Owner hopes to open Reston bar within weeks

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This article was published 05/03/2015 (4088 days ago), so information in it may no longer be current.

While many small-town beverage rooms are closing down in Manitoba, one is getting a second life.

Don Kim purchased the Rest’n Inn in December in hopes of bringing a bar back to Reston after a fire in the restaurant forced its closure about four years ago.

The hotel side of the operation is open, and enjoying steady business, thanks to the healthy construction and oil activity in the southwest corner of the province.

But Kim is still working toward getting the bar — the real money-maker — up and running, hopefully in a month.

“Reston is the hub of oil,” he said. “There’s no place to go for the oil worker … they want a place to go for dinner.”

Kim is going against the recent trend of small-town beverage room closures, like the Balmoral Hotel, the Mariapolis Hotel and the Leisure Inn in Newdale, which all closed their doors within a week of each other in February.

The business model for small rural hotel beverage rooms is broken, according to the newly formed Manitoba Rural Hotel Association, which had its first meeting in Winnipeg this week to discuss concerns.

Video lottery terminal revenues and liquor vendor revenues are low, largely due to provincial taxes, according to the association’s hoteliers.

Hotels get to keep about 20 per cent of VLT revenues, whereas legions get 25 per cent and First Nations keep 90 per cent. And they’re only allowed to keep 17 per cent of revenue from vendor sales before PST and GST, compared to the normal retail rate of 30 per cent.

The Belmont Motor Hotel closed its doors in April 2014 after owners Eva and George Wiebe took a three-year run at turning the business around.

“We found immediately it appeared we were paying so many taxes in comparison to our income. Our overhead was flying out the door,” George said.

“VLTs … along with the restaurant, were the things keeping the thing going.”

Another concern for owners, brought up at the Manitoba Rural Hotel Association meeting, is the banks’ refusal to finance the hotels. And now some insurance companies don’t underwrite the bars either.

“(The bank) gave us a very minimal line of credit, even though I was depositing every week between $4,000 and $10,000 into the bank,” George said. “We were making good sales, but the bank wasn’t willing to increase because of risk … even though the numbers proved it was going up.”

But it wasn’t the taxation or lack of financial support that closed the 6,500-square-foot Belmont Motor Hotel — but rather George’s cancer.

And the couple were dealt a massive financial blow after they poured their life savings into ensuring the building was up to snuff for the buyer’s building inspector. But when the possession date came, the buyer never showed up.

“We ended up going into a huge amount of debt because it,” said George, who has gone through 14 chemotherapy sessions.

The bar and hotel is back up for sale by the man who first sold it to the Wiebes.

And for now, the tiny village of Belmont is still without a beverage room.

» gbruce@brandonsun.com, with files from the Winnipeg Free Press

» Twitter: @grjbruce