo and Vancouver, Krog said.

The municipality has spent close to two decades trying to get a hotel built on the property to support the nearby conference centre at 101 Gordon St. In 2017, PEG was selected to purchase the city-owned lot for $750,000, on the condition that the company build a hotel. The most recent assessed value for the 0.377-acre site is $731,000. Previous efforts to find a developer to complete a hotel on the property were unsuccessful.

Nanaimo council had the option — which it has not exercised — of buying the lot back if PEG had not spent $1 million in construction on the property by Dec. 7. A company official had said in mid-February that construction would start in about six weeks.

After months went by with no construction, PEG arranged a Dec. 16 meeting with council to discuss the situation.

At the meeting, Cameron Gunter, PEG’s chief executive, told council the project had begun, saying: “I appreciate the mayor and council’s patience with us. It’s been a long time coming.”

Gunter said of the upcoming groundbreaking ceremony: “We think it is very important for the community to be able to celebrate this long haul for us and for you.”

Construction of the steel-and-concrete building is estimated to take 12 to 19 months.

cjwilson@timescolonist.com