This is Betty Harlow's presentation to the LVEC public meeting held April 25th 2005 at City Hall.
My name is Betty Harlow and I'm speaking for Kingstonians Concerned About the LVEC.
Last summer, Council authorized the Steering Committee to proceed with studies in order to determine whether or not the Anglin Bay site was feasible.
The Business Plan shows that, from a financial point of view, the site is not feasible.
The Business Plan represents a "triumph of hope over experience": In denial about costs and wildly unrealistic about income.,
Building costs have gone from an initial 28.5 million to 37.5 million-so far: does anyone believe for one minute it will stop there?
Cost of land , relocation for a thriving marine manufacturing business, and environmental remediation: unknown. They're asking for a blank cheque on this one.
The guesstimate I keep hearing from people who know a little about this stuff: at least $50 million altogether-maybe more.
Except for London, the other recently built arenas (sorry, "Sports and Entertainment Centres") cost far less: Barrie, Brampton, Sarnia, Guelph, Mississauga-from $15 to 25 million
(Whig, Feb. 17, 04, National Post, April 23, 03, Windsor Star, April 8, 99, April 10, 12, 04, Guelph Mercury, April 1, 04).
Why is Kingston's LVEC so much more expensive? Because of the location on Anglin Bay. That's the source of the land costs (I don't think any other Ontario arena displaced a thriving business), and high building costs due to the engineering problems caused by the location and the need for a super fancy finish.
Revenues: The Business Plan assures us that its rosy projections are based on factual experience of other LVECs in Ontario. But we now know that even that roaring success, London's Labatt Centre, generates only $750,000. net profit-and that's before the private partner's $600,000. take. And it doesn't include London's yearly 4.5 million mortgage costs. Yet Kingston's LVEC business plan projects $829,000 and climbing profit for the city, even after the city pays $350,000 in management fees. This is supposed to pay the debt servicing costs of the 16 million the city will borrow. How can this be possible for a facility not much more than one half the size of London's, in a city one third London's size, with fewer anticipated events?
Listen London's deputy mayor, who ought to know a thing or two about this. He warns "This is pie in the sky that you will make money. It will never make money."( Whig , Sat. April 16)
Other recent Ontario LVEC's don't support these projections: Guelph has been unable to make its mortgage payments for years; Barrie either loses, or barely breaks even; Peterborough doesn't pay for itself. (Guelph Tribune, Mar. 8, 05, Whig, Feb. 17, 04, Peterborough Examiner, May 27, 04)
The Business Plan projects that regular OHL games will draw 4000 fans: more than twice the current M centre attendance. Ah, but the new venue will attract more people. Well, maybe for a while, but this isn't borne out by other recent facilities such as Sarnia and Brampton, where attendance went up at first, but didn't stay there (www.sarnia sports.com/SarniaSting2004-2005). Metro News, Thursday April 21, 05)
Grants: the plan relies on 8 million in government grants. Nowhere in the BP is there any evidence to support this. The "grants" chart on p. 55 of the B.P.shows only 1 recently built Ontario arena outside of Toronto: London, and it got only 5 million; Barrie got 2.5. There's no evidence that the others: Guelph, Sarnia, Mississauga and Brampton-- got anything.. (Whig, Feb.7, Feb. 16, 04; Windsor Star, April 8, 99, National Post, Aug. 23, 03)
Putting it together
The B.P. says that land costs and any grant shortfalls will come out of the Municipal Capital Reserve Fund: that's in addition to the 3.3 million they already plan to take. But if you add land and relocation and remediation costs (maybe 5 million?), a shortfall of say 4 million in grants (that's optimistic)-they'll be raiding the Reserve Fund for, say, 12 million-at a time when they need it for the Multiplex and Ravensview.
No cost to taxpayers?? Are you kidding?
This Business Plan is such a joke, you wonder if its really part of a different agenda: to push Council into selling the M centre after all.
This should never get to Council. But if it does, Council should at least insist on a peer review.