“If we build it, they will come,” said MacKay of the convention centre, discounting criticism that the business case for the convention centre is overblown. Building the convention centre, said Mackay, will “take the ‘no’ out of ‘Nova Scotia.’”
MacKay’s announcement represents a $4.4 million increase from the original $47 million ask from the federal government. The exact costs of the proposal are hopelessly convoluted; originally the cost of the convention centre alone were said to be $159 million, while the complete complex, including the convention centre, a hotel and a “financial centre,” were said to be $500 million. But private developer Joe Ramia has never made his books public, and it’s impossible to separate the convention centre from the rest of the complex.
In any event, the provincial and municipal governments have agreed to a complicated financing scheme for their portions of it---the province will assume property tax, but each level of government will each pay capital costs of $56 million amortized over 25 years, and split $2.9 million for operating expenses. Moreover, under the deal the city will be responsible for half Trade Centre Limited’s budget shortfalls, a responsibility that in the past was covered almost entirely by the province; last year, some $5 million was transferred from provincial accounts to TCL to cover past losses.
In a scrum with reporters after the announcement, MacKay acknowledged that the extra $4.4 million from the feds reflected an increase in Ramia’s costs, and that the figure was arrived at after considerable negotiation. Premier Darrell Dexter said that the province’s cost had not increased, but he seemed to be referring to the immediate costs as outlined in the provincial-municipal agreement.
But the convention centre proposal is tied into the financial centre---an 14-story building that Ramia says will house a large financial services firm he has lined up.
“I would assume any building that doesn’t have any tenants is not [viable],” said Dexter. “Of course he has to go out and make sure he has tenants and work his business model in order to support the project.”
On that note, I asked, is there any promise of future payroll rebates for a tenant in the financial centre?
“No,” said Dexter.
There’s been no conversation about that?
So we’ll never hear about conversation---
“No, I’m not saying that,” interrupted Dexter. “You asked me if there has been any and I’m saying there’s not. But you know something, if we can use payroll rebates to attract good, solid financial services companies to this province, I’m more than happy to talk about it.”
How much would you be willing to pay in payroll rebates? I asked.
“That’s a ridiculous question,” replied Dexter. “It’s a ridiculous question because companies that come here come with a business plan in order to be able to fit within the province’s program. You’re trying to speculate about something that currently doesn’t exist.”
For the record, financial services firm Citco, which has already been promised up to $7 million in payroll rebates for increasing operations in Halifax, was the official sponsor of the chamber’s breakfast. It’s widely speculated that Citco will be Ramia’s tenant, and will seek additional payroll rebates; if so, the amount of the rebates should be seen as an additional taxpayer subsidy for the convention centre.
From here, Ramia and he province have to formalize their agreement in a contract, and then Ramia can start the design and construction process. MacKay said he expected the convention centre to open in 2015.