Bets placed on N.B. casino
Provincial gov't delays release of potential developers to further study proposals
By Jesse Robichaud
Times & Transcript Staff
Published Thursday March 13th, 2008
Appeared on page A1
FREDERICTON - All bets are still off on the potential location and developer of the casino that will open in New Brunswick in 2010.
The province's casino sweepstakes began officially on Tuesday at 2 pm when the deadline set by the province to receive casino project proposals from developers expired.
Shrouded in secrecy, the proposals were received in sealed boxes and were transported to an undisclosed site yesterday where they were opened.
The Liberal government was scheduled to disclose the names of the developers who are bidding on the casino project yesterday, but plans changed once the boxes were opened and the enormity of the sensitive task became apparent.
Indeed, as officials sifted through the loads of information required by the province's stringent request for proposals (RFP) process, including a $50,000 deposit from each proponent, the logistics of the overall process have forced Department of Finance officials to postpone the announcement until today or tomorrow.
Moncton and Saint John are looked upon as the frontrunners in the high stakes contest between business interests in both cities as they jockey for an advantage over their still anonymous competition.
Despite the tight-lipped approach of the provincial government toward the selection process, which is being kept at arm's length from the cabinet table, spokesman Marc Belliveau concedes there is fierce competition within the province.
"We aren't oblivious to what's going and we know there are some regions battling over other areas," he said.
"The government is very pleased with the interest shown in the RFP. The people who have made proposals are local, national, and international."
While Metro Monctonians will have to wait until May before they learn whether a casino will be built in their backyard, local residents seem to be split on where a casino should be built within Metro.
While some, including Downtown Moncton Inc, believe a casino could be the jolt the city's core needs to spur development, others believe a project on the city's outskirts would be a greater asset to help the city attract visitors and more downtown investment.
On the flip side of the coin, the potential social effects of a downtown casino has been pointed to as a potential disturbance to the downtown's current vitality by some critics.
A City of Moncton commissioned feasibility study conducted in 2002 by the KPMG accounting firm projected that a downtown casino would likely cost $33 million and generate $55 million per year in revenues, creating 400 jobs.
While Moncton has dominated the discussion over the best fit for a casino, there have been some whispers over the advantages of projects in Dieppe, and even as far away as Shediac.
After all, Finance Minister Boudreau has said the province's decision to legalize the construction of a casino in the province was based on a desire to boost the province's tourism numbers.
However, the 2002 KPMG study estimated that the lion's share of the casino's clientele would come from locals rather than tourists, with $17 million of the annual $55 million pay dirt coming from residents living within 30 minutes of the casino. In fact, 950,000 of the casino's visitors would come from residents living within 2.5 hours of the casino, and would contribute $52 million of the casino's annual $55 million revenues.
According to the same projections, only 43,000 visitors spending $3.2 million would be actual tourists.
Since the RFP was released, two groups have emerged publicly as contenders for a casino project in Moncton.
Toronto-based Verdiroc has expressed interest in building a casino on the former Beaver Lumber property in downtown Moncton. The company holds an option on the eight acre property.
The firm has also stated its intention to develop a downtown convention centre, restaurant, and a performance venue for downtown.
Another group, known as Chateau Royale, is looking at several locations in Metro Moncton, but none are located downtown.
The group is backed by New England interests, and has been working with city council on its proposal for more than 18 months.
Talk of a proposal to build a racino in Saint John in order to stimulate the harness racing industry in that city seems to have fizzled according to sources close to the industry.
Leading up to the casino's 2010 opening, the province's gambling policy will cut the total number of video lottery terminals from 2,660 to 2,000, and limit the number of locations where VLTs can be accessed from 625 to 300 as a means of addressing problem gambling.
VLTs will be removed from restaurants by 2009, but government officials say the $135 million in revenues that are currently pumped into government coffers won't decrease due to the cuts.
However, with up to a maximum of 800 slot machines being added to the province's gambling mix wherever the casino is built, the number of VLTs and slots in the province could exceed the current number of VLTs.
And despite the Liberal government's promise to double the $750,000 currently spent on gambling addiction treatment services, there is still some opposition to the construction of a casino due to the social problems similar projects have caused elsewhere.
The city that gets the nod in the casino sweepstakes will also see the number of VLTs diminished, as the government's policy states that a "maximum of 20 per cent of the VLTs in the video lottery program will be permitted within the casino market area."
It is anticipated that the range will be set at between 80 and 100 kilometres of the community in which the casino complex is located, which would represent a large proportion of southeastern New Brunswick if a Metro casino project is chosen.
The previous Conservative government of Bernard Lord flirted with the idea of a casino, but was defeated in the 2006 election before it released its own long-awaited gambling policy which would have stated a clear position.
When the new casino opens in 2010, New Brunswick will become the ninth Canadian province to authorize a casino.
While the government is banking on competition within the market to decide what casino mix will be most profitable -- based on a ratio of a possible 60 points allocated for the casino's business case, and 40 points allocated for the potential economic impact on the region -- there are some parameters.
For example, developers can pick a number between 400 and 800 slot machines. By comparison, Casino Nova Scotia in Halifax contains 750 machines, while its sister casino in Sydney features 338.
Boudreau has been clear in stating that additional services and attractions around the casino, such as a race track, theatre, hotels, or arena, will play a big role in the province's final decision, which will be made by international accounting firm KPMG.
The choice will then be confirmed by the Liberal cabinet, which won't be made aware of the location where the winning choice is made.
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Moncton permits down
Severe weather conditions slow down building activity
By Brent Mazerolle
Times & Transcript Staff
Published Thursday March 13th, 2008
Appeared on page A12
And you thought Metro Moncton's endless winter only had you depressed. Now it seems to have had the same effect on construction in Moncton, at least when you look at a snapshot of building permits for snowy February.
A total of 33 permits valued at $2.9 million were issued in February, a 30 per cent decline in total value when compared to the 36 building permits issued over the same period last year (valued at $4.1 million). Last February, though cold, saw very little snow on the ground.
Ben Champoux, a business development specialist with the City of Moncton, said yesterday, "the drop in construction activity so far this year is not a reflection of weak demand, but mainly due to severe winter conditions."
Champoux pointed to a number of economic factors to suggest the February decline is likely just a hiccup.
"We have 70,300 people currently employed in Greater Moncton compared to 65,100 twelve months ago," he said. "Interest rates are dropping and consumer confidence remains strong, so expect construction activity to bounce back over the next few months."
Indeed, last year's February permit numbers had been the best since 2003, and even though the 2008 figures are lower, they are still significantly better than the $1.7 million worth of permits issued in the mild February of 2006.
All sectors of the construction industry were down in February when compared to last year. Commercial and industrial sector building permits were valued at $1.5 million while residential construction accounted for $946,000 in permits. The majority of building permits issued so far this year is for renovation projects, as opposed to new construction.
Among the biggest were one that could in fact arguably be considered new construction, a $420,000 interior renovation project for the second floor of the new Lawton's Drug Store on Mapleton Road;
A renovation for the new ambulance dispatch centre on John Street was also valued at $420,000. Improvement work on the fifth floor of the Crombie Property at 1234 Main Street and work to create RBC offices on the sixth floor of 633 Main Street were valued at $250,000 each.
So far this year, a total of 61 permits valued at $4.2 million have been issued, compared to 79 permits worth $6.7 million at this time last year.
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