LVEC Task Force Report has been released

[keoadmin]

The Kingston LVEC Task Force Report was released on April 16th. The report and related documents can be found at this locaton on the City of Kingston web site:

http://www.cityofkingston.ca/cityhall/council/lvec/index.asp
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Report Of The Mayor's LVEC Task Force

The report of the Mayor's Large Venue Entertainment Centre Task Force, and its recommendations for replacing the aging Memorial Centre, was made public April 16th.

FEEDBACK -- YOUR OPINION

You can also express your views by calling:
546-4291, ext. 1405

... or by e-mailing: LVECsteeringcommittee@cityofkingston.ca

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The following is the Executive Summary of the final report of the Mayor's Large Venue Entertainment Centre Task Force. The full report can be dowloaded from the links above:

The Task Force has determined that there is a distinct difference between the need in the City of Kingston for an LVEC and the need for recreational ice pads; both are necessary. The current Memorial Centre no longer meets the needs of the community in terms of its seating capacity, its structural design, its condition, and its ambiance. Kingston needs a facility that can host events such as ice-shows, concerts and conferences, in addition to providing a venue for Kingston's OHL team. Such a facility will have a significantly beneficial cultural and economic effect for the City of Kingston and all its residents.

As a result of its consultation and research process, the Task Force considers it essential for the long-term viability of the LVEC that it should be constructed in the downtown core. The preferred site and best site is approximately 11.7 acres on the Inner Harbour along the Wellington Street extension.

The LVEC should contain 6,000 to 6,500 fixed seats with an additional 1,000 on-ice seats for concerts and live entertainment. It should have a single ice-pad of National Hockey League (NHL) size. It should have state of the art technology, and it should be an innovative "green" building for the purposes of evaluation by the Leadership in Energy and Environmental Design (LEED) rating system. It should be architecturally exciting and reflect its superb waterfront location in a unique, historic downtown. Construction should commence as soon as possible. It should be operated by a professional management firm. It should be designed and developed in such a way that it becomes a catalyst for future economic development and a source of community pride.

The cost of the facility will be between $25 million and $30 million

[Emerald]

whatever the result of the debate that is about to occur, it is heartening that there is a realization that design can make a huge difference. The report emphasizes this. This sensitivity to design will spill over to the Block D discussions. Can Homestead hear the winds of change?

[Joe Blow]

What does a Professional Management Team mean??
Are they hiring a company to run this new centre? IS this good or bad? What will happen to the staff they already have running the M Centre?
Is this PRIVATIZATION of services? Does that mean citizens will not be able to hold the city accountable if there are problems like no entertainment and blowing the budget on what they do offer?? What about booking ice time and all the other things one goes through the city for now? Will they stay the same?

Rosen needs to address these issues BEFORE it all turns to choas and is held up by contract talks with city employees starting in December/January and stalled by cutbacks/downsizing and strike mandates if this turns out to be a bid at privatizing services already provided by municpal employees.

FORCAST: bedlam,chaos, threats, cutbacks, downsizing...

[Bandit]

Some good things in the report. No expensive underground parking garage. I don't see any issue with parking like the Whig does, it was less then 10 minutes to walk from Earl st over. They realize this isn't a big tourist draw. And they still hold out some hope Queen's can be talked too.

But the economic assumptions seem way off. To go from very few entertainment events a year to 50 doesn't seem realistic. Even if acts want to come the poplulation has to buy the tickets. If Sarah Harmer goes from playing 2 nights at The Grand to 1 at the LVEC how does Kingston benefit other then the Grand will lose more money? It looks like they just picked 50 out fo the air to help in the "won't cost taxpayers" line, its a lot more then other cities, and will probably compete with Queen's 2500 seats for some events.

Applying proceeds from the M center property to the LVEC is fine, but it would seem obvious to me if the whole amount goes to the LVEC and the "agricultural society is relocated", that there will be a cost to the relocation and whether the tax payer funds the relocation or the LVEC the effect is the same. If the entire incremental tax gain from developing the property flows to the LVEC, the costs of providing city servise to all those new residences is going to come from existing taxpayers.

