[Halifax] Nova Centre | 65-58-58 m | 16-15-14 fl | Completed

[beyeas]

There are very few actual "facts" here, and given that there is clear dissension here over things that different sides even on this forum are saying as facts that they know, I want to summarize what I see as the only facts:

- Both sides (HT vs CC proponents) are guilty of having inflated (or at the very least manipulated) the numbers. This is a consequence of this sort of argument where one stupid statement begets another. Also, the numbers as they stand are not necessarily final, but are probably pretty close to it.

- The design is not perfect, and ideally should be altered (I thought Halifaxboyns had some excellent thoughts on this)

- The public should have been involved in this discussion in a much more real fashion right from the start

- This is not purely an NDP issue (although I will admit that there are some in the NDP that are real issues, e.g. Epstein). This design and location was pushed by the PCs, and funding of this is supported by all 3 parties.

- The last fact as I see them is that it is probably too late for major changes, given the time scale of the process. If they plan to break ground in the spring then that is very little time to get full architectural drawings done, go to tender etc. We probably are looking at, unfortunately, only minor cosmetic changes at this point.

PS: This will sound catty, but I have decided to ignore posts in which every 3rd word is misspelled and that lack any sense of proper grammar. I am as guilty as any with making the occasional mistake, but come on. I find it frustrating to follow an argument when it looks like it was written as a drunken text from pizza corner to your ex girlfriend. Srly. Oh how I despair for the NS education system.

[fenwick16]

I am a convention centre supporter and I want the Nova Centre to go ahead even if there are no modifications to the design. I believe that it will go ahead; this is why that I think people should start thinking about the two options for financing (I haven't imagined these options - it has been reported by several different news agencies and it appears as though the province will be outlining them to the HRM in the near future). It just hasn't been emphasized - so there has been little discussion about how much extra money will be paid in order to delay the payments until 2014.

There has actually been a lot of information on the financing, including interest rates and interim financing charges. Even Premier Dexter who is probably more familiar than anyone regarding the financing has questioned whether it is a good idea to go with the option of no payments until 2014 (as reported in allnovascotia.com). I believe that DigitalNinja has stated that he is in the financial sector - it would be very beneficial for someone with a strong financial background to go through the numbers and dissect them so that questions can be posed to the HRM council and province. The numbers that I tabulated came directly from a variety of news reports. However, I am not strong enough in finance to also include an analysis of the future cost of earlier payments including the effect that inflation will have on the future lease payments. However, I know based on owning homes for close to 20 years that it is best to pay a house mortgage off over 15 years instead of over 25 years. There is a good reason why the federal government won't fund interim interest payments - they realize that such arrangements are poor deals for tax-payers especially when the federal and provincial governments can get much lower interest rates than can private companies such as Rank Inc. This isn't a criticism of Rank Inc., it is a question of whether the NDP is accepting a deal to artificially make the financial books look better.

I actually agree with Buckey on one point - the job creation numbers seem much too high and this is just causing distrust amongst many residents. However, even with much lower job creation numbers, I believe that the convention centre can be justified.

[Buckey]

MY main concern is being proactive on the financials NOW. I dont want the AG to issue a report in 15 years saying we shoodaa done all sorts of things differently.

In terms of design, location, view lines - minor issues others can squabble about. I would vote for all of that in a heartbeat. Ill even cave in on ground floor for convention space.

And Fen yes there is a lot of info available. The studies alone are enough to make your eyes water. Im a finance guy. I want the projections to be measurable just like a budget and be measured against plans and projections with variance duly noted and reported. Certainly some stuff is simply not measurable. exact spinofff dollars will always be some sort of calculation based on certain assumptions. eceb that I am ok with.

But lets drill down into these top line numbers and say hey if Ramia or GOV or whemevr says we will create 1000 jobs then is that 700 at hotel and 300 at convention center then lets measure that. are these jobs or FTEs . a job paying min wage 10 hours a week is a 1/4 FTE to me not a JOB.

I am so passionate about this right now I want to get involved by I am anti establishment by my very private nature. Because I cannot see how they came up with these numbers and the likely very complicated models that are obviously underlying these top line numbers I feel a bit lost.

