Will it be deal or no deal on Carmen’s offer?

City can’t show favouritism to consortium over proposal to fund venue study

Make no mistake, the offer from the Carmen’s Group to fund a $250,000 redevelopment study of the city’s aging downtown entertainment venues is still very much in play.

But rather than just snapping up the “no strings attached” proposal, councillors quite rightly punted the pitch to city staff to review any legal pitfalls.

Staff were also directed to explore the possibility of securing funding from other private sector interests besides the Carmen’s-led local consortium.

Acting city manager Mike Zegarac says he expects staff to define the scope and parameters of the proposed study and then determine what private sector partners are willing to participate.

“This absolutely needs to be a citydriven, independent process whereby we scope out the approach and the principles and the outcome we’re looking for,” Zegarac said in an interview.

According to Zegarac, the city needs to legally ensure that contributors don’t receive any advantages if the study ultimately leads to construction tenders.

In putting the unsolicited offer to councillors on Monday, Carmen’s CEO PJ Mercanti made it clear that though the consortium sees it as a “good community investment” the group fully intends to put forward a bid when the time comes to overhaul or rebuild the landmark facilities.

So clearly the city has to guard against both the possibility and perception of favouritism.

The consortium consists of Carmen’s, the Ron Joyce family, LIUNA, Fengate Capital and Meridian Credit union. Its offer coincided with a staff proposal to spend up to $200,000 from the tax levy to pay for a similar report on the future of FirstOntario Centre (formerly Copps Coliseum), FirstOntario Concert Hall (formerly Hamilton Place), and the Hamilton Convention Centre.

Coun. Sam Merulla loves the idea of the private sector picking up the tab instead of taxpayers. But Merulla and others also want to cast a wider net for potential other partners and to make to sure everything is in proper order.

Consortium co-ordinator Jasper Kujavsky told councillors his group believes the concert hall requires some tweaking but is generally in good shape. What the consortium really wants is to study what should happen to the arena, where should a new convention centre be built, and what are the redevelopment opportunities for the current convention centre site.

Again, those stated preferences highlights the importance of the study being controlled by the city. After all, these are city-owned assets.

Kujavsky says Carmen’s is happy to have the city define the study’s parameters but it will need to look at the extent and range before transferring over any money. He says Carmen’s also has no problem with other private sector players coming aboard with separate contributions.

There’s no question that Carmen’s offer is unusual. But there is a precedent. This is, after all, virtually the same consortium which in 2016 bankrolled a $240,000 report on options for modernizing the arena, which it supplied to the city.

The arena options boiled down to a $68-million renovation and a $252million rebuild. That same report also identified three theoretical sites for a new convention centre — Sir John A. Macdonald Secondary School, the Salvation Army site on York Boulevard, and the parking lot behind McMaster University’s David Braley health centre on King Street West.

The fact that Carmen’s, which currently operates the convention centre for the city, is now attempting to take over management of the arena and concert hall from industry giant Spectra not only suggests wheels within wheels, it underlines why the city has to pay careful attention to any perceptions of preferential treatment.

At the same time, however, Carmen’s should be congratulated for forcing council and staff to shake off a certain complacency and face the fact that there is a growing need to come up with a plan to remake or restore Hamilton’s tired and investment-hungry entertainment facilities. Even if nothing else comes from the offer to collaborate, the private sector group is decisively advancing a public conversation.