It looks good to be able to put down a scenario that has it fully paid for in 10 years, but when no one else has done anything close to that I don't think anyone can take that seriously. The cost is probably too low for "state of the art", and the $5M form government may not materialize. I fail to see the great economic impact. They acknowledge this won't attract tourists who wouldn't be in Kingston anyway, and won't attract people from far enough away to book hotels. 95% of Kingston's bar business is already downtown, I don't think people will spend more because there is an arena, and whatever extra is now spent on tickets will be at the expense of other entertainment options.

[macphail]

Like Bandit, I have some problems with the financial assumptions, and more importantly, what the report doesn't contain.

1. What if the Frontenacs are sold/relocate? How many entertainment nights will have to be booked in order to make up for lost revenues?

2. For the 50 nights of entertainment and the OHL games, is the assumption being made that these events will be sold out?

3. To say that it is walking distance from Queen's is a fair statement; however, few Queen's students would agree with it.

4. What will the impact be on the Grand Theatre?

5. Why were people who reside in the area not consulted about the possibility the LVEC could be located in their backyard? As someone who doesn't live on Rideau Street, the LVEC's proposed location does not affect me directly; however, I completely understand the concerns of those in the immediate vicinity who may have to view this building (and contend with the noise) on a regular basis.

For all the hype, the report would appear to be a spring board for further discussion on the LVEC. As it stands, it is impossible to come to a firm conclussion on the merits of what is being proposed.

Cheers, Derek

[Evelyn King]

Hi Folks:

It has been a pretty angry weekend for the residents of Rideau Street. The big announcement on Friday by the mayor certainly took the area by surprise.

In my view, the report was full of big ideas but not much in fact.

For the past year and a half, the folks in this area have worked hard to achieve traffic calming for Rideau Street. Currently, it is dubbed, the Rideau Raceway. Rideaucrest nursing home is on the street and obviously the mayor does not care about their peace and quiet. There are townhouses, condos and my building that all overlook Wellington Street and the park area. Interesting enough, at the end of Wellington Street sits Rosen Fuels.

This whole deal smells, and as noted in other comments on this site there are too many things that need to be addressed before a firm decision is made.

Does the city not own the land the Memorial Centre sits on?????

Why not build there?????

No matter where the site is located, the taxpayers of this city need to demand that every cent needed is in the bank before the shovel hits the ground. Somehow, I do not believe that we, the taxpayers of this city, will not end up paying somehow.

Shame on the task force for not consulting with the residents of this area and the rest of the community before the announcement was made. And for the mayor to stand up and say it is a done deal is outrageous.

The war is on Harvey!!!!

Best regards,

Evelyn

[Emerald]

what (if anything) should the city expect of the franchise owner?
capital?

[Bandit]

Some of the other newer OHL rinks have had money from the team go into them. However I think this has generally been agreed to when it was still a question if/could/should a new one be built. The way this has proceeded in Kingston, that a new arena is going up no matter what, doesn't leave much incentive for the Frontenacs to make an offer.

Certainly there will have to be a substantial increase in the present $25,000 rent/$1 ticket surchage deal they have now. It looks like the deals vary quite a bit in each city with how rent and the revenue splits from boxes, adveritsing, and concessions work. Hopefully the city won't get snowed with a share the ticket revenue over x attendance deal where x is a higher number then ever attend.

[Plowshares]

(Forgive me if I am treading over old ground!)

A couple of thoughts about the threads I have been browsing through....

1. If the LVEC is located around the downtown, there will be no spin-off business for the downtown businesses and retailers - NONE - just a major load on the already overloaded downtown infrastructure. This project will be a destination use - people will drive there and drive back home after for any of the events. No meandering around for any impulse buying. (Hey but the retailers within the facility will do okay.) Be honest and don't plan for some great influx of dollars into town due to this project. It will be the same dollars that are already here!