IM the guy who when he runs a report in SAP loves the drill down and can get lost digging. I love a report in front of my eyes that I can click on a number or a line and POOF it expands and down a level I go and poof sideways I go and POOF click im down another level and now Im lost and POOF the lights are out in the office and every is gone home and I now have a second screen fired up and running as I am working a seperate model and calculation but im getting to what I was looking for.

By that same token I also was paid to dig and find mistakes and errors in numbers when somone said something didnt look right and sadly sometimes we had to go away and "massage" the numbers to make them look and feel better.

I am not afraid of saying I was all worng about it all. I will be the first to admit I was too paranoid about this project if I see some more guts to this. BUt right now I dont like the rosy projections and I dont like the terms of the deals. thats it.

I really hope we build it and the numbers were right and it doesnt cost us this much and the model changes that we own something

[Buckey]

I coined that little term last night in a discussion about this project with a slew of business colleagues who amazingly are all in agreement.

We are all kiocking in to build a hotel for Ramia. I copyrighted it

[Buckey]

I didnt give it a lot of scrutiny but I do agree with you savings BY not paying all the extra financing costs. I think what you are saying is that our cost of capital - our cost of borrowing is much more favorable that the proposal which includes us carry and paying the financing costs at the end of three years at a higher rate that we would normally pay.

Is that correct?

also noone has chirped in with the real existing JOBS or FTEs at TCL Or a definition of DIRECT jobs

all I know is Annual report says $4 Million in wages. Thats 135 FTE's at average salary of 24,500 assuming an incrental benfit cost of 20 %. and that is for entire 5 divisions of TCL.

I swore up and down I was going to let this go and not get all wrapped up. Well its raining out and now I want to dig a lot deeper into the studies and see if I can find some fine print to help me understand the proposal better.

[sdm]

Originally Posted by fenwick16

There is a good reason why the federal government won't fund interim interest payments - they realize that such arrangements are poor deals for tax-payers especially when the federal and provincial governments can get much lower interest rates than can private companies such as Rank Inc. This isn't a criticism of Rank Inc., it is a question of whether the NDP is accepting a deal to artificially make the financial books look better.

For your information a 10 year mortgage (25 year amortization)rate for a commerical building is running between 4.6-4.8 % as of friday.

[fenwick16]

Thanks Buckey, this is the type of analysis that I would hope for. I don't know if you saw the table that I posted on the previous page. I studied chemical engineering so I am not a financial expert. I have only taken enough courses in economics to know how complex that it can become if a proper analysis is done (I know that it is over my head). I know a few facts - such as in 15 years with 3% inflation compounded annually then the $13.1 million per year in capital lease payments will be worth far less of its value than it would in current dollars (about 2/3 -> $13.1M/$13.1Mx1.56; where 1.03 to the power of 15 years = 1.56). I know also that if the province pays the construction as-it-proceeds they will be paying in dollars that would be worth more in the future. So the total numbers that I worked out for the year 2039 do not have these factors included to give a good understanding of the real difference in 2039 dollars.

On the other hand, if the province accepts the no-payments until 2014 then the province and the HRM will be paying a higher interest rate (around 6.9%) and all of the interim financing charge ($19 million to cover the construction period). The federal government won't cover any of the $19 million interim financing charge.

Can you tell me how much more in 2039 dollars (or in current dollars) the province will be paying if they select the no-payments-until-2014? I know that assumptions on interest rates and inflation would have to be made. Do you think this is a good way to finance such a deal? (the province can still select the other option). Or maybe a third option should be considered such as paying the first 50% as construction proceeds in order to reduce the future lease payments.

When I finance my car leases and home mortgage, I can take these things into account more easily than with a deal such as with the convention centre. It would take an expert in economics to decide which is the best deal for a period of 25 years plus 3 years of construction.

[fenwick16]

Originally Posted by Buckey

I didnt give it a lot of scrutiny but I do agree with you savings BY not paying all the extra financing costs. I think what you are saying is that our cost of capital - our cost of borrowing is much more favorable that the proposal which includes us carry and paying the financing costs at the end of three years at a higher rate that we would normally pay.

