I think this article in the T&T from earlier this week nicely encapsulates the course of events surrounding the Downtown Events Centre during the year 2013:
Downtown events centre took big step in 2013
Tuesday, December 31, 2013
Times & Transcript
By: Brent Mazerolle
http://22864.vws.magma.ca/index.php?&article_id=12281
The idea of building a multi-purpose events centre in downtown Moncton has been around for years now, but 2013 was the year things got real.
True, it's still not clear where the millions of dollars to build it will come from or even how many millions will be needed, but Moncton city council demonstrated this year that it was serious about getting the project done in two key ways.
The first thing it did was narrow the field of potential partners down to two following a request for qualifications, but the biggest demonstration of council commitment was the vote to purchase of most of the former Highfield Square property in downtown Moncton.
Council voted 8-2 in June to spend roughly $6 million on the land. The City of Moncton expects to spend another $4 million to $5 million on demolition of the Highfield Square building, asbestos removal and addressing contamination of soil at the site. In the meantime, the city has had a full professional appraisal done valuing the property at $11 million, but the net value is about $6 million after cleanup and demolition.
In a surprise development, though, the City of Moncton will now start expropriation proceedings to acquire it. In early 2012, the city entered into a six-month option agreement with Warren Gate Investments Inc. for the eventual acquisition of the property. The option included several conditions, including a key one that Warren Gate, a large global landowner, secure the permission of its lenders.
The problem is Warren Gate's lender, the Bank of Scotland, ran into difficulties.
Once among the largest banks in the world, the Bank of Scotland was rescued by the British government amidst scandals and financial collapse in 2008. In the five years since the government stepped in, a certain level of chaos has continued.
Just as you can't sell a home you still owe money on without the approval of the lenders who hold your mortgage, so it is for a commercial transaction such as this one. Unfortunately, Warren Gate has apparently not been able to work with its troubled lender to satisfy the conditions of its agreement with Moncton.
With the City of Moncton about to issue a request for proposals on the downtown centre to two pre-selected development consortia who met the requirements of a preliminary request for qualifications last spring, the municipality has to put to rest the significant issue of where a centre would go. Therefore, the city has begun expropriation proceedings.
Meanwhile, council unanimously accepted a project schedule earlier this month that shifts around the order of steps a bit but does not alter the overall plan to issue the request for proposals by March 2014 and to select a successful proponent by the end of 2014 or beginning of 2015.
Once a proposal is selected, the negotiations between the successful proponent and the city would likely take until the end of 2014 or into early 2015. Assuming the latter, construction would start in the summer of 2016 and take about 18 months, bringing the city to New Year's of 2017. The city has hired the firm Deloitte as a professional consultant on the project, to help it through the process.
Also this year, a poll in August found Moncton residents seem to support the development of a new downtown sports and entertainment centre when given the choice between a new downtown centre or the refurbishment of the Moncton Coliseum.
The poll by Corporate Research Associates Inc. found six in 10 (59 per cent) of Moncton respondents said they support the development of a new downtown centre, while three in 10 (28 per cent) support the refurbishment of the Moncton Coliseum.
Meanwhile, 11 per cent said they don't support either development, while two per cent are unsure or did not offer an opinion.
The cost for the development of the centre was estimated to be approximately $105 million when the survey was done. Supporters believe the development could be an economic boost for the downtown area, while others believe the price tag is too high. The cost for the refurbishment of the Moncton Coliseum is estimated to be between $27 million and $40 million; however, some say there are few benefits to revamping a smaller facility that is outside the city centre. A renovation also comes with the problem of what to use in place of the Coliseum while it undergoes what could be a multi-year project.
The facility has two anchor tenants, the Moncton Wildcats junior hockey team and the Moncton Miracles basketball team, that would have to be accommodated, as well as the concerts and especially the numerous trade shows that take place there each year.
In another development, council heard the proposed centre would create hundreds of jobs and millions of dollars' worth of economic activity during construction, and then be an important catalyst for growth in the city's most critical neighbourhood for years to come.
Université de Moncton economist Pierre-Marcel Desjardins and economic development consultant David Campbell presented a pair of studies at a special public meeting of Moncton city council back in June, shortly before council voted to buy the Highfield Square land.
Desjardins focused on the more easily quantifiable impacts construction of a presumed $105.4-million project would have, while Campbell looked at the broader impacts and set the context.
That context is a bit troubling, as it turns out.
Campbell, noting that the downtown encompasses just 1.5 per cent of the city's land area but represents 14.4 per cent of the city's tax revenues, demonstrated how it is growing stagnant despite the more than 800 businesses and 18,000 people working there.
When he spoke in June, there was 350,000 square feet of vacant office space in downtown. The vacancy rate has risen from 6.6 per cent in 2011 to 13.5 per cent in 2013.
Meanwhile, the number of people living downtown dropped by 3.3 per cent between 2006 and 2011, even as the population of the city overall has grown almost eight per cent. That's likely because downtown residents are older than the average population. By contrast, Halifax's downtown grew almost 10 per cent despite its overall population declining in the same period.
Neither consultant suggested an events centre alone would bring more and younger residents downtown, but Campbell said it would be a catalyst to a vibrant downtown. He did note London, Ont., saw its downtown population grow 30 per cent after the Budweiser Gardens, and the other related elements of London's downtown revitalization strategy, were built.
'You have to look at the centre as part of a broader strategy for downtown,' Campbell said.'To think of it as a panacea is a big mistake.' Saying there was always going to be a risk in spending public funds to encourage private development, Campbell said if the city uses four of the 11 acres for the centre itself, private development on the other seven acres could pay the mortgage on the centre in increased property taxes.
He suggested that the development the centre would encourage over a threeto five-year period could create land valued at up to $200 per square foot, though he admitted that figure was probably a bit higher than was realistic.
Nevertheless, he said the actual figure would be far above the $10 per foot the land currently commands as surface parking in a city glutted with surface parking.
With the abandoned shopping mall at the western end of downtown actually having the potential of bringing down other property values in the area, there is risk both in doing something with the land and in doing nothing.
'You've grown 30 per cent since the Coliseum was built. That's pretty impressive,' Campbell said, comparing Moncton to a baby quickly outgrowing its diapers and needing to decide what it wants to be when it grows up.
Apologizing in advance for what he called 'hyperbole,' Campbell told council, 'You have to decide, are you a big Miramichi or a small Calgary?' Meanwhile, Desjardins said the scale of the project would have a significant economic impact both inside and outside the province when it came to construction, creating the equivalent of nearly 1,500 full-time jobs over its duration.
And while it is difficult for a layperson to grasp, Desjardins said the construction of a $105-million project would actually have $340 million in direct and indirect impacts here and in the rest of Canada.
And as Coun.-at-large Dawn Arnold first pointed out, Desjardins' findings that construction alone would generate $10.7 million for the federal government in taxes and another $6.2 million for provincial coffers helps make a case for their funding involvement.
Of course, none of this will happen if the city can't find the financial partners it needs for the estimated $100-million project, or if city council at some point decides to stop moving the process forward.
Prev
Linear Mode
