macphail
10-01-2004, 09:18 AM
Former arena developer to manage centre proposal
By Derek Baldwin
Friday, October 01, 2004 - 07:00
Local News - A Thornhill businessman with a flair for pooling private and public money to build arenas has been named project manager for Kingston’s proposed riverfront rink.
Yesterday, city officials called Don Gedge a “leader in negotiating private-public partnerships or P3s.”
Union leaders warned yesterday the hiring of a P3 proponent as the project manager could prejudice the process.
An economics graduate of Royal Military College, Gedge is no stranger to Kingston. In the late 1990s, he vied to build two separate private partnership projects in the city.
Gedge’s failed bids were a multi-pad arena at Queen’s University and a combined arts/convention/sports centre for Block D.
He has since helped finance and design roughly a half-dozen P3 sports centres across the continent.
Gedge will report this morning for the first day of his three-year contract. This afternoon, he will address a news conference at City Hall.
In an interview, Mayor Harvey Rosen said Gedge’s hiring doesn’t mean the city has ruled out constructing its own municipally financed arena and entertainment centre in the downtown.
“I think it’s open-ended,” he said.
But there’s the possibility city council could decide on an arena partially financed by the business sector, Rosen said.
“That would certainly change the financing perspective of the deal if it went to a P3 deal. It may be better for the community, I don’t know. We’ll have to take a look at it.”
Rosen pointed out that the mayor’s task force report in April recommended that review of a new arena should explore a municipal-private partnership.
The task force recommended that the “city should immediately begin the hunt for an experienced facility management firm.”
The task force said recently the cost to build an arena could range between $18 million and $54 million.
Rosen said if city council ultimately chooses to acquire a private partner for the arena, some of the capital expenses would be offset.
“If we could get a private partner,” said Rosen, “who wishes to take an equity position, it would reduce the city’s capital requirements in terms of the project.”
Earlier this year, sports consortiums affiliated with the Toronto Maple Leafs and the Ottawa Senators of the National Hockey League expressed preliminary interest in the proposed 80,000-square-foot arena on Anglin Bay on Kingston’s Inner Harbour.
Entering a contract with an entertainment consortium, says the Canadian Union of Public Employees, could lead to financial ruin for the project and millions of Kingston taxpayers’ dollars being wasted.
Sid Ryan, president of CUPE Ontario, said from Sudbury yesterday the threat is real if arena meltdowns in other communities are any indication.
“What I would say to Kingston taxpayers is they should beware of P3 con artists, they are snake-oil salesmen who come into your community, tell you they can give you all these sports arenas and there won’t be any pain involved,” Ryan said. “Everywhere we looked, the taxpayers are on the hook. Auditors general across Canada and the U.K. say these are a rip off of taxpayers.”
In a telephone interview last night, Gedge told The Whig-Standard that it’s too early to speculate which direction Kingston will take to build its new rink and entertainment centre.
Gedge agrees that some P3 projects were plagued with financial and political problems.
“[Ryan’s] right. They haven’t been that successful,” Gedge said. “But it’s been the private-sector people who have been losing the money, not the cities.”
Gedge noted that money-losing P3 arenas were built years ago when the process of melding government and private money was relatively new. Things have changed for the better, he said.
“The key thing is to understand the P3s that have been done and understand where the problems were. If we’re going to structure one, we should do it in a way that works. We have other people’s experiences to draw on, good, bad, or indifferent,” Gedge said. “A huge part of the risk is being managed now because you understand what happened.”
He pointed to Oshawa as a municipality that is taking that approach.
Gedge said he was commissioned by Oshawa city officials to come up with a model showing what it would take for the city “to build an arena entirely on its own.”
Oshawa has now called for requests for proposals from three private consortiums that have expressed interest in teaming with the city to build the arena. All three proposals will be compared to Gedge’s public model.
Gedge said that is the process he will likely suggest to the Kingston arena steering committee.
“We can extract from that to see what’s best for Kingston,” he said. “In that case what we will be doing is following what they’re [Oshawa] doing to see how that’s evolving. Rather than re-invent the wheel, we’ll learn from others.”
Gedge’s former company, Lauridon Sports Management, was a partner in the 4,200-seat Sarnia arena that opened in 1999 and is reporting sell-out Ontario Hockey League games, he said.
He also was involved in a 3,000-seat arena in Bosman, Mont., a 4,000-seat arena in Elmira, N.Y., and with a 9,000-seat downtown arena in London, Ont.
Gedge helped with the finance and design models for the $46.2-million John Labatt Centre in London.
By all accounts, the centre is thriving since it opened last year, he said.
In that case, the city of London invested $31.7 million to match $9.5 million from private investors. Senior governments approved an infrastructure grant of $5 million.
“If we were going to do a P3 here, we would be looking for something like London has done,” Gedge said.
