Confusion over how much HECFI handover will save
Councillors defer making decision on agreement
Hamilton councillors have deferred changing the terms of a deal with Carmen's Inc. to run the Hamilton Convention Centre because of confusion over how much the company will save the city in the first year.
When Carmen's bid last year to take over the convention centre, it said it could save the city $1 million in the first year. But city treasurer Tony Tollis told councillors at a meeting Wednesday that the full savings won't happen in 2013.
There was confusion around the table about what exactly that meant. Councillors faced a motion to allow Carmen's to apply for up to $663,000 "for any losses" during 2013, which would be considered its transition year.
They also faced a motion to allow Global Spectrum — which will take over Copps Coliseum and Hamilton Place — to apply for up to $110,000 for the same reason.
But councillors, confused by the wording, deferred the decision until Feb. 6.
"I don't feel comfortable voting on this," said Coun. Lloyd Ferguson.
The city put out a call for bidders last year to take over management of the three Hamilton Entertainment and Convention Facilities Inc. (HECFI) properties. Carmen's won the bid to run the convention centre, and will present a plan for a multi-faceted downtown entertainment facility on Feb. 6. Global Spectrum partnered with Live Nation to bid on the other two properties.
Tollis told councillors on Wednesday that the $1-million estimate was actually the savings predicted by Global Spectrum and Carmen's combined. The Carmen's savings would equal $900,000 per year.
One thing was clear: Carmen's will not end up saving the city what it thought it would. The reason for this, Tollis said, is a downward trend in the convention centre industry, and the fact that Carmen's will only operate the convention centre for part of 2013.
"They're saying they'll give us savings of $663,000 and not $900,000," Tollis told councillors. "What they're saying is they can't give us all those savings because they're going to end up generating a loss because of lack of revenue."
Carmen's and Global Spectrum are scheduled to take over the properties on April 1. The sooner council can sign an agreement, the better, Tollis said.
"There's staff in these facilities who are holding on, who are looking for closure one way or another," he said. "We're trying to expedite this for them more than anything else. Yes, there's a financial implication here, but the implication to a lot of employees is significant."
Also at Wednesday's council meeting, council voted to disband its gaming facility subcommittee.
The issue of a potential casino is so important that it should be dealt with all councillors at general issues committee meetings, Coun. Terry Whitehead said.
The mandate of the subcommittee has been completed anyway, said Mayor Bob Bratina.
"The mandate was to pull the conditions together that the city would want in terms of proponents for a casino," he said. "The work of the committee is done."