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Looking Back/Looking Ahead: City decides to go it alone
As New Year’s Day 2012 dawned, there was a big hole in the ground at Columbia Street and Eighth Avenue. The pit was gradually filled in as a foundation for a civic centre, parking lot and office complex emerged.
But as the year progressed there were many who feared taxpayer dollars were being dumped into the pit along with concrete and steel.
It was revealed in early 2012 the tentative agreement the city had with Uptown Property Group to take over the office complex part of the project had fallen through. With no other private sector company coming forward, the city decided to continue construction without a partner.
Money would be saved on the infrastructure if both projects were built at the same time, council said. Although they couldn’t convince anyone to replace Uptown in assuming the risk, council decided it was worth taking on themselves. Commercial real estate experts had told them the office space would be highly desirable because it’s so close to a SkyTrain station.
“Our view of the world is by the time that building is about half up we hope to have the cost covered,” said Coun. Bill Harper at the time.
But to make it happen, the city had to do some financial shuffling to pay for the structures that are expected to cost more than $90 million. The biggest move to make it happen was council authorizing going to the Municipal Finance Authority (MFA) to borrow up to $59 million. They asked the MFA for the financing for capital projects already planned that were supposed to be paid out of city reserves. That would allow the city to use the reserve money to pay for the construction.
At first, the decision didn’t create much of a fuss, although Coun. Chuck Puchmayr said while the risk wasn’t extremely high, he wasn’t comfortable enough to support the borrowing.
Despite his concerns, at first it seemed to be just another bylaw passed by council. But then some residents began to take notice. Emails and Twitter messages expressed concern the money would be going, albeit indirectly, toward paying for a risky private venture that could leave the taxpayers on the hook for big bucks.
“The public has not approved building an office tower on the taxpayers’ backs,” cried James Crosty, a former mayoralty candidate and past president of the Quayside Residents Association.
“That’s a really low way of approaching taxpayers and borrowing the money for this. The public has the right to know where the money is being spent … Whether it’s right or wrong, the motivation behind that is suspect to me.”
But the only way to force a referendum on council’s borrowing decision was to collect petitions signed by at least 10 per cent of registered voters in the November 2011 municipal election. That meant 4,528 signatures were needed by Aug. 7 just to force a civic referendum on the bylaw—a tall task considering it was summertime in the city.
Crosty spearheaded the campaign that gathered more than 2,000 signatures. Not nearly enough, but a message had been sent.
The controversy didn’t die down either. Freedom of information documents detailing Uptown’s proposal released late in the year revealed the company had offered to build the civic centre, now officially named Anvil Centre and expected to cost well over $40 million, for $35 million, along with developing the office complex and parking lot.
Although it’s been eight months since council made its decision to go it alone on the project and still no buyer has been announced for the office complex, council remains optimistic the city won’t be on the hook.
“I am aware there are people out there who are apoplectic but if they look at it they will see it makes sense,” said Mayor Wayne Wright recently.
The mayor believes the building’s location is key for the city’s expectation either a partner will be found or for businesses to lease in the building. That’s why going ahead with the office component made sense to him instead of just building the civic centre.
“When you have the location you do not build less than the best for that location,” said Wright. “[Not building the office tower] doesn’t give us the help (economically), the jobs for the area and the tax revenue.”
Despite council’s confidence—in addition to the real estate consultant company looking for a buyer, Avison and Young, saying in August it had two potential large tenants—New Westminster heads into 2013 with no purchaser having been announced for the office complex.
Until that happens, the fear of it being a taxpayer money pit will remain.