Could Hamilton Mountain Arena rejection cost city nearly $1 billion?
(Hamilton Spectator, Scott Radley, Jan 21 2019)
When city council voted 11-3 last week to kill the idea of any further consideration of a 6,000-seat arena at Lime Ridge Mall, it leaned heavily on a staff report urging such a decision.
Not to worry, the report implied. Having a rink downtown is way better. Besides, it won't affect Cadillac Fairview's plans to spend $890 million redeveloping the Mountain property. Might delay it a bit but that's it. So go ahead and vote against it. All is well.
Not so fast, the executive vice president of Cadillac Fairview says.
"I think the short answer to that is, yes, it is at risk," Wayne Barwise says.
Not just short term. Completely. As in, potentially no 1,250-unit residential development, no hotel, no expanded office space, no new jobs. None of it. Because what would lure people there?
"People have not traditionally chosen to live at a shopping centre," he says. "We're trying to transform the shopping centre into more than a shopping centre so it's a mixed use community. So you need other things. You need catalysts."
This should be concerning to everyone in Hamilton.
For the better part of a decade, this town has turned itself into a pretzel over the LRT because of the billion dollars of someone else's money it could bring into the community that would transform part of the city. Supporters — including many at city hall — say it's essential. Politicians and bureaucrats have spent thousands of hours working to make sure that desperately needed cash infusion comes here.Yet when a company says it wants to invest nearly an equal amount elsewhere in the city, there seems to be a whole lot less urgency.
This is troubling. Even more so when one of that company's top executives argues the numbers the city is relying on to make its decision are "plain nonsense." He says the real amount the proposal would cost the city wouldn't be well over $100 million but closer to $27 million.
Read it in full
here.
Aside from his self-interested position as a sports writer, Radley is a content provider at a click-hungry daily. He has an interest in stoking controversy — he's also a call-in host, remember — but has covered the Bulldogs file long enough to know some salient details here, among them:
• Andlauer has been seeking to build a privately funded arena in-market
since 2009;
• The Bulldogs came looking for
disproportionate City subsidies shortly after arriving here — as an AHL franchise;
• The Bulldogs are
the current facility's biggest money loser, and as such would potentially require lower rent at a box-fresh facility than in a 35-year-old barn in order to remain financially viable;
• Andlauer's commitment is unconvincing, going from
50% of capital costs in 2017 to
a cap of $30M paid out over an unspecified term, and with potential back-billing based on suggested sole-sourcing venue management to him for the first 20 years of venue operation (in contravention of City
procurement policy); and
• Andlauer's contention that
"I don't want to dictate where it's going to go" on venue siting (floated in Nov 2017, alongside his matching funds pledge) is equally squishy.
Moreover, CF and the Bulldogs seem prepared to go it alone at
RioCan-owned Burlington Centre. Burlington's council passed on a $130M Pan Am Stadium over concerns that it would require city taxpayers to shoulder a fraction of that cost. (Then-councillor Meed Ward was among the deal's most vocal critics, and
considered any such promises to be baseless: "The Ticats, as far as I know, have no authority to negotiate on behalf of the province or on behalf of Toronto 2015 so saying that there are no capital dollars required is disingenuous. The Ticats do not control the provincial purse strings so there is still a funding shortfall."). CF/Andlauer are evidently trying to shift the thinking of Hamilton's council, but come off as similarly faithless actors.
On top of all of the above is the dubious development calculus argument presented here.
Glossed over is that the promised "development" being used as a yardstick is the blue-sky, blank slate version of CF’s purported $890M development aspirations for the LRM property.
When presented to the City's planning department in
May 2018, those uncosted plans included 12 new buildings, nearly 200,000 square feet of new retail and commercial space, and a 494-space parking garage. The Bulldogs didn't enter into the LRM equation until a year and a half later (though admittedly, in 2016/17, Andlauer and CF had been angling to develop a city-funded arena in T.B. McQuesten Park, along with restaurants, residential towers and a Linc-spanning pedestrian bridge to mall parking).
In
those plans, there was no 6,000-seat arena, and no arena-sized pedestrian piazza (rendered as if it would be the lovechild of Yonge-Dundas Square and Jurassic Park) that would displace parking (losing surface Lots E & H) as well as eliminate private development options in favour of publicly owned facilities, meaning reduced levels of forecast capital investment/tax assessment. All for a facility that, under a best-case scenario, will be dormant for two-thirds of the year. This opportunity cost is never accounted for.
Beyond that, the notion that CF is dutifully providing the city with $12M in property taxes annually contains at least a grain of hokum.
Two years ago, the Spec noted:
Quote:
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Nearly all local malls and office buildings have appealed recent property assessments — raising the prospect homeowners will shoulder more of the city's total tax bill.… Right now, CF Lime Ridge Mall is one of the city's top taxpayers at close to $7.5 million. But it has appealed its 2017 property assessment, as have other large Hamilton mall locations like Centre on Barton and Eastgate Square and smaller plazas around the city.
|
So CF Lime Ridge is already saddling homeowners with additional tax burden.
Radley's clickbaity LRT/LRM investment binary is also askew.
Aside from the attendant transportation benefits, the former investment would repair/replace 14 centerline kilometers of road and upgrade sub-grade infrastructure, as well as unlocking development potential across five wards, all ostensibly funded by the province. The myriad benefits are spread across not just the lower city, but also help reduce the crushing infrastructure deficit felt by all local taxpayers.
The latter, whose cost would be three-quarters carried by local taxpayers, would principally benefit one private landlord of a site a third of a square kilometer in area, it would prop up what is, according to its VP, a failing commercial property (rather than a site of
dynamic urban transformation posting its highest national sales productivity ranking of the last four years even as market peer Mapleview slipped in the same rankings), to the tune of more than $100M. CF can dispute the math, but is fronting zero capital; the past estimates on what it would cost to develop a parking garage — from the City as well as Metrolinx — suggest $40K-$50K/space is not inconceivable, meaning that an 1,800-space parking garage in itself could cost $90M.
If CF really wanted to project credibility as a serious development partner, they would offer to entirely fund the parking garage themselves, breaking ground ASAP in order to accelerate these negotiations and inspire council and staff to re-examine the merits and the math of a scale-model arena.
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