Hamilton’s duelling arena proposals: Council wants developers to sharpen their pencils
City staff favoured Vrancor but council opts to keep venue process competitive
https://www.thespec.com/opinion-stor...their-pencils/
Up to 120 days.
That's how much time two local business groups competing to redevelop Hamilton's city-owned downtown sports and entertainment venues have been given to sharpen their pencils.
According to sources, councillors have directed city staff to negotiate the best deal possible with the groups and then recommend a preferred proponent to undertake a multimillion revamping of the aging arena, convention centre and concert hall — all without tapping local tax dollars.
After emerging from a closed-door meeting Wednesday night, councillors voted to keep a staff report on the duelling redevelopment proposals confidential.
But The Spectator has learned that staff formally recommended that the city sign a memorandum of understanding with Vrancor Inc., owned by developer Darko Vranich.
However, instead of following staff advice, councillors opted to keep the competitive process alive by continuing to engage with Vrancor and rival proponent Hamilton Urban Precinct Arts and Entertainment Group — but for no more than 120 days.
A third proposal by a consortium led by Ancaster-based Pearle Hospitality was reportedly considered insufficiently advanced to proceed.
Be that as it may, staff's hip checked recommendation to negotiate a memorandum of understanding with Vrancor is hardly surprising, at least based on presentations of the competing plans that took place earlier that day.
Vrancor and Urban Precinct Group — consisting of Carmen's Group, LIUNA Pension Fund, Fengate Capital, Paletta International, Jetport Inc., and Meridian Credit Union — have both submitted confidential term sheets to the city containing financial information and conditions which haven't been made divulged.
But while publicly showcasing Vrancor's $200-million plans, project adviser Mario Frankovich was sharply focused. He highlighted the company's readiness, asserted its ability to deliver a revitalized arena in 12 to 14 months and, perhaps most significantly, promised an end to taxpayer subsidies with no impact on the tax levy.
By contrast, PJ Mercanti and Jasper Kujavsky, speaking on behalf of Urban Precinct Group's $500-million plan, spent too much time talking about the load-bearing capacity of the arena roof and theoretical high rises.
In an interview, Kujavsky defended his consortium as a "solid group of investors" who have the necessary "capital ready to deploy." But that message wasn't clear enough in front of the cameras. It also didn't help that Urban Precinct is looking to the federal and provincial governments for funding help.
In broad strokes, Vrancor and Urban Precinct are both proposing to transform the arena into a modern venue that can be curtained off to host 8,000-seat events and expanded to its full 17,000-seat capacity when needed. Vrancor, however, is also talking about attaching two six-storey Grade A office towers to the facility.
Both groups are proposing relatively modest upgrades to the 2,200-seat concert hall. But they have radically different visions for the convention centre. Vrancor proposes to double its capacity at its current location by going out over Summers Lane, as well as building a supporting hotel nearby.
Urban Precinct wants to build a new convention centre at the site of a redeveloped City Centre (formerly Eaton's Centre) and use the existing location for a mixed-use tower, which could possibly include the Art Gallery of Hamilton.
For its part, Urban Precinct says it's prepared to explore various investment models to get the city out of the entertainment and hospitality business and eliminate or reduce its operating and capital costs at the facilities.
Vrancor, on the other hand, is more explicit. It proposes to fund the arena and concert hall renovations and operate them while leaving the ownership in city hands. It does, however, want to buy the convention centre, as well as pay for its revitalization. Obviously, that's where Vranich sees the return on his investment.
Meanwhile, word that Michael Andlauer is talking to Burlington about a new arena and moving the Hamilton Bulldogs there has added greater urgency to the discussions. As the anchor tenant at FirstOntario Centre, the Bulldogs are key to any revitalizations plans.
But Andlauer is tired of waiting for an arena fix and disgusted with the way his proposal for a new arena at Lime Ridge Mall was dismissed by council. He says he recently spoke to Vrancor, Urban Precinct and Pearle Hospitality. But in the end, he sees all their plans as "conceptual and speculative."
Andlauer says he'll continue to look at Burlington while remaining open to staying in Hamilton. But he wants to see "concrete timelines" and needs to consider the best interests of Bulldogs' fans.
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