Is that correct?

also noone has chirped in with the real existing JOBS or FTEs at TCL Or a definition of DIRECT jobs

Yes this is correct. I was hoping that someone could give concrete numbers on the financing.

Regarding the direct jobs, I can only give my estimate. Even with profit going to the developer (which is fair in my mind) I think that it is reasonable to assume that every $150,000 in construction cost will create one full year of employment. So if the real cost of the entire complex is only $300 million in today's dollars (instead of the $500 million dollars being thrown around) then that would be $300 million/$150,000 per 1 year-job = 2000 direct construction jobs for one year (over 3 - 4 years).

As you stated previously, and I thought that it was a good point, only the new jobs that the convention centre creates should be considered. I don't know what this would be. Maybe it will only create an extra 100 jobs per year if all direct convention centre/hotel/office and indirect restaurant jobs are considered - so that would be 2500 over 25 years. So my rough estimate would be 4000 - 5000 direct 1 man-year jobs over 25 years including construction jobs. I might be underestimating the jobs. However, if all of those people paid $10,000 per year in federal and provincial income tax then that alone would be $50,000,000 over 25 years in today's dollars. Then there would be annual direct income for the convention centre - even at only $5,000,000/year then that would be $125,000,000 in today's dollars. There would also be HST. So if the number of convention goers was only 50,000 per year at $1000 per convention goer then that would be $7,500,000 per year in HST (15%) times 25 years = $187,500,000. I think that there is a good chance of the convention centre at least breaking even in financial terms but in human terms it will mean jobs for people who don't currently have jobs. If you then subtract social welfare and UIC for the people who will have jobs - it starts to look very attractive.

[Buckey]

Originally Posted by fenwick16

Yes this is correct. I was hoping that someone could give concrete numbers on the financing.

Regarding the direct jobs, I can only give my estimate. Even with profit going to the developer (which is fair in my mind) I think that it is reasonable to assume that every $150,000 in construction cost will create one full year of employment. So if the real cost of the entire complex is only $300 million in today's dollars (instead of the $500 million dollars being thrown around) then that would be $300 million/$150,000 per 1 year-job = 2000 direct construction jobs for one year (over 3 - 4 years).

As you stated previously, and I thought that it was a good point, only the new jobs that the convention centre creates should be considered. I don't know what this would be. Maybe it will only create an extra 100 jobs per year if all direct convention centre/hotel/office and indirect restaurant jobs are considered - so that would be 2500 over 25 years. So my rough estimate would be 4000 - 5000 direct 1 man-year jobs over 25 years including construction jobs. I might be underestimating the jobs. However, if all of those people paid $10,000 per year in federal and provincial income tax then that alone would be $50,000,000 over 25 years in today's dollars. Then there would be annual direct income for the convention centre - even at only $5,000,000/year then that would be $125,000,000 in today's dollars. There would also be HST. So if the number of convention goers was only 50,000 per year at $1000 per convention goer then that would be $7,500,000 per year in HST (15%) times 25 years = $187,500,000. I think that there is a good chance of the convention centre at least breaking even in financial terms but in human terms it will mean jobs for people who don't currently have jobs. If you then subtract social welfare and UIC for the people who will have jobs - it starts to look very attractive.

I am dissecting some more numbers but yes we ssem to be agree ing on a lot but your analysis seems accurate on financings. 2008/2009 fiscal ytear end march 31, 2009 they reported 7 Million in revs at CC only and actually 96,000 visitors BUt I dont know if a person visits a convention for three days is that one or three. Matter of fact I think your attendence assumptions are on the low side.
http://www.tradecentrelimited.com/site-t...limited/TCL%20Annual%20Report%200809.pdf

Now on another note again I took others comments at face value and rehashed them. The new CC proposal is actually more that two ground floors. The detailed floor plans on page 9 here it looks like 3 or 4 floors on the prince street side for sure of the building. If you zoom in you can actually see room numbers and they are over three or four floors.
https://conventioncentreinfo.com/wp-content/uploads/2010/10/WTCC-II-Bid-Summary.pdf

[Buckey]

Fen I initially did indeed note that we were paying that $19 Million in financing costs but I didnt do the math in my head. good for you. Anyway I chuckled that after you brough it up lets remember that Ramia owns Gallery One - He used the old "Dont pay a cent until 2014" trick on us. I mean everyone knows that when Leons and those guys pull that stunt the financing costs are already layered in to the price of couch.

