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History will inevitably and very soon show how Councillor Bittu George, Councillor Beth Pater, and Councillor George Sutherland, especially Councillor Sutherland, were utterly suckered by the excessive and structurally systematic influence of downtown business interests on Council.
It will soon be clear what the BIA has pulled off: credit for $3 Million, and it won't cost them a dime.
But what's also amazing is the financial plan calls for a minuscule $1.5 Million contingency, and the way the deal is structured, taxpayers alone, in addition to what they are already paying, shoulder all cost overrun risks. This is, quite simply, outrageous.
Here is what the Ministry Of Health Promotion, the source of $4 Million for Kingston's LVEC, is ostensibly all about : On the About The Ministry page:
The Ministry will help Ontarians lead healthier lives by delivering programs that promote healthy choices and healthy lifestyles. To do this the Ministry will work closely with partners, stakeholders and all levels of government.
In addition, the Ministry will facilitate access to information and programs by partnering with various ministries, including the ministries of Health and Long Term Care, Education, Agriculture and Food, Children and Youth Services and Labour on initiatives that can target specific sectors of society. The Ministry of Health Promotion looks forward to working with these partners and many others in establishing an active and healthy Ontario.
On the Sports and Recreation page:
The ministry encourages involvement in sport, recreation and physical activity for the health, social, and economic benefit of Ontarians and the communities in which they live. Through its support of the sport and recreation sectors at the provincial and local level, the ministry helps meet the government's priorities in health, education, job creation and economic growth and promotion of voluntarism.
The ministry contributes to a strong provincial sport system and the development of athletic achievement in Ontario. It fosters the involvement of children and youth in sport and recreation, recognizing their contribution to healthy child development and positive youth development.
Let's hope that the LVEC doesn't negatively affect these objectives in Kingston. How does this $4 Million handout for the LVEC affect other worthy causes and programs in Kingston? How does this affect Kingston's overall tally from this source? This can't be good. Is downtown Kingston stealing yet again from residents and kids all over our community?
The City website proclaims that Ontario Health Promotion Minister Jim Watson announced a commitment of $4 million to support sport and recreation development in Kingston. Mayor Harvey Rosen thanked the minister and Kingston and the Islands MPP John Gerretsen for funding that could help build a proposed sports and recreation centre serving the Kingston region.
Remains to be seen if this will be construed as money for "elite sport and arena-based entertainment".
Some early conclusions:
More to come...
CKWS-TV reports that Ellis-Don is the recommended firm to design and build the proposed LVEC.
What's not in the transcript is film of Cynthia Beach stating that we might see a 40-year term on debt being proposed for the LVEC.
Just how deplorable will LVEC project stewardship get? Remember, this is potentially just the begining.
Good odds that this is window dressing for the Minister.
Notable is frankness about the attractiveness of 5-6000 seat stadiums in attracting premium sporting events. Here in Kingston, project proponents are not above shamelessly holding-up potential Memorial Cup tournaments as a realistic expectation.
In Medicine Hat, unlike Kingston where the site is pre-determined by a back-room deal with the Downtown BIA (see also here), they publicly compared and contrasted 14 different sites throughout the city. The Nustadia report included a Site Analysis Matrix that equally weighted seven simple attributes.
How do you think Kingston's North Block would score in Medicine Hat?
Over the past five complete seasons, the Frontenacs have played 170 regular season home games and only 5 home playoff games. They have sold out the Memorial Centre exactly once, and have attracted over 3,000 fans only three times. Over that period, the Kingston Frontenacs have attracted over 2,500 fans (75% of arena capacity) to fewer than 10% of their games.
What evidence do we have that the Springer family will be able to support their end of the bargain, which relies entirely on their long-term ability to field a quality product on the ice that will attract 4,000-strong average attendance and a yearly average of four home playoff games per year over 30 years?
Without a quality franchise there will be no long-term large crowds, no prospect of long playoff runs, and no chance whatsoever of already improbable things like Memorial Cup tournaments. So far, with just five home playoff games to show for the past five years, the Springers are the weak link anchoring an otherwise very weak and dodgy arena project. The so-called benefits that stand to accrue to the Springers (who own the team, hotels, and lots of downtown property) is totally out of proportion to their contributions to the project, and to their track record on the ice.
|Full list of the 16 Kingston Frontenac crowds over 2,500 |
in the 175 games over the past 5 seasons.
(170 season and 5 playoff games since 2001-2002)
|9880||21-Sep-01||North Bay Centennials||2862|
A copy of this ad appears in Today's Whig Standard.
We've looked at another one of the ads here.
