In the later part of
2009 when the suggestion of building a new facility to replace the FW Gardens
was proposed, I was supportive of the project. On Jan 16/2010 I wrote a letter
to the CJ suggesting Innova Park to be a great location for such a facility, and
that location could likely attract a major hotel chain to partner in it, with
“convention facilities”. The original price suggested was in the $50-60 million
range for a 5500 seat facility. I thought this to be a fair price range, when
St Catherine’s ON was building a 5500 seat facility for $50 million. Since that
original figure, this project has gone completely off the rails, now ringing
the register at $106 million plus before the inevitable cost over runs that
always occur during building. As this project has rolled on, serious concerns
of the public have been ignored, and quite clearly, reality and common sense
has vanished completely! As a tax paying citizen of Thunder Bay, I cannot
support this project in its present form at any location and urge this “runaway
train” project to stop before it hits the wash out its quite clearly heading
for! Should this project continue, the end result will not be pretty, creating
long term financial woes for our city! I have several concerns about this
project, which concern me immensely!
1/
The cost of this proposed facility has escalated drastically to a prohibitive
point! While initially $50-60 million as previously stated, it has pretty much
doubled in price to $106 million before the cost over runs during construction
and surprise “revisions”. The Water
Street location, which the people largely reject, yet city powers seem to
choose to deny and drive down the people’s throat, is the primary reason for
this prohibitive price! When the price jumped from $80 million, it was because
additional parking facilities would need to be constructed at Water Street. In
the reports, I saw no significant changes to the Innova Park site which already
included parking lot costs, yet it jumped up that extra $20 million as well, how?
I can only believe it is because city powers already decided on the location,
and the public consultations were nothing but a complete sham! At the meetings
I was able to attend, as well as in local media the sales pitch for Water
Street was quite obvious. One councillor I met at one meeting was stressing to
me “It’s gotta go to the waterfront”. Public opinion & preference be
damned, it’s going to Water Street! The Consultants report charged up things to
Innova Park I believe to be “bogus” in an effort to inflate the Innova Park
cost and make Water St more attractive regardless of the real cost there!
Claims such as four-laning the roads inside Innova Park and the addition of two
entrances are both mis-allocated and unnecessary. Interestingly the two additional
entrances have since be added on Golf Links Rd and the Harbor Expressway after
Council’s coronation of Water St. Why would we have needed to four lane Innova
Park roads when patrons would be traveling in two lanes of traffic in the
former downtown? I believe the public knows the answer to this, as does council
and city administration. Councillor Boshcoff
states that the 2010 municipal election was a de-facto vote on building
this facility. Since that time, both the cost and scope of this project has
changed dramatically. To make such a claim now is completely irresponsible in
my view! Denying the public the choice, as council has chosen to do, and
proceeding further is dreadful and will have a long term damaging effect that
will contribute to its failure! Ultimately, the people will have a
vote on this, by either supporting it or not! I think it makes far more sense
for the people to vote, before more than $106 million is spent, than after it
is spent!
2/
The projected annual operating deficit of this proposed facility, is stated as
$1.198 -1.4 million annually, $540 thousand in the convention facility alone!
This loss is in addition to the operation of an idled FW Gardens, presently
with an operating loss of approximately $600,000. With the FW Gardens quite
likely to become a non-revenue producing facility, what will its operating
costs then be? With lofty projections of 180 events in the convention center
and 82 in the spectator arena, there will be a significant increase in the
operating deficit should those objective’s fail to be met. A major factor, the
consultant’s report failed to address is, what competitive advantage does Thunder
Bay have that will lure conventions etc from where they are being held to here?
With a “glut of convention facilities in North America”(Macleans Jan 16 2012),
Thunder Bay will be in tough competition to achieve these numbers! Supporting
facilities being in close proximity to a center is of great importance to the
success of the facility, council’s chosen location is not. Hamilton chose to
locate its convention facility away from their “supporting facilities”,
Hamilton is in Ontario’s “Golden Horseshoe” yet suffers. An independent KPMG
study (Hamilton Spectator June 22/ 2011) identified Hamilton as having the
“least attractive hotel package in an increasingly competitive Ontario market”.
