Conventional Wisdom?

Posted October 26, 2010

After considerable study by both subject matter experts and provincial officials, a proposal has been made for a new convention center which will cost $159 million of borrowed money. The proposal has now been supported by the provincial government and forwarded to HRM for its response.

It is clear that a new convention center would be good for the city and the province. That does not necessarily mean that the proposed cost to taxpayers is reasonable nor that the deal is well structured.

Three questions merit further consideration.

1)Why does the province not have ownership of the convention center as a result of the transaction? In the proposed arrangement taxpayers fully fund the cost of the building over 25 years, but at the end of that period the developer owns it.The Deloitte report mentions by way of explanation that the developer owns the land. This can hardly be an insurmountable obstacle; condominium arrangements that include a variety of users—commercial, retail, and residential—are commonplace. Minister Estabrooks’ response to this question on CBC Mainstreet was remarkably unpersuasive.

2)Why should the borrowing be done by the developer rather than the province? This adds cost because the developer’s rate of interest will be higher than that for the province. On Oct 25 the province can borrow money for 25 years at about 4.25%. The cost for the developer to borrow would be perhaps 1% higher, which adds $1.6 million to the annual cost for no apparent value in return.  The Minister’s answer to this question was equally unpersuasive.

3)Why does the case for support include reference to the associated elements? The project includes proposed office, hotel, and retail elements. These are all good ideas and will no doubt benefit from the relationship to the convention center. But why does it make sense to include the proposed tax revenues from them in the case for the convention center? There are many office and hotel projects being considered in the downtown core—will each one of  them provide a cause for government largesse?

In fact what is lacking from the many public reports by experts is a simple balance sheet showing the cost to taxpayers in comparison with the benefits which cabinet felt would justify them. It is to be hoped that cabinet insisted on such a report as part of its deliberations. It should be made public. HRM council will need a similar report.

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    Honey | July 9, 2011

  • I’d like to pick up on Jonathan Hall’s comments from the “We Need More Nova Scotians” discussion page. He notes, “Halifax has ignored intelligent urban planning theories and created a mess of a city resulting in a particularly problematic and disturbing arrangement of commercial and residential areas”, and I for one think he is quite accurate in this assessment.

    While I do wish whatever project that ultimately proceeds success and recognize we do need building in our downtown core, I believe we are ignoring good urban planning with the proposed project, even though we’ve already figured it out! We are ignoring what makes great cities interesting and ‘happening’ places and more importantly ignoring what makes Halifax interesting and happening.

    HRM by design, while clearly not in the business of urban planning has set out guidelines and parameters for buildings and Heritage folks were involved. Now, we go against them with the largest development ever proposed in downtown in an area of small buildings. This development will not substantively help to improve our downtown, in my opinion.

    We need sensible, considered urban development. Projects that include community engagement like the public library. Lets do more of them. Let builders build reasonable sized buildings like Armour Group is proposing, spread the risks and rewards. Putting significant public money into a large project we don’t know much about just isn’t going to help in making downtown more interesting, more liveable or more lively. Why? It doesn’t work that way. Dr. Sanders told us that this week and no one seemed to listen to him. He’s a little academic, but, he clearly knows what he is talking about.

    I believe that many people don’t like this development and as a result, they won’t go downtown as much. Ramia says, “the people from New York and London I talked to like this building” and, about how NYC revitalized 42nd Street. People are buying this too. What does the development of 42nd street have to do with Halifax? Nothing. Seriously.

    That’s why Dr. Sanders who was here this week talked about building a downtown that people from here want to visit. From what I see, most of the people in the Save the View, EAC, Sierra Club and other organizations camps live downtown. And many of the people promoting this project don’t. They don’t have to live on the peninsula and probably never will.

    So, in my opinion, this project won’t help get more people downtown in any substantive way. More people and businesses are moving to the North End and this trend will likely continue for some time – ISL and Assante Capital are two recent examples. The North End is a good example of an area to work and live. This project will help to force the lifeblood of our growth economy – small businesses out of downtown. These are the businesses, which will grow our economy and employ immigrants. Small, local businesses we need to encourage.

    Had we put a convention centre on public land on the harbourfront thus requiring Ramia to build a building that suites that area of Halifax (HRM by Design dictates 5-7 floors if there is no public component), companies like these would likely move back downtown. Not to mention, financial firms from Bermuda and firms from London and New York would ‘get it’ that we are building to suit the size and scope of our economy – not trying to be like them.

    As with most generations of Nova Scotian’s, our politicians and various proponents have gotten nervous about a stalled economy and rather than working away at sensible projects, freak out and say, “the sky is falling, if we don’t do this exactly as proposed now, Halifax and Nova Scotia will die”. Watch The Simpson’s episode on Tim Bosquete’s post, its very funny. http://www.thecoast.ca/RealityBites/archives/2010/11/10/council-votes-to-move-forward-with-convention-centre-negotiations

    I think part of the point here is that we just don’t recognize who we are here. I’ve been to NYC five times this year. Halifax is so small. Tiny really. We should celebrate and be proud of that – shake that vibe. Its working in the North End. The North End gets it. But, decision makers regarding downtown who live in Dartmouth, Bedford, Armdale and Eastern Shore don’t. They somehow view our tiny downtown as a major urban and growth centre, which it never will be. We’ve forgotten that small business and sensible growth have been our hallmarks. We’ve forgotten about the ocean and the wealth it has and continues to bring to Halifax through our industries and our Navy and, forgotten about our vast amounts of unused land resources. These are the things that have made us wealthy and continue to bring wealth into our economy.

    Bryan Burns | November 11, 2010

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