In effect, the city of Kingston is giving the BIA a 30-year mortgage at 4.57%. That's a sweet deal.
There's more: If interest rates rise over the next 30 years, which is probable, taxpayers lose again because the deal is at a low rate for a remarkably long term. The only party protected in all this is the BIA.
A reader named Graham adds:
I have reviewed the payment schedule for the BIA's $3,000,000. contribution to the proposed LVEC. The BIA's payments are structured to avoid most if not all debt repayment until sometime after the 20th year. Assuming that the City borrows the $3,000,000. on behalf of the BIA this means that the City will have to cough up $100,000 + in the first year and on a declining basis each year thereafter until the BIA's increasing annual contributions catch up to the shortfall around the 20th year. This can be seen from the first year's interest of $137,100. on $3,000,000. at 4.57%. The annual debt charges (debt retirement plus interest - compounded annually) would be about $185,000. on an equal annual payment schedule over the 30 years.
In short the City will have to meet the annual shortfall in the first 20 years or so by using taxpayers dollars in the earlier years until eventually recouped from the BIA. In effect the $3,000,000. BIA debt will balloon to say about $4,000,000. If the City chooses to structure this additional $1,000,000. dollars into its capital borrowing mix (by borrowing a bit more on other major capital projects) it could avoid the additional $100,000. demand for current tax dollars, but the effect would be a postponement of other capital needs until money from the BIA eventually comes in.
No doubt the proposed debt repayment schedule was designed to accommodate the BIA's plans for projects without a big increase in rates to its members in the earlier years - might generate complaints! Admittedly these figures are not too significant in the City's total operation but I hope you find them useful.
To the extent the 4.57% interest rate is below the City's borrowing rate it would constitute a subsidy or an effective contribution of less than $3,000,000.
There's more: Since the deal has a 30-year term, things that BIAs are supposed to fund according to the Municipal Act, like beautification and maintenance, the sort of thing called for in the Downtown Action Plan, must come from taxpayers instead. It is arguable, therefore, that ultimately the BIA contributes little or nothing to the LVEC's financing because BIA levies occur regardless, and are limited in practice to a reasonable maximum which they have already reached. So this "BIA contribution" money isn't new funding, it's existing funding with a convenient LVEC label on it. This money is "stolen" from the future things the BIA should, in fact, be paying for.
Want more? The BIA's contribution is fixed, and remains the same whether the building costs $37.3 million, $40 million, or $50 million, nor does it vary if the building spins rather less cash than predicted, and requires annual taxpayer subsidy to cover the shortfall.
Keep in mind that all the so-called benefits of the proposed Sports and Entertainment Centre, if any, accrue in near totality to some of the BIA's wealthier and currently influential members, facility builders and operators, the City of Kingston parking enforcement department, and not to Kingstonians at large.
Who speaks for the Kingston taxpayers in all this?
Not content with excessive systematic face-time with Council, the proponents behind the current $50,000 pro-LVEC ad campaign are apparently not above wildly overstating, even fabricating benefits to Kingstonians to pressure three swing Councillors to vote their way.
At tomorrow's Council meeting, Gerard Hunt, Commissioner of Finance and Corporate Performance of the City of Kingston presents to Council his 1st Quarter 2006 Capital Budget Status Report. Buried within unsearchable scanned graphics (as opposed to text which is easily searched) is the following information about LVEC project expenses. $804,004 to March 31, 2006. (The total to Dec 31 2005 was $719,843).
It's not clear whether this figure includes the considerable municipal staff time and other overhead allocations. We're guessing it doesn't.
Update: In the same report there are also references to the BIA's LVEC Levy:
LVEC Levy: is a special levy, representing the BIA's commitment to fund $80,000 towards the LVEC, as authorized by a memorandum of understanding between Council and the Board of the BIA [ed: full details here] in September 2005. A by-law authorizing this special levy will be presented to Council on May 30th; therefore, this levy will take effect upon passing of the appropriate by-law. Schedule C-5 attached to the by-law sets the rates and assessment upon which this levy is raised.
The photographs below, which are from the third and fourth photos in the Giffels / Norr image gallery, first show the North-West corner of the arena encroaching on Place d'Armes street. In the other view, there is no encroachment on Place d'Armes street. The model was altered between views in a way that benefits the Giffels / Norr proposal.
Somewhat lost in the model presentations are the proponent handout documents, which vary between two and six pages in length. The Giffels-Norr consortium's handout uses 150 of their 1,300 words lauding Kirk Muller, mentioning his name no less than six times in two pages. City of Kingston taxpayers will pay $50,000 for this bid.
There's a pattern emerging here: rolling-out a celebrity to plug holes.
