Rink plan partner a risk, city warned
By AMY PUGSLEY FRASER City Hall Reporter
Mon. Feb 2 - 5:23 AM
Halifax taxpayers could be on the hook for millions if city hall doesn’t nail down an airtight agreement for Bedford West’s new four-rink complex, says the provincial head of CUPE.
The union that represents 16,000 workers in this province is worried about the track record of Nustadia Developments Inc.
They are one of the companies in the Halifax Sports Partners Inc. consortium awarded the nearly $32-million project by regional council last week.
CUPE president Danny Cavanagh says the company built a complex in Guelph, Ont., and left the city holding a $9 million loan and an additional $4 million in unanticipated debt.
"We’re also a bit nervous about some of the stuff that happened with arenas and sports facilities in other provinces," Mr. Cavanagh said in an interview Sunday.
"Because there are no guarantees."
The risk of financing in today’s economic climate is "very dangerous," he says.
As a result, "there have been several private companies that have walked away from different P3 (public-private-partnership) arrangements."
CUPE has been worried city hall would decide to go this route for the four-plex arena and tried to warn them last year, he says.
"We provided HRM council with a research report that we did that shows that P3 arenas and rec centres are fraught with financial risks to taxpayers."
"We still, we feel, have an obligation to make sure that we hold governments accountable and make sure that taxpayers are getting the best bang for their buck."
That report should have raised red flags for them, he says.
"I think often times what a lot of people don’t see is that there is only one taxpayer. And that’s us."
"And clearly, with all the research we’ve done . . . it shows that taxpayers are at risk more and more and more."
A regional councillor said last week that many of those concerns were raised at a closed-door meeting.
But none of those worries were mentioned in public, on the record, after councillors unanimously agreed to go with Halifax Sports Partners Inc.
However, Mayor Peter Kelly admitted Sunday night that the city knows about Nustadia’s track record.
"We’re aware of other contracts and some of the challenges that came with those," he said in an interview, mentioning Guelph’s arena as well as the four-plex in Moncton as examples.
As a result, Halifax will learn from those experiences and do its due diligence with the pending agreement, he says.
"We’re trying to be proactive and trying to ensure that we do get the best value for the taxpayers’ dollars, as we always try to do."
City staffers are entering into three-month negotiations to set the parameters for the design, build and operation phases of the arena off the Hammonds Plains Road — which the city will own.
But nothing is set in stone yet, he pointed out.
"There are others who put proposals in so if, by chance, something doesn’t come to pass, there are other options open to us. But right now we’re committed to moving forward which is extremely important to all of HRM."
If all goes well, construction on the project — behind the RIM building on Gary Martin Drive — should begin this spring with completion in the fall of 2010.
"At the end of the day, we’re trying to get the facility built — and operated — in the most cost-effective way," Mr. Kelly said.