Gary Korpan our ex-mayor emailed me to say I was incorrect in my claims about the cost originally promised to deliver the conference centre and the final cost to city taxpayers. My assertion that when Nanaimo taxpayers voted on the referendum to borrow $30,000,000 to build the centre, it was under the impression that the total cost for the project was not to exceed $52.5 million. Follows is Gary's explanation as to why I am incorrect.
Hi Jim
I agree with being antsy about public
institutions "investing" (to use the usual euphemism) in many
projects. Particularly facilities that government has not traditionally funded.
Too often it is a semi-hidden handout to some private company or special
interest group.
All of the facilities Nanaimo built,
(with the core conference centre part authorized by referendum), for its Downtown
Revitalization fall within the category of projects usually funded by the
public.
Our multi-part initiative tried to
include complementary "private" investment facilities (eg. Shaw
Communications cost sharing of the Auditorium/New Council Chambers was
successful; the Tri-Arc/Millenium funding of a hotel was, so far,
unsuccessful.)
Your repeating of the allegation that the
various facilities (Shaw auditorium, New Museum, commercial space, underground
parking, conference centre with additional meeting space) cost more than
budgeted is misleading and incorrect.
Cost estimates of the
project(s) changed several times from the early days of 2002. As delays were
incurred, locations, scale, & designs changed, components added, decisions
delayed, etc. cost estimates rose. (Remember the demand for redesign and
"let the November 2005 municipal election decide" caused long and
costly delays.)
No actual whole project budget
was finalized until January 2006 after the new Council elected in Nov 2005 had
reviewed the entire proposal with updated costings. The one, and only, total
project (or "actual construction") budget was set by the new Council
in early 2006 at $72.5 million.
It was followed and complied with due to
Al Kenning's diligent project management controls; as the post project costing
analysis showed.
The reference to $52 million was from an
early 2004 cost estimate done (during the recession) for the November
2004 referendum; long before the later inflationary time when construction
costs were rising at about $1 million per month! That estimate was at least 2
full years before construction began!
Also, remember the B.C. government
contributed their full share; Canada reneged on their full share but paid some
of the museum costs; Shaw contributed their promised share.
It is important not to mix apples &
oranges from different time frames, different combinations of facilities,
different locations, different partner "promises" (fulfilled or not).
It is also important to remember if each
of the facilities were built separately the aggregate cost(s) would have been
massively higher.
Let's also not forget the breach of
promised financial support from both the private "hotel partner" and
the federal government added to the "cost to Nanaimo taxpayers".
I trust this clarifies the issue. Feel
free to post this.
Gary
Say what, Ex-Mayor!
ReplyDeleteI don't give two-bits about the initial guesstimates. My bank account feels the last amount - a whallopping $72.5 million for an empty building.
Mr. Korpan glosses over a few significant points. This story started in 2000 with a Mayor's Task Force which set aside $5 million for capital expenditure on a conference centre. By 2001 this was up to $10 million. By January 2002 it rose to $12.4 million from the City to redevelop the Malaspina Hotel into a conference centre.In October the developer of the centre needed an additional $4 million and the City balked. In early 2003 the City, undaunted by experience, called for proposals offering $12 million and terms on a city parcel of land.One bid was received for $18.5 million. Talks collapsed. In Nov. of 2003, it as proposed that the City did not need tenders IDoes this sound familiar?).In January of 2004 Councillor Cantelon and City Official Al Kenning attended a conference entitled "If you Build it, They will come" in St. Petersburg, Florida. In May of 2004 Council decided in-camera to buy up Commercial Street properties. In September of 2004, the City announces the New Nanaimo Centre and, finding that the developer selected did not wish to be part of a "bidding war" carried on with Triarc, a firm with which contact had been made in Florida. And October 4 Fact Sheet on the NNC stated: "Funding for the project is expected to come from: Triarc ($47.5M), City long-term borrowing (up to $30M), City reserves ($19.5M) and grants from senior governments ($3M).
ReplyDeleteOn Nov. 20, 2004, a referendum vote was held which stated: "Are you in favour of adopting “NEW NANAIMO CENTRE LOAN AUTHORIZATION BYLAW 2004 NO. 5750” to permit the City to borrow up to 30 million dollars and carry out the terms of a partnering agreement with Triarc International Inc. for the development of the New Nanaimo Centre project?” (Note the two parts of this question.) The referendum carried by a 52/48% margin which according to surveys had been falling rapidly as more was learned about the scheme. It was soon determined that the referendum had not been legitimately held due to mistakes in procedure, but instead of re-holding the referendum, the City went to the Provincial Government and asked for and received legitimation through the Miscellaneous Statutes Amendment Act in February of 2005. In June of 2005 demolition of the Commercial Street properties began. In September the demolition of the Nanaimo Foundry began.
On September 29, 2005, the City Manager (Mr. Berry) and his Deputy (Mr. Kenning) presented to Council their New Nanaimo Centre Progress Report which indicated that the cost to Nanaimo Taxpayers would be $20 million (40%) more than had been presented before the referendum. To the best of my knowledge, no one paid any price for this egregious error. On Oct. 3, 2005, Council accepted this cost and related recommendations from Staff, and the next stop was the November 2005 municipal election. The only Councillor now serving from that time is Councillor Brennan. The history of this costly venture ($3.2 million 0r about 3.5% of property taxes last year) and growing as we reach the maintenance stage of the structure, is tangled with changing names, externalities such as the demolition of the Foundry and the Arena, structure changes, defaults, etc. til recognition of what actually happen in this tortured matter can scarcely be narrated without more notes than content. Interestingly enough, to my knowledge, there has never been a forensic review of this project.
A much more detailed history of the events surrounding these turbulent times can be found in the book: "Nanaimo between Past and Future: Critical Perspectives on Growth, Planning and the New Nanaimo Centre" edited by Eric W. Ricker and Frances Christopherson and published by the Friends of Plan Nanaimo at the end of 2005. It is available at the Vancouver Island Regional Library.
Ron Bolin provides an interesting and accurate overview of events concerning the ill-fated "New Nanaimo Centre" project. I wish to add two points to the discussion:
ReplyDelete1. If I understand it correctly, Ron's commentary seems to suggest that perhaps some other bidder was reluctant to get involved in a "bidding" war. To be clear: it was Triarc's own Melvin Katz who made that statement -- quoted in the News Bulletin at the time, if memory serves.
2. Ex-mayor Gary Korpan may choose to somehow suggest that the projected cost figures were uncertain at the time of the referendum but there's no doubt that voters thought the cost would be $52.5 millions. That figure was cited frequently and by no less a figure than our former city manager: he acknowledged in his report to council dated July 13, 2006, that voters had approved only that amount from city coffers. I also recall the ex-mayor stating during the referendum campaign that our highly-talented senior city staffers had made all the room necessary for contingencies within the $52.5 million total.