It's notable that in the current issue, as well as the Fall 2005 issue wherein London, Ontario was prominently featured, there is never a mention of hockey rinks or stadiums of any sort among the features and assets used to lure conventions and conferences. You'd think that if a 200'x85' surface with bowl seating was a competitive advantage in luring conventions and conferences that somebody would be pushing that, yet nobody appears to be doing so, certainly not in The Globe, in this magazine or anywhere else.
Keep this in mind when LVEC proponents tell you that conferences and conventions is a notable reason to build Kingston's proposed LVEC.
The Peterboro Petes, who play in the renovated 3808-seat Peterborough Memorial Centre (see renovation details here), defeated the London Knights to earn the right to be the OHL's entry at the 2006 Memorial Cup in Moncton.
This is one of the Design-build RFP addenda wherein bidders' written questions are answered.
Here's question 9:
Related Update: CKWS has these comments from Mayor Rosen on camera:
THE MAYOR SAYS THE CITY IS STILL WAITING FOR WORD ON THE GRANT, BUT IN THE MEAN-TIME PUBLIC INPUT IS THE MOST VALUABLE ADDITION TO THE PROCESS.
"it's very important that the community has the input, and that they're seen to have input... that they understand that they're being listened to, in terms of what theyre (sic) preferences... in terms of the designs"
Here's question 32:
CKWS-TV was the first to broadcast and publish news of the LVEC models that are given a whopping 3-hour preview on a single night at City Hall tonight.
Next was The Whig with this story though the photos are not online.
The LVEC is currently being heavily promoted by the very group that stands to reap the totality of its benefits. Now we're hearing (and recording) many promises of not just spectator benefits, but commonwealth benefits, some of them astonishing, that are being written and broadcast.
What's important to know is those who stand to benefit the most from the proposed LVEC are in for chickenfeed, and the taxpayer is all-in.
Ottawa's Randy Sexton reportedly wrote in an email to Kingston City Council members:
"Should we be selected as the LVEC operator, we would immediately engage with the community leaders in Kingston to map out a plan to include Kingston in various world junior events and games," the e-mail states. "We look forward to further discussing this with you."
Read the whole thing.
What we'd like to know is, what's the real difference between a junior team from say Latvia, and an OHL team like the Sudbury Wolves? A few additional hotel rooms maybe? So assume we see something like Latvia versus Norway in a meaningless pre-tournament exhibition friendly between mostly jet-lagged teens. How is that economically different from Sault Ste Marie vs Kingston on a Friday night followed by Sudbury vs Kingston on Saturday? Both scenarios involve no more than 40 hotel-room-nights in total, and the World Junior gig would be one box office, whereas the perfectly ordinary OHL weekend games is two, and the OHL games actually mean something. Just how economically significant is a World Junior exhibition game to Kingston, really? It's barely even notable.
It's annoying to be taken for a bunch of country hicks by the likes of Randy Sexton. Regardless, Mr Sexton's blatant attempt to curry favour for his bid to operate Kingston's proposed LVEC has certainly been noticed.
But it doesn't stop there. In a related story, Kingston This Week wrote this about statements reportedly attributed to the Kingston Frontenacs marketing director Jeff Stilwell.
Although the 31 tournament games will be played in Ottawa, Kingston could draw exhibition games and "fingers crossed" maybe one would involve Canada, Stilwell said.It's inconceivable that Hockey Canada, which runs our national world junior program, would consent to interrupt the preparation of the national team in the Nation's Capital to play or publicly practice in Kingston given the number of larger-sized facilities in the National Capital region. None of those making "fingers crossed" comments to supposedly gullible Kingstonians have any say whatsoever in the preparation of the national junior squad, which will be meticulously planned and completely free from outside influence of the likes of Randy Sexton and the Kingston Frontenacs marketing department.
Here's the link to today's Whig story about Kingston business owners spending up to $50,000 on a "slick pro-entertainment centre ad campaign".
We'll surely soon comment on the veracity of the claims made in the current pro-LVEC advertising campaign. For now it's interesting to note that the watchkingstongrow.comwebsite is registered to the group that stands to gain the most from massive public subsidy that this half-baked LVEC proposal represents: Kingston Accommodation Partners, a loose affiliation of local hotels with all the usual ties to the BIA, the Chamber of Commerce, and KEDCO.
We last talked about Kingston Accommodation partners back in December 2005. Read the whole thing. The manufacturing of the illusion of public support for the LVEC contines.
Finally the May meetings calendar has been posted on the City of Kingston website.
There are two LVEC-related special council meetings planned:
The LVEC steering Committee has no public meetings planned.