Deal for entertainment precinct said to be close
The city has already shaved $78M out of the long-term capital budget in anticipation of an agreement
A deal between the city and the consortium planning to renovate and maintain FirstOntario Centre, the FirstOntario Concert Hall and the Hamilton Convention Centre is now close, both sides say.
Barring any unforeseen glitches, things should wrap up within the next couple months allowing for work to begin, according to Coun. Jason Farr, who represents Ward 2.
“My sense is we’ve dotted a lot of i’s and crossed a lot of t’s,” he says.
“We’re hopeful (and) optimistic that we
will cross the finish line very soon,” PJ Mercanti, president of the Urban Precinct Entertainment Group (UPEG), said earlier this month, a position he echoed this week.
It has taken longer than expected to get here.
Back in the summer, UPEG was chosen by the city to be the group to handle the project but it was all riding on the completion of a master agreement between the sides. At that time, the city’s press release said that a deal would’ve already been reached by now and renovations would begin in the fall. Alas, COVID got in the way. “Life got kind of crazy so it just kind of delayed things,” Mercanti said a few weeks ago.
Why should this matter to you and why should you be hoping the two sides wrap things up with no catches or hang-ups? For reasons beyond simply wanting a shiny new — or renewed, at least — arena, concert hall and convention centre and some other development for the city core, that is?
Because, even though the work would be done with private money, the outcome will affect your taxes.
A year ago, the city’s capital budget included a long-range look at what we were going to have to spend to maintain and upgrade the three entertainment venues. It wasn’t pretty.
This year we were going to be on the hook for $11 million and change. Most of it for the arena, but $2.4 million for repaving of the square between the concert hall and the art gallery, and another $400,000 for replacing wood railings in that area. Plus another $168,000 to fix up the arena courtyard.
However, anticipating the completion of a deal that would take the responsibility for the buildings off the city’s hands, the entire thing was whittled down during budget discussions the other day to just $800,000 for typical “life-cycle renewals.”
If that original $11 million sounds like a lot, we’re barely getting started.
In 2022 we were going to be on the hook for $7.8 million. Jump to 2023 and it was $8.8 million. And then from 2024 to 2029 the budget called for $7.8 million, $5.8 million, $9.3 million, $9.2 million, $9.2 million and $9.2 million.
In case your calculator is broken, that’s a grand total of $78.1 million in less than a decade. Which could turn out to be more if unexpected issues arose.
“It’s an increasingly heavy burden on the taxpayers,” Farr says.
All of that is now off the books, assuming the deal happens. Which is why taxpayers should be rooting for smooth sailing.
If the deal were to fall apart now, the city would have to put those millions back in the budget, which you would cover through your property taxes. Failing that, the buildings might have to be shut down, Farr says.
“Or go back out to the market (to) other consortia who may be still interested,” he explains.
Yes, that is the third option. Don’t forget, the Vrancor Group had also come forward last summer to make a pitch for the project. But that would mean starting the process over. Which would take time, assuming it got done. In the meantime, the city could be spending more to maintain buildings it was actively trying to unload.
“If anything goes wrong with the mechanical systems or anything like that, the city is still on the hook,” says Rome D’Angelo, the city’s director of energy, fleet and facilities management.
At a time we’re scrambling for cash — and really, when are we not? — and planning to divest ourselves of this cash sponge anyway, far better to do so as quickly as possible. Before we have to spend a single dime more than is necessary.