2. Any honest analysis should show a realistic number/cost for infrastructure improvements based on recent cost per LF numbers which should be adjusted for inflation whether this project is located downtown or not. Of course, this should also be based on an honest traffic study - volume is the issue not just the number of parking spaces available. Parking spaces in the downtown if they are part of a structured lot should be around $40,000 per space - if someone has a better number, please correct me - they just add to the cost. Increased traffic volume leans in on the infrastructure. More surface parking ('burbs) reduces the cost.
Just be honest and show real infrastructure numbers/cost for the different locations under consideration. Downtown should cost a whole lot more and a suburban location should be less. Let's do the numbers! The location is not that important since everyone is driving there! (Large Vehicle Enertainment Center?!)

3. Be honest about land acquisition costs. Land is *****er in the 'burbs but you may have to put some of the infrastructure in. *****er though than upgrading existing infrastructure and screwing up all the business in the Downtown Core. What is the cost of a major downtown construction project on the business community? Big!

4. Be honest about the revenues. THIS THING WILL LOSE MONEY - construction cost overruns and revenue shortfalls will determine how much. (Oh, I guess everyone assumed that there would be no change orders and this time will come in at or below the budget!) Revenue projections are always too rosy to get these projects passed by the sleeping electorate. The hockey teams will only be able to pay so much - just because there is a "first class" entertainment facility and booking management team isn't going to bring the Rolling Stones to town. I know Kingston is off-Broadway but...

Here is a simple financial benchmark to look at this LVEC with: cash on cost return. This is how real estate developers look at deals in the rough.
Take the total project costs - hard costs (sticks and bricks) + soft costs ( consultant's fees, architectural engineering fees) divided by the project's annual income. Again, be honest and include all costs that would not be there "but for" the project itself - like infrastructure or environmental cleanup. Don't pretend we would have done the infrastructure anyway!

So, someone do the math for the different locations and post it here. The number should be equivalent to a risk-reward % return. For real estate deals, my firm looks for between 12% and 15%. The City's capital comes from YOUR tax revenues so see how it is being spent and think about whether you would want to do this deal with your money. If you have to do this project because too many people WANT it, just pick the alternative that loses the least amount of money.

(Remember how .com stocks had goofy valuations - look at revenues not at profits? Don't get fooled again - just be rational and look at these alternatives to see each one's relative financial performance.)

By the way, are there any Federal Grants available for this project or available for re-habbing the Memorial Center? I am assuming this has been investigated.

This LVEC is not like a highway that everybody uses or a bridge. This "entertainment" center is a facility that provides benefits for some sectors of the community - if they can afford the ticket prices and parking. Let's get all the hockey families to show up and talk about how we all NEED this new facility. It really is a WANT in many respects. Can we really book a major regional act and fill the place? How can Kingston compete with Toronto? No way! Sure, the pundits say "It will make money!" and what happens when those revenues are down 20% from the projections? UP GO THE TAXES AND NO ONE WILL COMPLAIN SINCE IT WILL BE BURIED IN THE MIDST OF THE CITY'S BUDGET!

Sumary:
CHOOSE WISELY (RATIONALLY) AND BE SCEPTICAL ABOUT THIS NOT-SO-GREAT USE OF PUBLIC FUNDS. IF YOU WANT A NEW HOCKEY ARENA AND WANT OTHER PEOPLE TO PAY FOR IT, SAY SO! (That's the problem with public money - it is everyone's and no one's at the same time. What if it was your money!)

Just build something to meet the need now and for 10 years and provide some room for expansion both in the building design and in the adjacent land. It doesn't really matter where it is - just choose the *****est alternative with the same specs.

Final Suggestion:
If the City wants to be really honest, keep track of the project related expenses and income separately within the budget to prove this out and see who is right/closest to the rosy projections. This might be too revealing though 'cause this facility is going to LOSE BIG MONEY which the City of Kingston taxpayers are going to have to absorb since the adminstration will have changed. Get ready for some finger pointing!

My 2 cents.

Cheers,
Chris