Feb 19, 2010

Coalition wants Auditor General to investigate P3 financial arrangements of Convention Centre Towers Proposal

STV has written to the Nova Scotia Auditor General (AG), Mr. Jacques Lapointe, to ask that he investigate why HRM and the Nova Scotia government are continuing in their plans to build a P3 Convention Centre despite the concerns about the P3 financial arrangement and the fact that this is triggering the doubling of the towers to 14 and 18 storeys in the proposed location.

Summary of Concern

1. Public money triggers the towers doubling in height and blocking the view;
2. Other locations are available;
3. Public money will privatize the public's view without public consultation;
4. The convention centre is super-sized;
5. P3 financing;
6. Criterion Consultant is acting both as a consultant to HRM and the Province and a promoter of the proposed P3 Convention Centre at the Kate Carmichael lecture;
7. Criterion Communications may be representing the business communities' interest over the public's interest “....lobbying efforts which appeal to the logic of an argument and the support that a lobby group feels it can deliver is not usually the primary factor in how decisions get made. Of much greater importance is the extent to which a decision appeals [sic] to respond to public needs and concerns. From the point of view of an exercise like this, it means there is a need to create an ‘environment’ of community opinion in which government is encouraged and supported in making a decision favourable to our interests”
8. There is no costing of what will happen to the provincially-owned World Trade and Convention Centre;
9. Grafton Street between Brunswick and Prince, a public street, will be turned into part of the Super-blocker;
10 & 11. Turner Drake reports on downtown are ignored
12. International Conventions book 10 years ahead- why is there such a rush if it is the wrong decision?

Details on Concerns:

1. Public Money Triggers Towers Doubling in Height:
Save the View does not believe there has been proper examination of the harm or negative impact the convention centre towers will cause, as the focus is on the supposed benefits of the convention centre. The result of a special clause in HRMbyDesign doubles the towers if public money is used and although public money is being used, there is no opportunity for public participation.

2. Other Locations are Available: There is over a million square feet of empty space in the downtown, several of these empty lots could be appropriate sites for a convention centre where the proposed towers would not interfere with the view of the Halifax Harbour and George’s Island..

3. Public Money will Privatize Public View: Government money should not benefit one developer over another by subsidizing development especially when these subsidies are providing financing leverage for construction of the high rise hotel and office towers. This is using public money to privatize the public’s view with no opportunity for public participation in this decision making process.

4. Super-Size: The proposed 150,000 square foot convention centre could be accommodated in a two-storey building on the 80,000 square foot building site. Office space or hotel units associated with the Centre could be low-rise buildings erected on some of the more than one million square feet of vacant land in the downtown area. The size of the proposed P3 convention centre for Halifax is much larger than those in comparable Canadian cities- for example Ottawa, Canada's capital, has a larger population and more air routes connecting to it. Ottawa proposed only 43,617 square feet of meeting space and 14,500 square feet of ballroom.

5. P-3 Financing: There is a lot of evidence apart from the NS Auditor General's recent report that indicates P3 construction is more costly than conventional funding for hospitals<x-msg://804/#_edn1>1 or indeed the cost risk to the public of P3 schools was well understood even at the time that Nova Scotia embarked on P3 school development.<x-msg://804/#_edn2>2. This is in part al least attributable to the preferred rates with which government is able to borrow as compared to the private sector however the Canadian Union of Public Employees, has provided general analyses of why P3 ends up harming the taxpayer’s interests<x-msg://804/#_edn3>3.

6. Criterion Communications & Confidentiality: The city of Halifax and the province of Nova Scotia have engaged the same consulting firm, Criterion Communications of Vancouver to review the market potential, facility definition and management/governance /funding options for Trade Centre Limited on their behalf. Criterion Communications did not do any primary research for the April 2009 report however the Coalition STV was unable to receive the full report, only the redacted version as we were told the consultant was working for the province and HRM. Even so the principal for Criterion Communications of Vancouver will be delivering the public Kate Carmichael Lecture at the WTCC on how the proposed new convention centre will revitalize the downtown.

7. Criterion Communications & Conflict of Interest: The principal for Criterion Communications as President of the Joint Meetings Industry Council (JMIC) and Executive Director of Convention Centres of Canada wrote in a 2004 report to the JMIC on raising the profile of the industry he made the following statement: “This means that lobbying efforts which appeal to the logic of an argument and the support that a lobby group feels it can deliver is not usually the primary factor in how decisions get made. Of much greater importance is the extent to which a decision appeals [sic] to respond to public needs and concerns. From the point of view of an exercise like this, it means there is a need to create and ‘environment’ of community opinion in which government is encouraged and supported in making a decision favourable to our interests”<x-msg://804/#_edn6>4. Save the View believes the bias of such a consultant may represent only the interests of the business community and not the interest of the public.

8. Existing World Trade & Convention Centre: The fate of and cost implications for the existing World Trade and Convention Centre (WTCC), which is owned by the province are not known, either if it were to be re-purposed or put up for sale.

9. Loss of Grafton Street: There does not seem to be public awareness that the developer’s design includes a take-over of Grafton Street from the city in the block between Sackville and Prince Streets. A roof area over Grafton Street and a pedestrian way in between the two blocks of towers will increase the super-blocker effect the proposed towers would be creating. These towers are already in a direct line of “super-blockers” in the area of Market Street which are already understood to negatively affect circulation in the downtown: Cogswell Interchange, Scotia Square and Halifax Metro Centre. It is well known that high-rise towers create shade, wind turbulence and because of their scale do not make cities more liveable.

10. Turner Drake and Partners & Halifax’s Unique Character: Turner Drake and Partners, a prominent realty firm in Halifax, reports that “A key demand for all types of space in Downtown Halifax is its unique character which in turn is defined by the heritage buildings and their relationship with the harbour.” The proposed Convention centre towers are destructive of that relationship.

11. Turner Drake and Partners & Demand for Class A Office Space in the Downtown: Turner Drake and Partners also determined in a recent study that Class A Office space in the downtown currently goes for ~$18/ft2 whereas newly constructed Class A office space would have to rent for ~$28/ft2. They have determined that this is a price beyond a tipping point and that businesses would locate outside of the downtown rather than pay this premium price. How the provincial government intends to contribute to this P3 development has not been indicated. If for example the government becomes an anchor tenant, they may be paying 50% more than the average rental price. Furthermore should government offices move from existing rental property they will be creating vacancy. As found by Turner Drake there is already adequate Class A office space- and there is going to be abundant empty office space in the downtown when Emera and NSPI move from Scotia Square into their new waterfront renovation.

12. Timeframe for Convention Centre has Flexibility: Larger international convention centres may book ten years in advance, therefore there is time for the government to work to locate a public convention centre in another location that will not have a negative impact on the view from Citadel Hill.

1 http://www.pialberta.org/program_areas/privatization/calgarys_abandoned_p3s
Existing P3 hospitals in Canada have proven to be more expensive than public options. It is estimated that the choice to build the Brampton, Ontario hospital as a P3 will cost at least an extra $124 million. In Abbotsford, payments to lawyers and consultants amounted to $24 million before the 35-year contract was even signed. The total project cost rose to $355 million from an initial estimate of $210 million, and the annual cost rose from an estimate of $20 million up to $41 million.

2. Public Interest Alberta "Calgary's Abandoned P3 Projects".

3. P3 Recreation Facilities - Who Benefits?

4 Privatization and the Schools Sector