NHL arena promoter finds new financial backers
A new financial framework option was announced Tuesday, where the GTA Centre LP would be responsible for funding all costs associated with construction of the proposed GTA Centre after the $162.5 million mark.
The cornerstone of the old financial framework was the city would have to borrow $325 million on behalf of the private sector, GTA Sports and Entertainment CEO Graeme Roustan said.
Under the financial framework approved in April 2012, the city would borrow the $325 million to construct the facility, half of which would be paid back by the private sector while the city recovers its share through various means, including special charges on new development, ticket surcharges and parking revenues.
The new financial framework gives council another option, Mr. Roustan said.
wanted to give council another option, he said. would rather give them two options than give them one that ends with a yes or no.
However, arena skeptics were saying nothing changes with the new financial proposal.
all smoke and mirrors, said Regional Councillor Jim Jones. really has changed.
The media release doesn mention developer fees from constructing the building or property taxes to the city, he added.
Roustan) still wants it to be a municipal capital facility, Mr. Jones said. on the hook for $162.5 million. Development charges we forego, property taxes. Infrastructure, bridges and roads, we still have to do.
How the city comes up with its portion would be left for council to decide, whether it comes from Section 37 funds or development levies.
Another option is to leverage funds or sponsorship monies from developers. But how that is done is up to the city, Mr. Roustan added.
city can work with developers and bring that number down to zero, he said. can control developers in the city. The ball is in their court.
If developers are that excited about the project, they can support the arena without city involvement, argued Karen Rea, president of the Markham Village City Ratepayers Association. developers) can donate directly, she said. the money gets cashed by the city, it public money.
on raising $162.5 million, now you are just short another $162.5 million.
There are still many questions left unanswered, especially with a notice of motion on next week council agenda calling on the city to rescind the April 2012 financial framework that would see the city borrow $325 million.
Deputy mayor and Regional Councillor Jack Heath motion also called for arena proponen Red Bottom Shoes ts to explore other avenues of private funding for the NHL ready arena.
is encouraging Red Bottom Shoes , Mr. Heath said. the devil is in the details. We still don know the city involvement. We don have all the answers yet.
Mr. Heath still plans to move ahead with his notice of motion for Sept. 24 that will see the GTA Centre debate come to a head on Oct. 8.
The new financial agreement brings in two new proponents, Jefferies LLC and Canaccord Genuity, but that doesn come with funding guarantees.
Under the initial financial framework, the Remington Group was the project guarantor.
guarantee do we have these new proponents will pay? asked Ms Rea.
Since he is coming to the table with cash in hand, there is no need for a guarantor, Mr. Roustan argued. the old financial framework, the city would borrow the money and I would pay it back, he said. city wanted a guarantor. I bringing cash to the table. Under this new financial framework, I not borrowing, I contributing.
sat in council m Red Bottom Shoes eetings, I met with residents and the No. 1 objection I heard was why did the city have to borrow $325 million, he said. hear you. I coming to the table with cash. It took me 17 months to raise funds for this new option.
According to the announcement, the GTA Centre LP would be responsible for construction costs above a maximum of $162.5 million, which the city would facilitate Red Bottom Shoes through private sector developer contributions.
special levy is still coming from the public sector, Mr. Jones said. needs to be all from the private sector.
The city could be on the hook if a class action lawsuit in a court of law challenged the use of special levies, Mr. Heath said.
With the latest focus going back to the collection of “development levies” by the City, we must pay attention to them regardless of their legitimacy. Since Section 37 monies may be removed from the Financial Framework to pacify a few councillors for their votes, those shortfalls will be added to the Levies. “Indexing” of 2% per annum on the levies. Together, these will “burden” the developers and resulting in price increases, compounding the depressed sales of Condos in an over supplied market which may eventually accelerate its collapse.