Hamilton releases details on multimillion-dollar ‘entertainment precinct’ deal with downtown developers
Deal with a private group to overhaul arena and build ‘entertainment precinct’ has faced criticism over lack of transparency
By Matthew Van Dongen
Spectator Reporter
https://www.thespec.com/news/hamilto...-precinct.html
In the face of criticism over secrecy, Hamilton has released most of its agreement with a private group planning to renovate the city’s aging entertainment facilities and radically remake large swaths of the downtown.
The 84-page document, which is blacked out in some areas, provides details about a 49-year lease agreement signed in 2021 with the Hamilton Urban Precinct Entertainment Group (HUPEG) that promises a renovation of the city’s aging downtown hockey arena, concert hall and convention centre.
The city initially said it could not reveal contract details for commercial competitiveness reasons — but a newly elected council voted this week to release a redacted version of the original agreement.
“The new council and mayor have made it really clear that they have a mandate of transparency,” said tourism manager Ryan McHugh in an interview when asked why the document was released now.
The original deal was lauded by city politicians at the time because it promised no taxpayer dollars would be spent on either the rebuild or future operations of the buildings, which currently require a $5-million-plus annual subsidy.
In return, the consortium will operate the venues — and earn ownership of three downtown city properties with plans to create an “entertainment precinct” and build condos.
The deal has faced mounting criticism, however, as popular arena tenants like the Hamilton Bulldogs hockey team and Honey Badgers basketball club found homes elsewhere after apparent miscommunication over construction timelines.
At one point, it was also thought Hamilton’s Commonwealth Games bid might result in federal or provincial dollars being invested into the arena — but the city’s chances at hosting the event appear to have fizzled.
HUPEG president PJ Mercanti addressed some of that criticism in an op-ed in The Spectator last week, acknowledging residents want “greater clarity” on the details of the agreement.
“Given the taxpayer assets at play and the pride our community has in its teams and sports facilities, we get it,” he wrote, while adding he faced “limitation on what we can say publicly” due to confidentiality agreements with partners.
Some highlights of the information released Wednesday:
* The document says HUPEG will pay a $1 a year to lease each of the entertainment facilities it takes over. In return, it guarantees to invest a minimum $50-million into the arena renovation, $10 million into the convention centre, $2.5 million into the concert hall and a $2 million donation to a planned art gallery fundraising campaign.
* The consortium will use ticket surcharges to gradually build up a capital repair fund.
* The 2021-dated document does not reflect the important, recent change in the HUPEG partnership that added international heavyweight developer Oak View Group, which will take over renovations of FirstOntario Centre arena.
* No information about OVG was released, said city real estate head Ray Kessler, because negotiations over the arena and concert hall lease with the new partner are still being negotiated.
However, he noted the minimum arena investment noted in the master agreement — $50 million by HUPEG — is now out of date, because OVG has publicly pledged to add at least another $50 million on top. That means “the magnitude of improvements, to the lower bowl and overall, are going to be substantially more,” Kessler said.
The document says HUPEG will use “commercially reasonable efforts” to relocate the Salvation Army from its York Boulevard location — and that the city will help “facilitate” those efforts.
Neither the city nor HUPEG owns the shelter — and the Christian-based organization has previously said it has no current plans to move. McHugh said Wednesday the agreement does not reflect any desire on behalf of the city to see the shelter move — only an offer to “facilitate discussions” if desired.
The master agreement spells out that the renovation plan for the arena does not depend on Commonwealth Games funding becoming available from upper levels of government.
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