Municipal leaders in the Yarmouth area are welcoming $1 million in economic support from the Nova Scotia government for a struggling hotel.
The money will be used to upgrade the Rodd Grand Hotel and convention centre in Yarmouth and will protect 50 jobs at the hotel, which has struggled since the province cancelled its subsidy to the high-speed ferry between Yarmouth and Maine.
"For the Grand Hotel, we need that in place for tourism infrastructure and part of the money will be for renovations starting next year," said Phil Mooney, the mayor of Yarmouth.
The support includes a $500,000 grant to support the hotel's operating losses and a $500,000 forgivable loan for structural repairs that would be based on employment levels and on the understanding the hotel would continue operations over the next five years.
Mooney told CBC News that Mark Rodd — president and CEO of Rodd Hotels and Resorts — was worried about how to continue to employ the 50 people working at the Rodd Grand Hotel.
"He was concerned about what was happening to the tourism industry in Yarmouth so this is a welcome announcement, not only for jobs but the jobs that are created because of events coming to Yarmouth," Mooney said.
The Rodd chain used to operate a second location in the town — the 65-room Rodd Colony Harbour Inn — but that closed earlier this year after 40 years of operation.
Rodd said at the time that the main reason for the closure was the town's failure to secure a new ferry operator to resume service on the Yarmouth to Maine route.
Opposition critics said the financial assistance to the Rodd Grand Hotel proves the province made the wrong decision in cutting the subsidy to the New England ferry two years ago.
Zach Churchill, the Liberal MLA for Yarmouth, said the money amounts to a "million-dollar Band-Aid" for the area's continuing economic problems.
"The owners of the Rodd Grand Hotel have been very clear that cutting the Yarmouth ferry has impacted their business," said Churchill.
But Percy Paris — the Minister of Economic and Rural Development and Tourism — said the hotel had been losing money years before the ferry service closed because of a drop in visits from U.S. tourists.
Mooney said business leaders are still working to find a replacement operator for the ferry.
"People are still down here kicking tires and looking at our terminal so hopefully we have something for next season or 2013," he said.
Area also hosting sporting events
In addition to the $1 million for the Rodd Grand Hotel, the province also announced $250,000 to support an international hockey tournament next fall that will be hosted in the town.
The 2012 World Junior A Challenge is expected to attract 800 visitors and teams from Russia and the U.S., with an anticipated $2 million in spinoff revenue.
The area is also hosting other sporting events.
"We have the Acadian Games which is going to be early spring, summer, which will basically fill all our hotel rooms here in southwestern Nova Scotia for up to two weeks," said Mooney.
Aldric d'Entremont, the warden of the Municipality of the District of Argyle, said he was glad to see the province also paying to hire an economic development officer in the vacuum left by South West Shore Development Authority.
The now-defunct development authority lost more than $200,000 in loans and left some municipalities on the hook for a $590,000 line of credit.
"We haven't had an RDA (Regional Development Agency) now for a year and a half and we aren't going anywhere without one," said d'Entremont.
"I think it's very important that we have that."