With 1331 hotel rooms in downtown Hamilton it struggles, Thunder Bay has 589,
hardly a strength but rather a severe handicap! A City of Thunder Bay Corporate
Report (2011 105) states that, “a
critical component of the project is the proposed convention multipurpose space
and the close proximity to hotel accommodation will be a very important
consideration”. This is clearly absent
in this project and will greatly impede any likelihood of these lofty
objectives being met, or likely even close to being met! Following a failing
model such as Hamilton, is more so a road to failure than any type of success
and the likelihood of the operating deficit being drastically higher than
forecast!
3/ The proposed entrance of the City of Thunder Bay into the hospitality business, already adequately served by the private sector is of great concern, most particularly when it is at a loss estimated at $540,000 the first year! This clearly makes no sense whatsoever, and should be dropped immediately. These private facilities pay taxes to the city, the proposed facility will not. This gives the city facility an unfair advantage over the private operators, which could prove lethal to some leading to their closure. The loss of one or more of these facilities will leave a shortfall in our tax base, which no money losing facility can fill. In the March 3/2014 council meeting, Councillor McKinnon questioned why the city was in the day care business, after getting out of the money losing golf business? Why then is city council more than willing to enter into a bigger money losing business that can damage local tax paying businesses? Without question, the convention center facility of this project must be deleted, as it truly does not serve a positive purpose.
4/This project fails completely in providing parking for the expected patrons, and convenience accessing the facility. Despite claims of adequate parking for the Water St location, there is not. A March 2012 recommendation for a 500 car parkade at a cost of $16 million, was later reduced to a 200 car facility, how will that answer the parking question, it won’t! There have been suggestion’s that, the parking problem could be solved with patron’s parking at other large lots in the city, such as Lakehead University and be shuttled to the facility. This would require a significant number of shuttles, at what cost to transport the expected large number of patrons, to and from and navigating through the congestion would hardly leave the feeling of joy, but rather leave a bad taste with patrons. Claims of parking within 10 minute walks from the facility, may be welcome in summer months, but we have lengthy periods of unpleasant weather. A night of entertainment, followed by a walk through snow & cold can easily convince one that staying home “to watch the Leafs” would have been a better choice. It would be wise to understand,“If there ain’t no audience, there just ain’t no show”! I have no doubt that should this facility proceed at that location, the parking will be dealt with by almost immediately pushing the parkade number back to 500. With the problem still existing as attendance is less than forecast, surrounding properties will be purchased to develop additional parking in an attempt to salvage a majorly flawed and disastrous plan. This will add a substantial amount to an already overly expensive location. Recall, Innova Park’s cost included 2000 parking spots at $80 million!
3/ The proposed entrance of the City of Thunder Bay into the hospitality business, already adequately served by the private sector is of great concern, most particularly when it is at a loss estimated at $540,000 the first year! This clearly makes no sense whatsoever, and should be dropped immediately. These private facilities pay taxes to the city, the proposed facility will not. This gives the city facility an unfair advantage over the private operators, which could prove lethal to some leading to their closure. The loss of one or more of these facilities will leave a shortfall in our tax base, which no money losing facility can fill. In the March 3/2014 council meeting, Councillor McKinnon questioned why the city was in the day care business, after getting out of the money losing golf business? Why then is city council more than willing to enter into a bigger money losing business that can damage local tax paying businesses? Without question, the convention center facility of this project must be deleted, as it truly does not serve a positive purpose.