He argued that the municipality was essentially only on the hook for roughly 75 per cent of the risk involved in the project with private investors assuming most of the remainder.
“So, if the whole thing collapses [in London] there’s at least $9.5 million left on the table for the city,” he said.
“If the private sector wasn’t there, the city would have to deal with the full pop. The city could have the whole risk.”
At this stage in the proposed arena process, Gedge said he will emphasize to the arena steering committee that there can’t be enough public consultation.
People with a stake in the outcome must be allowed to provide their opinions to keep lines of communication open. A stakeholder group will be formed to hear comments, he said.
Gedge said there appears to be some confusion, for example, within Kingston that the proposed arena is for elitist events only.
Contrary to fears that only Kingston Frontenacs upper-tier hockey and concerts will be played in the arena, Gedge said the centre would welcome the community, especially minor sports.
“We have 365 days of the year and 80 to 100 days of events, so the rest of the time we will have hockey groups in there,” he said. “There will be minor hockey and figure skating using the facility when it’s not being used for concerts or major junior A hockey.”
“We have to make sure this will meet the needs of all the stakeholders,” he said.
CUPE’s Ryan said his union will work with Local 109 in Kingston to fight any P3 arena proposed for the city.
“We’re going to run a campaign and expose these P3s in Kingston,” he said.
Private arenas kill higher-paying municipal jobs and replace them with minimum-wage workers, he said.
CUPE has penned a 32-page report outlining eight examples of municipalities across Canada joining hands with private sports consortiums.
In most cases, save the John Labatt Centre in London, CUPE claimed the municipal-private sector partnerships – often referred to as the third way – don’t work.
“Every community that has tried one has been either left holding the can themselves or they’re paying through the nose through higher taxes for so-called P3s. There is no economic benefit to taxpayers,” he said.
The bottom line behind municipalities agreeing to a private-public partnership, he claimed, is to keep the full price of a new arena off its debt list.
“All of that is being done so that they won’t have to show the debt on the books,” Ryan said. “It’s madness.”
He said the move to hire Gedge is a clear indication Kingston is ramping up to build a P3 arena.
“It’s clear they are being disingenuous. They’re pulling the wool over taxpayers’ eyes. When you’re holding a public consultation process, you don’t go out and hire a person who will bring bias to the process. If he’s a P3 leader, what’s he doing in a city that hasn’t made up its mind which way it wants to go?” he asked.
Ryan called Gedge a “hired gun ... who needs to be run out of town.”
Rosen dismissed the claims as those made by a union president who is just doing his job.
By Derek Baldwin
Friday, October 01, 2004 - 07:00
Local News - A Thornhill businessman with a flair for pooling private and public money to build arenas has been named project manager for Kingston’s proposed riverfront rink.
Yesterday, city officials called Don Gedge a “leader in negotiating private-public partnerships or P3s.”
Union leaders warned yesterday the hiring of a P3 proponent as the project manager could prejudice the process.
An economics graduate of Royal Military College, Gedge is no stranger to Kingston. In the late 1990s, he vied to build two separate private partnership projects in the city.
Gedge’s failed bids were a multi-pad arena at Queen’s University and a combined arts/convention/sports centre for Block D.
He has since helped finance and design roughly a half-dozen P3 sports centres across the continent.
Gedge will report this morning for the first day of his three-year contract. This afternoon, he will address a news conference at City Hall.
In an interview, Mayor Harvey Rosen said Gedge’s hiring doesn’t mean the city has ruled out constructing its own municipally financed arena and entertainment centre in the downtown.
“I think it’s open-ended,” he said.
But there’s the possibility city council could decide on an arena partially financed by the business sector, Rosen said.
“That would certainly change the financing perspective of the deal if it went to a P3 deal. It may be better for the community, I don’t know. We’ll have to take a look at it.”
Rosen pointed out that the mayor’s task force report in April recommended that review of a new arena should explore a municipal-private partnership.
The task force recommended that the “city should immediately begin the hunt for an experienced facility management firm.”
The task force said recently the cost to build an arena could range between $18 million and $54 million.
Rosen said if city council ultimately chooses to acquire a private partner for the arena, some of the capital expenses would be offset.
“If we could get a private partner,” said Rosen, “who wishes to take an equity position, it would reduce the city’s capital requirements in terms of the project.”
Earlier this year, sports consortiums affiliated with the Toronto Maple Leafs and the Ottawa Senators of the National Hockey League expressed preliminary interest in the proposed 80,000-square-foot arena on Anglin Bay on Kingston’s Inner Harbour.
Entering a contract with an entertainment consortium, says the Canadian Union of Public Employees, could lead to financial ruin for the project and millions of Kingston taxpayers’ dollars being wasted.
Sid Ryan, president of CUPE Ontario, said from Sudbury yesterday the threat is real if arena meltdowns in other communities are any indication.