You are likely the guy the went to leons and bought that $1500 couch for $900 cash when you told the guy you didnt want the financing deal LOL.

It is a clever sales pitch that we do not have to pay anything until 2014 and even at that point its the feds making the $47 million payment. All we do is pay the $13 a year and I have revised my number down to $13 MM because when I was adjusting it up it was for operating losses which are largely depreciation. we will not have that in new facility.

[Buckey]

as I dig deeper and spend a lot of time I have warmed up a BIT to the project. I still am not fully comfortable we are getting a fair shake on our portion of the costs of building this facility. just looking at it. It doesnt look like our cut at 1/3 of the total cost is even close to 1/10th of the facility.

Here is a thought - Crazy as it might be.

lets rejig this a bit. One tower is all hotel and owned by Ramia. One tower is all convetion center with all sorts of parking below on both twoers for full time use by public - like lots and lots of parking.

maybe we do a 50/50 deal and we own one building at end. Call me crazy

[fenwick16]

Originally Posted by Buckey

I am dissecting some more numbers but yes we ssem to be agree ing on a lot but your analysis seems accurate on financings. 2008/2009 fiscal ytear end march 31, 2009 they reported 7 Million in revs at CC only and actually 96,000 visitors BUt I dont know if a person visits a convention for three days is that one or three. Matter of fact I think your attendence assumptions are on the low side.
http://www.tradecentrelimited.com/site-t...limited/TCL%20Annual%20Report%200809.pdf

Now on another note again I took others comments at face value and rehashed them. The new CC proposal is actually more that two ground floors. The detailed floor plans on page 9 here it looks like 3 or 4 floors on the prince street side for sure of the building. If you zoom in you can actually see room numbers and they are over three or four floors.
https://conventioncentreinfo.com/wp-content/uploads/2010/10/WTCC-II-Bid-Summary.pdf

Thank you for the link on the new convention centre Bid Summary. I hadn't seen it before. Personally, I like the design as it is. I have been to many convention centres and this will be one of the better ones. (Most are actually quite plain - even in the large cities).

I have to agree with you on the job numbers - 28,000 over 25 years seems much too high.

[Buckey]

OK I actually am not a complete idiot as one might think. I can get shined up a bit better than my normal look around the house


I dont mean like married engaged. I mean involved in this project before we sign off and yes I sure should of been speaking out before. Its never too late.

I am now down to the JOBs hype and our proportional cost. The jobs numbers are beyond baked. I will edit thatin a bit as it is a bit of bad taste

[fenwick16]

The numbers for how much delegates would spend in a city actually seem very reasonable $1000 - 1500. Staying in a city for 3 nights is about the norm (there are trade exhibits, lectures, and even city tours). In Halifax, just the hotel room alone would likely be close to $500 dollars, then there are meals, gifts, entertainment, etc. It would also mean more people flying into the airport and taking taxis downtown.

I have been lucky enough to have gone to conventions in several cities in North America that I wouldn't have gone to otherwise. San Francisco (my favorite), Baltimore (nice - similar to Halifax in some ways), San Antonio (not many heritage buildings are left but it is interesting), Dallas (too much like Toronto - just big and modern), Chicago (I have been there many times - it has a very impressive downtown area), Atlanta (interesting - it looks like a sprawling city built within a huge forest) and a few others that I can't think of right now.

Halifax might not get the conventions that the very large cities will get, but I hope that it will attract people from other parts of Canada and the World who will go to Halifax, visit the Citadel, Public Gardens, Waterfront, Maritime Museum, Irish pubs, etc and be blown away by what the city has to offer and will want to return with their families (some might even decide to invest in the Halifax area).

