Newfoundland Growlers owner says city didn't take Mile One deal seriously
City says countless volunteer hours went into proposal, which did not eliminate subsidy
The Newfoundland Growlers won the Kelly Cup last season, but failed to turn a profit.
That's the reality of being a sports franchise in this province, says owner Dean MacDonald, unless he can take control of Mile One Centre away from the City of St. John's.
On Tuesday, the city said it was ditching an agreement to explore the possibility of the Growlers and Edge running the arena and convention centre.
"You would think they'd say, 'Look, the only two things we've got going for us now is the two sports teams because we actually make money from them,'" MacDonald said. "But they're doing an awfully good job of trying to drive us away."
The city ended the memorandum of understanding because the owners of the Growlers and the St. John's Edge submitted a proposal that included a subsidy from the city's taxpayers.
But MacDonald said the document they submitted could barely be considered a proposal, since they couldn't get enough information from the city on "basic things" like food and drink sales from this season.
"We didn't make a proposal. We said, "Look, if you're not going to give us the information, this is the best we can say.' They weren't serious. Let's be honest. Not even close to serious."
The subsidy to St. John's Sports and Entertainment — the group that controls Mile One and the St. John's Convention Centre — has long been a contentious issue.
At the beginning of this sports season, it was estimated to be about $1.8 million.
MacDonald said the Growlers and Edge have knocked about $800,000 off the subsidy by returning revenue to the city from things like concession sales.
He said the owners included it in their proposal because they didn't have enough information to put forward anything other than the status quo.
City councillor Sandy Hickman, who chairs the SJSE board, said countless volunteer hours went into examining the proposal. He said the board "gave a lot of information to [the owners] so that they could do some due diligence to prepare their proposal."
Hickman said the proposal did not meet the requirements, mainly due to the annual operating subsidy being unchanged.
Lease agreements not optimal
Both teams will now have to work out leases to use the arena, rather than take it over outright.
The Growlers and the Edge struggled to reach lease agreements with the city at the start of their inaugural seasons. MacDonald said his lease was the reason they didn't make money, because so much revenue had to be handed back to the city.
Both MacDonald and Edge owner Irwin Simon want to bring more concerts and events to the city to offset any losses by their teams, since running professional sports franchises on an isolated island is an expensive and risky venture.
They believe they can do it more efficiently than the city can, and thus make more money.
MacDonald said he's now considering taking legal action against the city, to force them to disclose more information.
He said he's "probably not" interested in buying the arena outright anymore, despite him saying he would like to explore the idea in October.
The city hired KPMG Canada to look into the feasibility of selling the arena and the convention centre. Mayor Danny Breen says no actual valuation of the building was ever done and nobody ever made an offer.