4/This project fails completely in providing parking for the expected patrons, and convenience accessing the facility. Despite claims of adequate parking for the Water St location, there is not. A March 2012 recommendation for a 500 car parkade at a cost of $16 million, was later reduced to a 200 car facility, how will that answer the parking question, it won’t! There have been suggestion’s that, the parking problem could be solved with patron’s parking at other large lots in the city, such as Lakehead University and be shuttled to the facility. This would require a significant number of shuttles, at what cost to transport the expected large number of patrons, to and from and navigating through the congestion would hardly leave the feeling of joy, but rather leave a bad taste with patrons. Claims of parking within 10 minute walks from the facility, may be welcome in summer months, but we have lengthy periods of unpleasant weather. A night of entertainment, followed by a walk through snow & cold can easily convince one that staying home “to watch the Leafs” would have been a better choice. It would be wise to understand,“If there ain’t no audience, there just ain’t no show”! I have no doubt that should this facility proceed at that location, the parking will be dealt with by almost immediately pushing the parkade number back to 500. With the problem still existing as attendance is less than forecast, surrounding properties will be purchased to develop additional parking in an attempt to salvage a majorly flawed and disastrous plan. This will add a substantial amount to an already overly expensive location. Recall, Innova Park’s cost included 2000 parking spots at $80 million!
5/ The
expectation that having an AHL team as the principal tenant long term is quite
unlikely. Franchise history in the AHL shows at least 22 AHL franchises have
relocated in the past 13 years, with only 3 franchises remaining in the same
locale for more than 20 years! A consultants reports states a break even number
for an AHL team is 4200. The LU Thunderwolves average 2500-3000 fans with a $12
ticket price, one of the best attendance averages of any local hockey team in
our history. AHL ticket prices in Canada range from $20-40, to expect an additional 12-1500 fans
at a60-100% higher ticket price can hardly be considered a recipe for success!
Team owners are not in the business to break even, ownership is in it to make
money! In efforts to secure professional sports franchises, communities are
sometimes expected to cover team losses, is this an avenue Thunder Bay is
heading down? The use of tax dollars should absolutely not be considered to
cover any team losses should this suggestion arise! This
same principle also applies to concert/theatre promotion, promoters are in it
to make money, not break even. Abbotsford BC is the red flag to these lofty
ambitions that are devoid of reality, and are delusional thinking! Abbottsford
covers their AHL team’s losses to the degree of $2-3 million each season, I
would think it is a fair expectation that team is a likely candidate for
relocation when its deal with Abbottsford expires. Left with an empty rink,
what will be the burden to the taxpayers? By all appearances, city powers are
more than willing to travel down this “yellow brick road”. Interesting to note
that Vancouver BC was a community that warned this city against our perennial
white elephant Victoriaville. Will Thunder Bay city powers again ignore the
experience of another BC community and lead the city down the “yellow brick
road”? Sadly I am afraid they will, with disastrous financial peril to our
community!
6/
Forecasts of “Economic Impact/Spinoff , claims of being “Economic Drivers” and
“job creators”, are in my opinion nothing more than “snake oil” to make these
projects sound more attractive and something they really are not! I find in
most cases these forecasts are usually overstated and go largely unfulfilled.
The reality that occurs when the “honeymoon” period ends is usually a further
burden on already strained budgets, both of the community and its overburdened
tax payers, to satisfy delusions of a select few feeding an “appetite for
destruction”! The construction of any facility does provide work short term, is
this a selling point I think not, and any long term jobs created are likely
nothing more than low wage. Any common sense cost/benefit analysis would
conclude that in its present form and cost, this project should be halted and
rethought much more sensibly! Spending in excess of $106 million and rising is
a dangerous gamble Thunder Bay should not proceed any further with. We are
looking at a location that is quite clearly cost prohibitive, with likely cost
over runs that will drive the final cost in my estimation in excess of $150
million by the time the parking situation is reasonably addressed! I believe
the expected annual operating costs are understated, as unfulfilled projections
will drive the costs in excess of $2 million annually quite quickly, and grow!
Thunder Bay’s “contribution” to this projected, presently claimed to be in the
neighborhood of $35, is to come from the “Renew Thunder Bay” fund which
presently has only $20-21 million in it, where will the additional $14 million
come from? Should city powers choose to proceed with this, I believe our city
is headed towards a financial tsunami which will cripple Thunder Bay
financially! In closing I say, “Be careful what you wish for Thunder Bay, it
might come true”!
