Why the convention centre sucks, part 1

Is building the convention centre proposed for downtown Halifax the right thing to do? “It’s a no-brainer,” mayor Peter Kelly told us, months before even one concrete number was placed before us. And now that some numbers have been made public, the official interpretation of these numbers is that the convention centre will prove to be of immense benefit, and there is something of an echo chamber of officials falling over themselves in praise for the proposal.

“This is the right decision,” says Infrastructure minister Bill Estabrooks. The convention centre is “an exciting opportunity for Nova Scotia,” says premier Darrell Dexter in an email to NDP members. “The business case for the tax (revenue) alone shows that it’s a good deal,” Halifax councillor Steve Streatch tells the Chronicle-Herald. “From what I’ve seen so far, this is a no-brainer,” says councillor Linda Mosher, echoing Kelly.

Still, while lots and lots of numbers are used to justify the foregone conclusion that the convention centre is a good idea, no critical analysis of those numbers has been undertaken. But even a cursory examination of the information put forward and the statements made by convention centre supporters shows that they contain a great many debatable assumptions, disputable claims, incorrect understandings of the numbers and, frankly, untruths—for example, the oft repeated claim that “12,000 new jobs will be created” is simply a baldfaced lie; it is unsupported by the documents convention centre supporters themselves use to make it.

I’m not against sensible development, and we definitely need a broad strategy for downtown development in particular. HRM By Design, the set of planning rules for downtown, isn’t perfect, but it’s a good attempt at striking a reasonable balance in the sometimes competing interests of development, high design standards, heritage protection (and perhaps more important, heritage promotion), attractive streetscapes, green space and the like. If we can strike the right chord, all of these interests should actually complement each other, leading to more, and more sensible, development. That’s a good thing.

But here comes this convention centre proposal—the largest single development proposal in the history of downtown Halifax. If built, it will quite literally determine the success or failure of downtown for the next century, so as a journalist it’s my job to critically examine every aspect of the proposal. And my opinion is that it fails the sensible standards we should be setting for downtown development. In fact, there are so many problems with the pro-convention centre argument that it’s hard to know where to begin, so I’ve decided to break up the analysis of those arguments into several posts. Over the next few days, I’ll take a look at the jobs argument, the tax argument and the economic impact argument, among others, separately. Today, though, I wonder about the options we haven’t heard about.

The missing alternatives

Let’s step back a bit and recognize what may be the biggest problem with the pro-convention centre argument: In all the discussion, nobody is asking “Is this the best possible use of the money?”

We are, after all, talking about a government expenditure of $159 million for construction alone, and $325 million for the total package of construction, financing, operation and maintenance over the next 25 years. This sort of money doesn’t grow on trees, so before getting into the pros and cons of this particular convention centre proposal, we should be asking ourselves what else we could be doing with that money, and what kind of potential returns for it could we get if we spent it on something else.

According to Jane Fraser—the executive director of strategic capital and infrastructure planning and Estabrooks’ go-to person on the convention centre—the new centre will generate $86 million in direct and indirect benefits over the next 10 years. I have no idea where she’s getting those numbers—like the jobs claim, it’s not supported by the documents—but for the sake of argument only, let’s assume the claim is correct. This assumption immediately leads to another question: How much would GDP increase if we did something else entirely with the money?

As a for-instance, I’ve long felt that the most important thing we can be doing as a society is reducing our dependency on imported oil. What kind of economic benefit would result if we invested $325 million in retrofitting houses to be more energy efficient? Preventing a significant chunk of our income from going directly to the House of Saud and instead recirculating the money here in the local economy is a potentially definable benefit—an increase of X amount in efficiency would result in $Y of savings, which according to the very same multiplier calculations economic impact firms used to figure the “indirect” impacts of the convention centre, would result in $Z of economic impact.

Maybe investing in energy efficiency won’t bring the best return for the money, but something else will. What about dumping the money in transit, reducing commuting costs? Subsidized day care so mothers can better compete in the work force, increasing their salaries and therefore their purchasing and taxpaying powers? These are the kinds of things I expected the NDP government to be investigating, right alongside the convention centre proposal. But absolutely no alternative uses for the money have been suggested, much less investigated to see if they could bring more potential return.

The pro-convention centre argument rests on the notion that the convention centre will increase future tax revenues and so down the road we’ll have more money to fund energy efficiency programs, transit and day care, should we wish to do so. But it could very well work the other way around too: if we fund energy efficiency programs, it will increase future tax revenues and then we’ll have enough money to build a convention centre. Why is convention centre-first, efficiency-later better than efficiency-first, convention centre-later? Especially since no comparison has been made.

