I captured last night’s council meeting on video. Here’s the relevant 25 minutes, worth a watch:
I watched council deal with the issue for about 12 hours yesterday, until they kicked me out to go into secret deliberations. As council does after secret deliberations, they came back into public session and voted on a cryptic motion they agreed to in closed session. The city’s press release:
(Tuesday, November 9, 2010) – With an approved direction from Regional Council, HRM will now move forward to negotiate with the Province toward the development of a new Convention Centre.
The motion approved by a 22-2 vote of Council states, that Regional Council:
1) Support the development of a new convention centre, pending the conclusion of successful negotiations with the Province and the Federal Government.
2) Direct staff to enter into negotiations with the Province based on the conditions included in the incamera presentation of November 9, 2010.
3) Not release the in-camera presentation until after any negotiations for a new convention centre are concluded
4) Immediately release all public information on HRM’s website
Mayor Peter Kelly noted that with Council’s motion, HRM can now work toward replacing an aging and undersized facility with a new one of more than 306,000 square feet to be built by Rank Inc.. A privately- funded financial and residential tower and hotel would be built by Rank on the same site.“The evidence presented shows the business case is there for government to support a replacement for the existing World Trade and Convention Centre,” said Mayor Kelly. “We will be seeking a deal with the province, federal government, and the proponent that benefits the downtown, the economy of our region and the province, and is financially acceptable to our citizens.”
HRM will immediately commence talks with the Province in order to move the project forward.
The government of Nova Scotia announced its intention to support the convention centre in October and made its initial financial request for shared support from the municipality and the federal government mid-month.
The media reports this morning seemed to latch onto #1 above– and then latched onto “support”— but, talking with some councillors today, it’s clear that this is a very qualified motion.
Basically, the “support” wording was intended to throw the ball back in the province’s court—if agreement isn’t reached, it’s not because the city doesn’t support it.
As I read it, the city is attempting to protect itself from the very high risk of the new convention centre not making its promised return. In real terms, that means that the operating subsidy to Trade Centre Limited would have to be far larger than the annual $1.7 “operations and maintenance” line detailed in the provincial ask (page 13) to the city.
That $1.7 would be split evenly between the city and province–$850,000 each. Last year, the city’s subsidy to TCL was $570,000, and that amount increases each year only to the extent the consumer price index increases. So, even if everything goes to plan, an increase to $850,000 is substantial.
The risk is this figure balloons, and the sky’s the limit. So my guess is that the city’s negotiating position with the province is that the city’s risk should be capped at some amount– say, $1 million. I have no idea what the actual amount is, as it was determined in secret.
Whether that’s acceptable to the province is of course unknown.
So, this is by no means a done deal. At the very least, I see negotiations continuing, maybe past Christmas and into the new year.
This article appears in Nov 11-17, 2010.
Nice job putting the Simpsons episode in by mistake, probably more interesting then pathetic NS politics ha ha ha
oh and the link to a Russain website that illegally broadcasts TV epsiodes was a nice touch as well…..if you’d like to learn how to properly insert an HTML link gimme a shout LOL
The most remarkable news of Tuesday night came from the mouth of Mr Ramia when he said that there would be no hotel, office tower and retail without the convention centre.
Astounding.
Then he said he did not know how many rooms the hotel would have.
Which is the opposite of everything we have heard to date, including the real estate community who have repeatedly said that Mr Ramia had a a Plan B and a plan C if there was no convention centre.
The Ramia deal in simple English : Subsidise a convention centre so I can make money from an office tower and a hotel.
My offer to Mr Ramia : Take a hike, for free.
The Armour Group are prepared to build a new hotel and office development on the waterfront without any subsidy from the taxpayers of Canada, Nova Scotia and HRM.
If the Ramia deal goes ahead the Armour Group plan will be delayed for 5 years, as stated by Ben MacRea in an interview on CBC TV.
Tim,
Loved the video! Very snarky, which is why I like your articles.
Annie
Gee, I wonder if Tim might have, you know, posted the Simpsons on purpose.
If Mr. Rama thinks a convention centre will really be profitable – why doesn’t he build it himself?
I am curious as to how much of my municipal, provincial and federal tax dollar (per taxpayer) this is costing us? Can anyone do that type of figuring?
When did the HRM council solicit bids for a new convention centre? Can we see who were some of the other bidders?
Thanks to the coast for being a medium through which we can illuminate some of the issues in HRM and beyond.
I don’t believe there has been any promised return.
There are capital costs and building maintenance and improvement costs. Which are now being expressed in the form of a lease payment totaling, for now, about $375m but sure to go up. There have been wild projections about increased convention attendance. There has been hearsay about tenants for financial, hotel, retail and residential space. There has been a request for tax exemption.
There has been no representations about operating costs or profitability.
There have been calculations of spin-offs but no calculations of opportunity costs.
There has been no contemplation of the risks involved.
There have been calls to have faith.
The initial premise was Halifax is dying and this won’t save it but it will help. The conclusion was we should build it no matter what the risks or costs.
That bit of logic is so bollocked it’s meaningless. The premises are both wrong and the conclusion does not follow.
I see some potential problems with this project:
1. Procurement? As a commercial contractor in this city who deals with government projects almost exclusively, I have concerns over who will oversee the projects tendering process. With $157M of public money being injected into this “private development”, will any level of government have control? Ramia’s projects have a reputation in the city for running way behind schedule, due mainly to their business practises of not paying trades, and or shopping for better prices right up until the day the work needs to start. The average citizen might not understand this, but there is significant work ahead of boots actually hitting the ground, and this is amplified when the project is complex and/or has LEED requirements. Both the HRM and Province require bid security from Trades to ensure qualified contractors are chosen for work on their sites. This protects the taxpayer from financial penalty, should a trade contractor fail on a site. The Ramia’s will find this process as cumbersome and meddlesome, and would have zero experience with this type of procurement model.
2. The Architect? (no disrespect to Noel Fowler) does not have the capability to pull this off. Has anyone from the city seen his office?; reviewed the capabilities of his staff? I believe he works from a small office, and has minimal support staff. This model is very efficient (and cheap) for the apartment building industry, but is not well suited for large and complex projects. This project will require the dedication of a local Architectural team for 3 years minimum. I know people will point to the “Toronto experts” who are meant to oversee the design, as the saviors in this process. This generally ends up as the exact opposite of what should happen. The large Architectural partners from up the line will either have very little interest, leaving the lions share of work to fall on the under-equipped local, or far worse…we end up with a “God complex” egomaniac who will equate all opinions from the east coast as backward…case in point…NSP Bunker!
3. The Budget??? The numbers do not add up. Two major high rise developments (one being 17 story apartment, and one being 8 story hotel) in the downtown core within the past 6 years cost approximately $35M and $33M respectively. There is no way the numbers being advertised are real. I would argue that the developer has inflated the costs for all 3 components in an effort to skim public funding for his portion of the development. That could never happen? Why not?? If the fox is guarding the henhouse, and developed the original budget…Oh yeah, they had Deloitte complete a “shadow bid”. When was the last time accountants ever had something inflated…
4. The Rush??? Why so quick to endorse? Could we not get all of the relevant snag items ironed out before the “yes” vote. Short answer is yes we could have…we had time, but council was in a rush. I would argue that the more time we all (taxpayers) had to look at this, the more people like me would be converting toward the “not so sure anymore” side.
Good luck Halifax.