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Skwachàys Lodge opened in 2012 after $10-million in renovations. Now, it’s being closed for conversion to supportive housing.Jennifer Gauthier/The Globe and Mail

A Vancouver hotel designed to showcase Indigenous art and that garnered international praise is ceasing operations so it can be completely converted to supportive housing.

The 18 hotel rooms in the Skwachàys Lodge, which had been decorated in Indigenous themes by local artists, along with another 24 rooms in the same building that had been rented for low rates to others working in the arts, will be completely repurposed for people needing supports. The B.C. Indigenous Housing Society, which operates the building with funding from the province, says the building would be better used for vulnerable people on its waiting list.

TIME magazine listed the hotel in 2018 in its list of 100 “world’s greatest places,” noting that it was a facility that “immerses guests in Native art – they can take classes on beading, tribal art and spoken-word poetry – and also empowers the people who create it.”

It was mentioned again in the TIME list of 2023 when all of Vancouver was added. It was written up favourably over the years by Condé Nast Traveller, Afar magazine, and Fodor’s. It also won federal tourism awards, as well as a provincial award for its social-enterprise mission.

But the CEO of the housing society, formerly called Vancouver Native Housing, said the operation wasn’t functioning well.

“The business model for the hotel was not sustainable nor profitable over the long-term. Following the pandemic this became very clear to us,” society CEO Brenda Knights said in an e-mailed statement to The Globe and Mail.

Ms. Knights also acknowledged that the society had recently investigated a complaint made by one of the artists that she was never paid for work done on some of the rooms back in 2012.

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The hotel was won multiple tourism awards and been written up in magazines including TIME and Condé Nast Traveller.Jennifer Gauthier/The Globe and Mail

The change is being welcomed by the Aboriginal Management Housing Commission, an umbrella organization that directs funds from B.C. Housing to Indigenous housing groups. It said in a statement to The Globe and Mail that the 42 rooms at the lodge will provide “much needed additional supportive housing in the market.” There are currently a couple thousand people on the group’s waitlist for Indigenous housing.

News of the closure has shocked and disappointed two of the people who came up with the innovative idea, as well as the local Hastings Crossing Business Improvement Association.

The closure has not been publicly announced and the hotel still appears as a potential option on third-party booking sites, though efforts to book in December and beyond will indicate that rooms aren’t available. The gallery that had been a prominent feature of the hotel closed several months ago.

“I am deeply disappointed. We were running at 85-per-cent occupancy on an annual basis in my time,” said former Vancouver Native Housing Society CEO Dave Eddy, who left the organization in early 2022 after 21 years there.

“The beautiful thing about Skwachàys was that it was a social enterprise.”

Mr. Eddy came up with the idea for the hotel and gallery after running into an experienced hotel operator, Jon Zwickel, who got excited about the idea of turning the rundown residential hotel into something that would be a showcase for Indigenous art.

Mr. Zwickel, now involved in developing a hot-springs resort in Whitehorse, got friends in the design business to come up with remodelling ideas. Mr. Eddy found artists, people already living in the building, who each came up with art for two or three rooms apiece. Prominent Chinatown architect Joe Wai designed a longhouse-like structure that sits on top of the 1913 building, blending its Victorian look with an Indigenous element.

The society spent $10-million to renovate the building, which opened in June, 2012.

The hotel was won multiple tourism awards and been written up in magazines including TIME and Condé Nast Traveller.

Mr. Zwickel was baffled as to why the society was closing the hotel, given the shortage of hotel rooms in Vancouver and rising hotel-room prices.

He also said it had been a powerful force in helping Indigenous artists promote their work and gain confidence about what they were doing.

“On numerous occasions, the hotel guests would set up a meeting with the artist and they ended up getting commissions.”

However, Lu-Ann Neel, one of the original artists who did design work for the building, said Mr. Eddy asked the artists to donate their work. Ms. Neel, whose work is available at several galleries in B.C., refused to donate her work and has since complained she wasn’t paid.

Mr. Eddy said the arrangement with the artists was that the gallery would buy the rights to their work, then split the royalties they’d get from Canadian Art Prints Inc., a major retailer of Indigenous art. As well, their art was displayed and frequently purchased in the gallery, he said.

Ms. Knights’ e-mailed statement to The Globe and Mail said the society is dealing with that internally, including through an independent, third-party investigation. It’s not clear whether any artists besides Ms. Neel complained.

The East Pender Street hotel appeared to be popular and doing well up to a couple of years ago, despite its location in the city’s troubled Downtown Eastside.

It was charging between $200 and $400 a night, depending on the time of year. And it garnered mainly positive reviews on tripadvisor.com up until early 2023.

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