This convention centre and no other

Even if the lack of alternative uses of the money can be waved away as unimportant and we suddenly all agree that a convention centre is the best use of tax money, the issue of alternatives doesn’t go away, because we have one convention centre proposal and no other.

Not only is a convention centre the best use of tax dollars, we’re told, but a convention centre with exactly 120,000 square feet, costing exactly $159 million to construct in a partnership with Rank Inc. and placed exactly between Argyle and Market Streets is the best of all possible convention centres—110,000 and 130,000 square foot convention centres need not apply, nor those that are publicly constructed, nor those on the waterfront.

The convention centre proposal has been clouded in secrecy and backroom deals from the start. As I reported at the time, the decision to build a convention centre through a private partnership was made entirely without public input, and the decision to move forward with this particular partnership with Rank Inc, for this particular site, was made by a small number of unelected bureaucrats—we were never even told who they were, exactly—meeting behind closed doors and in secret.

It’s important to note that there were other, arguably better, proposals. Here’s one of them, which I described in February, 2009:

I spoke with Colin Whitcomb, executive vice-president at Hardman Group. He says that his convention centre proposal called for tearing down the Cogswell Interchange, freeing up about 16 acres of land. About half of that– eight acres– would be devoted to streets, sidewalks and other public uses, and about half the remaining, four acres, would host a $120 million convention centre. The remaining four acres would be sold for private development. As Whitcomb points out, development in this area faces no height restrictions under the proposed HRM By Design guidelines.

As Whitcomb tells it, the city and province put out a call for “expressions of interest”—a request for “information on who your team was, generally what you were proposing to do and how you were proposing to do it—in broad terms.” Hardman was one of six groups putting forward proposals.

He expresses it diplomatically, but Whitcomb is perturbed about the procurement process. He complains that some of the competing bidders had had meetings with mayor Peter Kelly, and when he asked for the same, he was denied.

You can see some of Hardman Group’s proposal here.

Taking down the Cogswell Interchange has immense appeal—I’ve never met anyone who doesn’t like the idea. But a small cabal of bureaucrats decided that the plan had no merit. Why? They’ve never had to explain themselves, have never justified their reasoning; it was just rejected out of hand.

A cynic might suggest that the secret selection of a private partner for a site up the hill rather than the Cogswell site reflects private agendas at play. Maybe not, but without informed public debate at that early stage, we were put on a track that led us to an end result that is lacking.

For comparison, let’s look at the new Ottawa Convention Centre, which, with a $170 million price tag, costs roughly the same as the proposed convention centre for Halifax. As I pointed out last week, for that money Ottawa gets 192,000 square feet of usable space in a four-storey signature stand-alone building overlooking the Rideau Canal and downtown Ottawa, which is owned outright by the people of Ontario, forever. Halifax gets just 120,000 square feet of usable space stuck in two basement levels with a view of absolutely nothing, in somebody else’s building.

Darrell Dexter claims the convention centre is not a P3 project—I guess definitions of P3 vary, and I’ll explore that issue in the near future. But whatever you call the public/private relationship for the centre, one thing is certain: at the end of 25 or 30 years (the province has the option to extend the 25 year lease an additional five years), those basement rooms will belong to Rank Inc.

One MLA tells me that it should be expected that convention centres need to be rebuilt every few decades because of changing needs and circumstances in the convention industry. It’s an interesting argument, but I might point out that, say, St. Peter’s Basilica has been remarkably permanent with its ability to host large assemblies. Regardless, we should note that the present convention centre proposal is planned obsolescence—we’re going to need another one of these suckers in 30 years.

What’s yet another new convention centre going to cost in 30 years? Let’s say $300 million. Any responsible planning for that future need would include placing $10 million annually for 30 years in a capital account, but that real cost is hidden, unexpressed; it’s just a debt handed to the next generation.

None of the points raised in the above discussion have been addressed in the public debate over the convention centre. No alternative uses for the money have been suggested, and the alternative proposals for a convention centre were discarded without public explanation. Moreover, the public/private arrangement for the proposal we do have is a disservice to the public, giving us a crappy convention centre for the money, and handing a huge bill to the future.

For all of these reasons, it’s a horrible proposal. In upcoming posts, I’ll show how figures produced to support the convention centre proposal don’t stand up to scrutiny.

Related Stories

Halifax mayor met three times with convention centre developer during no-contact period

Peter Kelly says meetings with Joe Ramia were not improper.

Convention centre outranks capital funding of NS hospitals—on paper

Updated: Province puts Convention Centre on the books.

World-class convention centre “opens”

Despite today’s soft launch and nearly two years of repeated delays, the publicly funded $169-million Halifax Convention Centre is still not finished.

This article appears in Oct 7-13, 2010.