City of Karratha moves forward with Quarter Hotel after passing motion to enter an MOU with new proponent

The City of Karratha is in talks with a new proponent to “firm” the design and schedule for the Quarter Hotel which was described by the previous developer as untenable in the current building market. The $20 million Quarter Hotel project was thrown into turmoil earlier this year when the then proponent Pacifica Developments wrote to the council that it would be unable to meet the requirement of beginning on-site construction by July 1. The local government then wrote to Pacifica to formally terminate the memorandum of understanding as of May 13. It was the latest setback in the delay-ridden project, which saw developer Pacifica put the three-level 100-room hotel on hold last October because the cost to build had increased by up to 40 per cent. At the July council meeting, local councillors endorsed an amended confidential motion for City officers to proceed with the highest ranked proponent to firm the design, appearance, quality, cost and schedule of its proposal with the intent to negotiate a memorandum of understanding, and to draft a business plan if necessary. The endorsed motion also called for officers to provide council with a report on the outcome by October. A City spokesperson said the Council remains committed to seeing a hotel developed at The Quarter site. “The City received a good response to its request for proposals for the project and is currently in negotiations to establish an MoU with the highest ranked proponent of that process,” they said. “While the project has always had its challenges the City and the proponents are confident that the project can be delivered.” Councillors modified the officer’s recommendation to outline the next steps in the process for delivering the Quarter Hotel development. It is the first step forward for the project after proponent Pacifica Developments wrote to the City in April stating it was “untenable” to build the hotel because construction costs had increased dramatically and it would be unable to satisfy the condition of the agreement to start on-site construction by July 1. Speaking to the Pilbara News in June, then proponent Pacifica Developer’s John Zendlar said no amount of activity by the developers would alleviate the construction affordability crisis in the Pilbara. “It just was completely untenable to build a hotel in this construction market,” he said. However, City of Karratha Mayor Peter Long at the time said the City still felt a hotel on the site was viable and was pursuing new proponents. “We think that there won’t be a problem filling up — particularly over the next five years where there’s going to be so much work happening,” he said. “So we think that it will be viable, and certainly the proponents that have been approaching us they think they can do it.”