Convention centre not done deal
By ROGER TAYLOR Business Columnist
Fri, Oct 14 - 7:57 AM
Everyone thinks the new Halifax convention centre is a fait accompli, don’t they?
Well, maybe not everybody, but since Nova Scotia’s representative in the federal cabinet, Defence Minister Peter MacKay, announced in August that Ottawa would be contributing to the new downtown convention facility, most of us have been waiting for construction to start on the two desolate city blocks earmarked for the project.
Apparently it isn’t that simple.
The federal government may be willing to contribute $51.4 million, slightly more than the $47 million initially requested, but that may not be enough to make up for the delay.
The idea of building a new convention centre started back in the spring of 2008. The province and city called on developers to submit proposals. A year later, both levels of government signed a memorandum of understanding to work together on the convention centre, which would be "open for business no later than Jan. 1, 2013."
By the fall of 2009, developer Rank Inc. had been chosen to submit a more detailed bid, which it did by the summer of 2010.
Rank’s idea was to make the convention centre one part of a $500-million project also to include a hotel, financial centre and retail complex on the former Halifax Herald lands.
Later in 2010, the province and city indicated their support for Rank’s proposal, and the province set about negotiating the details.
After that process, it was revealed that Rank had committed to covering any cost overruns during construction, and once the lease term was up, ownership of the convention centre would be handed over to the province.
The province and city officially endorsed the deal last December, to the tune of $56 million each, to be paid in the form of a capital lease over 25 years. The province then finally submitted a funding request to the federal government, which was to provide a lump-sum payment once construction was substantially completed.
Rank promised to build the convention centre at cost, and it guaranteed the price tag of $159 million until this past January to allow Ottawa time to evaluate the project. After it was obvious that the deadline would pass without a decision, Rank agreed to extend it until April. But that deadline also passed without a commitment from the federal government.
Then there was a federal election on May 2 and a change in ministers before MacKay finally made his funding announcement in August.
But by that time, Rank had already moved on to Plan B. The developer had been quietly promoting a phased-in office complex, with some elements of the larger proposal but without the convention centre.
While part of the problem may have been updating and nailing down price quotes from various contractors, a bigger issue has been negotiating with potential tenants for the financial centre. I’ve heard that some tenants were lost after the two deadlines were missed for funding the convention centre.
In many respects, developing the empty lots in phases would be less stressful for everyone, but having a convention centre in the heart of downtown would be more beneficial for the city in the long run than simply having another office building or two.
Will the convention centre be built?
It is still in Rank’s hands, and the developer indicated in August that it could take at least 60 days to commit to proceeding with the project.
Even if Rank decides to go ahead with the convention centre, the construction schedule has been set back considerably. It would now open sometime in 2015 — a far cry from the January 2013 opening the politicians had hoped for.
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