City Council agreed last night to look into turning the Essar Centre over to a private management company, with Ward 3 Councillor Matthew Shoemaker warning the decision could be interpreted as "blatant electioneering."
With only Ward 6 Councillor Joe Krmpotich opposed, council approved a resolution from Ward 2 wardmates Susan Myers and Sandra Hollingsworth instructing city staff to look into private management of the 11-year-old downtown landmark.
While voting in favour of the resolution, Councillor Shoemaker tried unsuccessfully to have it changed to include the McMeeken and John Rhodes facilities, also asking that privatization take place only after this fall's municipal election slated for Monday, Oct. 22.
Shoemaker pointed out that one year ago, council had voted down his attempt to privatize arena operations at the McMeeken Centre.
At that time, Councillor Myers stated she was "philosophically opposed" to private operators making money off a taxpayer facility.
"I'm not sure what's changed since February 2017," Shoemaker said at last night's council meeting.
"I think the timeline opens up those who have moved it and seconded it to criticism that this is blatant electioneering. So I ask that it come back after the election," he said.
Myers presented information about six years of fiscal losses at the Essar Centre, with an even larger loss expected this year:
- $572,280 loss in 2012
- $427,187 loss in 2013
- $345,923 loss in 2014
- $366,190 loss in 2015
- $476,348 loss in 2016
- $589,008 loss in 2017
- $626,890 projected loss in 2018
Like Shoemaker, Mayor Christian Provenzano felt any privatization proposal should be considered after the October election.
"I don't think the timing is entirely right," the mayor said.
"We wouldn't get this report back until late year, where we wouldn't really be in a position to make a decision on it. It would really be the next mayor and councillors that would make a decision."
"I frankly think it's unlikely we'll have a private-sector operator that would want to come in and take this facility."
Provenzano said he'd sooner have city staff focus this year on reducing losses.
If they're unable to accomplish that, the mayor said he'd fully support looking at private-sector management in 2019.
But Myers insisted the current council won't be political lame ducks until the month of the election.
Still, she said she's not interested only in privatization, only in stopping the Essar Centre's hemorraghing.
Myers said much of the information council needs can be found by brushing off a secret report about retaining a third-party manager prepared for the city in 2014 by PricewaterhouseCoopers.
"It's time now to bring that research forward to this council, updated with the information, and report back not only to City Council but to the community at large," Myers said.
"In my view we have a hemorraghing that must be addressed and all options have to be on the table."
Ward 1 Councillor Paul Christian said the Essar Centre is used only about 50 days a year but he warned annual losses may be inevitable.
"It sits idle the rest of the time," Christian said. "We can't be overly optimistic. We do have a limited market. We have an aging population. We have many people on fixed incomes."
"We're a small market. A lot of these arenas don't make money. You can hire marketing people and you can throw stuff out there, but there's only so many dollars to spend."
Instead, Christian said, it might be necessary to look at contracts with current Essar Centre tenants, looking for more equitable arrangements.
Ward 1's Steve Butland cautioned about private-sector operators: "Remember they are there for a profit."
What if local service groups are forced to increase user fees, Butland asked.
Ward 6 Councillor Joe Krmpotich said he opposes privatization and asked about potential job losses at the Essar Centre.
Here's how your councillors voted on the Myers/Hollingsworth resolution:
- Steve Butland - for
- Susan Myers - for
- Marchy Bruni - for
- Rick Niro - for
- Matthew Shoemaker - for
- Ozzie Grandinetti - for
- Sandra Hollingsworth - for
- Judy Hupponen - for
- Joe Krympotich - against
- Paul Christian - for
- Frank Fata - for
- Lou Turco - for
- Christian Provenzano - for