This is Robert Mackenzie presentation to the LVEC public meeting held April 25th 2005 at City Hall.
City Council should slow the rush to judgment on the proposed LVEC. The estimated cost has already escalated from $28M to the $40M level not including land costs and possible business relocation costs. It is a major investment and if we are going to proceed we should make our best efforts to understand all the implications before deciding.
The financial and economic implications of the proposed LVEC are substantial. If financial resources are spent on the proposed LVEC, what facilities and services will have to be reduced, postponed or put off indefinitely ? Unless $40M lands unexpectedly on City Hall's doorstep, a decision to proceed with the LVEC will mean less financial resources for other civic facilities and services. What are the opportunity costs? In what way will the expenditure on the LVEC impact the City's capacity to support other civic requirements?
The Business Plan fails to set out the net economic impact of the proposed LVEC on the community. Presumably the Kingston area has only so much money for entertainment so therefore much of the money spent at a new LVEC would simply be diverted from present entertainments. Will there be entertainment losers? Or will the magnitude of the new money that would be available for LVEC entertainment offset any loses? What will be the source of the new money?
Should the City be further involved in subsidizing the entertainment business? Hockey interests stand to gain financially from potentially larger gate receipts. Out of town entertainments would welcome yet another civically subsidized entertainment venue.
The Business Plan makes no effort to address the extensive writings in the field that conclude that the economic impacts of sports and entertainment facilities are typically overstated by proponents. (e.g. C.D. Howe Institute Commentary No. 161, Bread and Circuses:The Local Benefits of Sports and Cultural Businesses 2002)
The Business Plan states that six sports and entertainment venues, ranging in size from 4,000 to 9,000 seats in the arena bowl have been constructed and opened in Ontario over the past several years and others have been reconstructed. Yet the Business Plan fails to provide any hard evidence as to the financial experience of these facilities or their economic impact on their communities Instead the Business Plan contains statements such as that by the Mayor of London stating how the John Labatt Centre was creating a new "energy" and a "bustling" atmosphere in the core. But at what cost? The Business Plan makes no mention of the $4.5M debt charge for the John Labatt Centre provided for in London's 2005 capital budget. London's small share of the operating profit will not go very far to cover a debt payment of that magnitude. The Mile One Stadium recently built in St. John's had losses of just under $1M ($ 967,540 and $964,483) (Telegram, March 29) for the last two reported years. There is no doubt other LVEC like facilities recently built in Canada about which much could be learned. Why has this most relevant of information not been included in the Business Plan? This is the type of information that councillors should have. The Business Plan ignores bad news that is not favourable to the proposal.
The debate in London about the merits of the John Labatt Centre Centre continues. On April 13th London's Board of Control (Report, Item 30) recommended to City Council that the civic administration be requested to report back to the Board of Control in two months regarding the impact of the John Labatt Centre, the Covent Garden Market and the Central Library on downtown London including assessment and growth prospects.
The London Free Press in a subsequent editorial (April 18) stated that the independence of such a study would be vital and that having city staff do the study was akin to asking someone to write their own job performance appraisal. The Free Press stated that many of the civic politicians who approved various downtown projects including the John Labatt Centre were still on council, and staff members who worked on them were still employed by the city. The objectivity of any such study would be questionable and such a study would be better left to independent consultants. The John Labatt Centre has been built but it appears that the debate over its financial and economic merits goes on.
City Council should commission an arms length business plan that fully considers the financial and economic impacts in a broader prospective. It would be reckless for councillors to rely on the current deficient Business Plan .
LVEC. Kingston should do its homework before building the proposed LVEC ...NOT after it is built as in London.