Taxpayers face ballooning bill for CNE centre
Despite budget cuts, politicians want city to lend $35.6 million for conference site in Automotive Building
Nov 15, 2007 04:30 AM
Paul Moloney
city hall bureau
The city's critical financial situation has not stopped councillors from recommending borrowing millions more to cover the ballooning costs of a new CNE conference centre.
The price tag of the development – a pet project of Deputy Mayor Joe Pantalone – has climbed to almost $47 million from $29 million and the city has been asked to increase its loan to Exhibition Place. The city-owned agency is building the conference centre in the Automotive Building.
Pantalone, the Exhibition Place chair who pushed for construction of the Ricoh Centre and BMO Field, yesterday urged the budget committee to boost the loan. The committee agreed to increase it to $35.6 million from $21.2 million. Now, council will vote on the increase on Dec. 11.
"I think people will have some questions, rightly so, and the questions will be answered and council will overwhelmingly support it, hopefully unanimously," Pantalone said yesterday.
The committee was told conventions are big business with bookings attracting thousands of participants often taking place years ahead of time.
The new centre is needed because while the Direct Energy Centre has massive amounts of exhibition space, there is very little meeting space for exhibitors and no ballroom, both of which are sought by convention goers, members of the budget committee were told.
The new centre would have a 45,400-square-foot ballroom, a 70,000-square-foot exhibit hall and 31,000 square feet of meeting rooms to serve trade and consumer shows booked into the adjoining Direct Energy Centre, formerly the National Trade Centre.
Projections indicate the new centre would generate sufficient revenues to repay the loan over 25 years at an interest rate of 5 per cent. Naming rights would also be sold off by the city. Still, the city's debt is $2.4 billion.
Centre costs have risen because of the need to remove seven pillars and give users unobstructed views, to provide separate climate controls for different rooms and to increase energy efficiency.
"I think the taxpayers need to be concerned when they see massive increases in project costs," said Councillor Denzil Minnan-Wong, a critic of Mayor David Miller's administration.
"It really does make you wonder what they got wrong in their first study," Minnan-Wong said. "It doesn't give you a lot of confidence in their business planning, in how they put their proposals together."
Pantalone said that while the construction industry is very busy, he's hoping there will be no further cost escalations and that contractors will sharpen their pencils to snare what Pantalone considers to be a prestige project.
Prices are due to come in at the end of the month for about 25 per cent of the project, so council will have some firm numbers to work with in making a decision Dec. 11, he said.