“What I would say to Kingston taxpayers is they should beware of P3 con artists, they are snake-oil salesmen who come into your community, tell you they can give you all these sports arenas and there won’t be any pain involved,” Ryan said. “Everywhere we looked, the taxpayers are on the hook. Auditors general across Canada and the U.K. say these are a rip off of taxpayers.”
In a telephone interview last night, Gedge told The Whig-Standard that it’s too early to speculate which direction Kingston will take to build its new rink and entertainment centre.
Gedge agrees that some P3 projects were plagued with financial and political problems.
“[Ryan’s] right. They haven’t been that successful,” Gedge said. “But it’s been the private-sector people who have been losing the money, not the cities.”
Gedge noted that money-losing P3 arenas were built years ago when the process of melding government and private money was relatively new. Things have changed for the better, he said.
“The key thing is to understand the P3s that have been done and understand where the problems were. If we’re going to structure one, we should do it in a way that works. We have other people’s experiences to draw on, good, bad, or indifferent,” Gedge said. “A huge part of the risk is being managed now because you understand what happened.”
He pointed to Oshawa as a municipality that is taking that approach.
Gedge said he was commissioned by Oshawa city officials to come up with a model showing what it would take for the city “to build an arena entirely on its own.”
Oshawa has now called for requests for proposals from three private consortiums that have expressed interest in teaming with the city to build the arena. All three proposals will be compared to Gedge’s public model.
Gedge said that is the process he will likely suggest to the Kingston arena steering committee.
“We can extract from that to see what’s best for Kingston,” he said. “In that case what we will be doing is following what they’re [Oshawa] doing to see how that’s evolving. Rather than re-invent the wheel, we’ll learn from others.”
Gedge’s former company, Lauridon Sports Management, was a partner in the 4,200-seat Sarnia arena that opened in 1999 and is reporting sell-out Ontario Hockey League games, he said.
He also was involved in a 3,000-seat arena in Bosman, Mont., a 4,000-seat arena in Elmira, N.Y., and with a 9,000-seat downtown arena in London, Ont.
Gedge helped with the finance and design models for the $46.2-million John Labatt Centre in London.
By all accounts, the centre is thriving since it opened last year, he said.
In that case, the city of London invested $31.7 million to match $9.5 million from private investors. Senior governments approved an infrastructure grant of $5 million.
“If we were going to do a P3 here, we would be looking for something like London has done,” Gedge said.
He argued that the municipality was essentially only on the hook for roughly 75 per cent of the risk involved in the project with private investors assuming most of the remainder.
“So, if the whole thing collapses [in London] there’s at least $9.5 million left on the table for the city,” he said.
“If the private sector wasn’t there, the city would have to deal with the full pop. The city could have the whole risk.”
At this stage in the proposed arena process, Gedge said he will emphasize to the arena steering committee that there can’t be enough public consultation.
People with a stake in the outcome must be allowed to provide their opinions to keep lines of communication open. A stakeholder group will be formed to hear comments, he said.
Gedge said there appears to be some confusion, for example, within Kingston that the proposed arena is for elitist events only.
Contrary to fears that only Kingston Frontenacs upper-tier hockey and concerts will be played in the arena, Gedge said the centre would welcome the community, especially minor sports.
“We have 365 days of the year and 80 to 100 days of events, so the rest of the time we will have hockey groups in there,” he said. “There will be minor hockey and figure skating using the facility when it’s not being used for concerts or major junior A hockey.”
“We have to make sure this will meet the needs of all the stakeholders,” he said.
CUPE’s Ryan said his union will work with Local 109 in Kingston to fight any P3 arena proposed for the city.
“We’re going to run a campaign and expose these P3s in Kingston,” he said.
Private arenas kill higher-paying municipal jobs and replace them with minimum-wage workers, he said.
CUPE has penned a 32-page report outlining eight examples of municipalities across Canada joining hands with private sports consortiums.
In most cases, save the John Labatt Centre in London, CUPE claimed the municipal-private sector partnerships – often referred to as the third way – don’t work.
“Every community that has tried one has been either left holding the can themselves or they’re paying through the nose through higher taxes for so-called P3s. There is no economic benefit to taxpayers,” he said.
The bottom line behind municipalities agreeing to a private-public partnership, he claimed, is to keep the full price of a new arena off its debt list.
“All of that is being done so that they won’t have to show the debt on the books,” Ryan said. “It’s madness.”
He said the move to hire Gedge is a clear indication Kingston is ramping up to build a P3 arena.
“It’s clear they are being disingenuous. They’re pulling the wool over taxpayers’ eyes. When you’re holding a public consultation process, you don’t go out and hire a person who will bring bias to the process. If he’s a P3 leader, what’s he doing in a city that hasn’t made up its mind which way it wants to go?” he asked.
Ryan called Gedge a “hired gun ... who needs to be run out of town.”
Rosen dismissed the claims as those made by a union president who is just doing his job.