Hamilton Fact Check: Dissecting RockHammer's casino claims

CBC Hamilton analyzes some of the claims RockHammer Inc. made in announcing its plans for a $200-million downtown casino complex.
P.J. Mercanti, co-owner of Carmen's Group, announces a proposal for a $200-million entertainment complex in downtown Hamilton. (Cory Ruf/CBC)

Speaking at glitzy invite-only event at a Hess Village nightclub, a group of local investors called RockHammer Inc. announced its plans on Monday to build a $200-million casino complex in the heart of downtown Hamilton.

The group's directors spoke about the development, which they said would include a Hard Rock Café-themed luxury hotel, several bars and restaurants, a live music venue and a museum celebrating Canadian music.

"It will become one of the marquee entertainment districts in Ontario and will welcome people from all over the province and conventioneers from all over the country and around the world," said P.J. Mercanti, co-director of RockHammer and a co-owner of Carmen's Group.

Armed with a PowerPoint presentation and numerous facts and figures, he and his associates spoke at length about how the project represented a "game-changer" for downtown Hamilton. They also addressed the arguments of those who oppose bringing a casino to the city's downtown core.

CBC Hamilton took a look at a few of RockHammer's claims, aiming to separate the spin from fact.

RELATED LINK: Group announces plan for dowtown Hamilton casino

Economic benefits

The claim: RockHammer heads P.J. Mercanti and Nick Bontis outlined the blockbuster economic benefits they say the hotel-casino would bring to Hamilton. The complex would yield 1,200 permanent jobs that would pay an average of $49,000 per year each, they said. By using locally-sourced suppliers, the development would infuse $15-million into the local economy.

Analysis: Without a detailed proposal on the table, it's difficult to assess how big an economic bang a downtown casino would wreak. However, according to economist Atif Kubursi, RockHammer's jobs claim is a valid one.

"It's not far-fetched," said Kubursi, an McMaster professor emeritus whose company Econometric Research Ltd. has worked on more than 200 case studies on how casinos affect local economies. "It's a labour-intensive activity."

And on the issue of whether the project would create $15 million in new business for local supplied, that too is a sound assertion, Kubursi said.

"To say that they will spend $15 million, I don't think it is an exaggeration," he explained, adding that casinos spend a lot of money to keep their facilities stocked and attractive.

Proponents have a vested interest in exaggerating the numbers.

There is a major catch, though.

"Typically my beef with this is that in any [discussion of] economic impacts, there is a tendency to exaggerate the economic benefits," Kubursi said. One must take into account "cross impacts" or "net" effects of any development, he said.

He gave the example of Flamboro Downs, which employs 1,000 people and may close entirely if a casino were to go downtown. Also, a casino would take away consumer dollars from other local sources of entertainment, he said. 

"Proponents have a vested interest in exaggerating the numbers."

Partnership with Mission Services

The claim: In his speech, Mercanti addressed the issue of gambling addiction, promising that RockHammer would "do more for problem gamblers than any other responsible, community-oriented proponents would ever do." 

Should the casino be constructed, he said, his consortium would partner with Mission Services, a social service organization that lists addictions counseling as one of its services.

"I am proud to announce that Mission Services have corresponded with RockHammer directly to fill this important role in our strategic plan," Mercanti told the audience.

Analysis: Speaking with CBC Hamilton on Tuesday, Barry Coe, director of community relations with Mission Services, said his organization hadn't forged any partnership with RockHammer.

He confirmed that Mercanti had reached out to Mission Services last week, but didn't speak to management, who were away at a conference.

"[Mercanti] did make exploratory calls to our addiction department," Coe said. "I was impressed with the fact that our [addictions] program attracted his attention."

Coe said that officials from RockHammer and Mission Services have agreed to meet on Thursday to discuss a possible partnership.

Mission Services has no official position on a downtown casino, he noted.

"As a Christian mission, we're in the mercy business, not the judgment business."

Support of downtown businesses

The claim: Near the event's conclusion, Peter Mercanti, P.J.'s father, fielded a question about whether downtowners actually support a casino in their neighbourhood. To dispute the claim that downtown businesses oppose a gaming facility, he spoke of a recent fact-finding mission he made in the city's core.

"I went downtown and started on James and Barton Street and walked up," he recalled.

"It was a Monday and a lot of businesses were closed. But overwhelmingly, the ones that I visited all said, "Yes, we would love to have employment downtown, more business downtown, and they gladly signed on and supported."

Analysis: CBC Hamilton spoke to a couple of the business owners who Mercanti said expressed their support.

"I think any development would benefit everyone," said Terry Terpoy, owner of Lo Presti's at Maxwell's, a restaurant on Jackson Street East.

"We support any opportunity for people to come downtown," said Troy Thompson, who runs a jewelry store and pawnbroker on King East.

Despite their endorsements — and Mercanti's colourful anecdotes — it's doubtful that downtown business owners are "overwhelmingly" supportive of a casino.

Several entrepreneurs been very vocal in their opposition. (Bearing the logos of 22 downtown business, an full-page anti-casino ad appeared in the Hamilton Spectator on Tuesday.)

But others may be taking a wait-and-see approach, reserving their judgment for a later date.

Case in point: In January, the Downtown Business Improvement Area polled its members to ask whether they supported a downtown casino. Of the 164 property owners and 427 businesses it represents, only 79 responded. Of those, 55 per cent said they were in opposed to a downtown casino, while 33 per cent said they were in favour.

Twelve per cent said they were neutral or had no opinion.