Global venue player bails on HECFI privatization bid
In a surprise move on the eve of a special HECFI privatization meeting, the world’s largest venue management company and its partner have withdrawn their bid to run Copps Coliseum.
Los Angeles-based Anschutz Entertainment Group (AEG) and Edmonton-based Katz Group notified the city Monday that they are no longer taking part in the privatization talks.
Katz spokesperson Patrick LaForge said the partners came to the decision while putting the finishing touches on the proposal they were planning to present to city councillors along with those from other bidders Wednesday.
LaForge said they weren’t comfortable with the operating numbers they were receiving for Copps Coliseum.
“It puts all the risk on our back. And the numbers we got, we just didn’t have faith in.”
“I think we wanted accuracy and we wanted reliability.”
Declining to go into detail, LaForge said he wasn’t pointing a finger at the city but that the process just didn’t work for them.
“The process has to work for you, otherwise you’re like a dog chasing a car: What do you do when you get it?”
Councillor Sam Merulla, a driving force behind the privatization option and member of the interim HECFI board, said he was sad to see AEG/Katz drop out.
“But if they didn’t want to meet what the objective of the process is — to eliminate and/or mitigate the subsidies — then obviously they’re not welcome in the process.”
Taxpayer subsidies to HECFI are pegged at about $6.5 million for 2012, but most years they average $7.5 million to $8 million.
AEG/Katz’s withdrawal leaves four other proposals on the table for running the three city-owned HECFI facilities — Copps, Hamilton Place and Hamilton Convention Centre.
In a related development, Sonic Unyon, a local music and arts company that originally bid on running Hamilton Place, is now partnering with SMG and Forum Equity, who are interested in operating all three facilities.
SMG globally manages 77 arenas, 54 theatres and 68 convention centres, including two NHL arenas. Forum Equity is a Toronto based development firm.
The other three bidders are:
Global Spectrum, which manages 40 arenas, 13 stadiums and 32 convention centres around the world, and its partnering bidder, Live Nation, one of the world’s largest concert promoters. They’re interested in managing all of HECFI.
Hamilton-based Carmen’s Group, which is interested in taking over the convention centre.
And the current HECFI management team, which suggests dissolving HECFI and bringing the facilities under the city’s direct control through the planning and economic development department.
All four players will get a chance to pitch their ideas to councillors Wednesday.
City treasurer Tony Tollis, the city’s pointman on the process, said his quick reading of the latest proposals suggests subsidy reductions have been somewhat sweetened since the original submissions.
“There’s definitely more there than there was before.” But “nothing jumps off the page” as a clear-cut winner.
“A lot of it will depend on where council wants to go inevitably.”
Tollis says the presentations will be a high-level opportunity for the proponents to promote themselves and councillors to ask questions. He expects to come back with a detailed report on the options and the financial implications by mid-August.
Meanwhile, LaForge says AEG/Katz is leaving the door open for further discussions if things don’t work out for the city.