[Buckey]

I can live with that number also for a 3 night stay. I think it is a bit on the high side but sure hotel is $500 for three nights and $120 for a taxi - some meals included in convention costs but one way or another they are paying for 6 or 8 meals at 30 a pop $300 regardless - BOOOZEEE add $100. cost of convention - some are free but if so then exhibitors paying. $1,600 - No issue with that number as long as we really know how many from away and how many local but I do think they break that out and capture that before they calculate their spin off effects

[Buckey]

a lot of conflicting information and I am begging for help here. I have sorted out a lot of other info but this one has a HUGE disconnect even between the bid presentation and the TCL news release of the same day. I am going ti deduce that they are saying 2000 jobs and 1,200 incrememental but that implies 800 existing.

JOBS
Oct 6 presentation
https://conventioncentreinfo.com/wp-content/uploads/2010/10/WTCC-II-Bid-Summary.pdf

Construction
Direct: 919
Spin off: 825

WTCC ten years combined
Direct: 20,817
Spin off: 6,690

Lets divide that by ten to make it easy and say year one has few less
Direct: 2,000
Spin off: 650


Also lets assume these are total jobs. If the existing entire TCL excluding the metro center only has 120-150 jobs this number seems completely out of whack and absolutely must include the hotel staff and must include all part timers and are actually not FTEs

So then I go to OCT 6th NR right on TCL website
http://www.tradecentrelimited.com/en/home/news/newsandpress/ConventionCentreBidSummary.aspx
and I quote this:

A new convention centre is expected to create about 12,000 jobs and generate more than $40 million in provincial tax revenues during the first 10 years of operation.

So that means 1,200 new jobs per year. How do we get to that number? Anyone? Please explain to me the jobs number

[fenwick16]

Originally Posted by Buckey

A new convention centre is expected to create about 12,000 jobs and generate more than $40 million in provincial tax revenues during the first 10 years of operation.

So that means 1,200 new jobs per year. How do we get to that number? Anyone? Please explain to me the jobs number

I also find this number hard to believe. I would be happy if the number were 500 (or even less). I am sure that this includes all jobs generated such as additional hotel jobs, additional restaurant jobs, extra taxis, additional retail, and so on. The direct jobs at the convention centre alone might only be 100 extra per year at best (based on the numbers that you provided for the current work force).

It sounds like they are being overly optimistic. However, I don't think that it has to be this high to justify the expense. It just causes doubt amongst residents. So in my opinion, the WTCC providing such an optimistic number causes more harm than good.

[Buckey]

OK this one breaks out a lot of numbers and is easy to read and only 27 pages long. easy read but I like the numbers being broken out
https://conventioncentreinfo.com/wp-cont...For-a-Proposed-New-Convention-Centre.pdf

It is the third one down on this page
https://conventioncentreinfo.com/documents/studies/

called TCL Market Projections for an Expanded Convention Facility.

Im ok with all of those projections on spinoffs and attendance. I am surpised that in 13 years or ten years after we open that we do not even double attendance. They say we have 163,000 dlegates and attendees (96,000 in TCL annual report) but they are measuring differently. and in year ten only 260,000 but the expiditure per peron go way up.

The new jobs number is without doubt some sort of roill up of all new jobs direct and indirect. IT cannot be the center itself . It is impossible - I say the new center when rocking and rolling creates 100-150 new FTEs at best. what it does for the hotel I have no idea.

[Buckey]

OK that report I couldnt read the first time as I was on my iphone LOL eyes are bad. so here is where I am at. clarify the jobs as it is now obvious its about 1,000 new jobs and its all jobs created as a result of all direct and spinoff and the hotel etc. and it is likely about double.

If Im paying the mortgage I want a piece of the equity created in this place.

[Buckey]

what a whack job I am - other than the end result of no equity I am almost on board IF we meet the projections but wee need to clear up the hype surrounding jobs.

I recently read a news release by some scammy penny stock that claimed they had gold bullion. when you added up the bullion it was about 40% of the entire gold reserves of all the central banks in the world. Of course the last company that same guy ran claimed that had a 5 Billion dollar treasury Bond and were going to colonize the moon.

My point - don't hype it just the facts please and make it simple.