Mayoral candidate slams contract, urges second look

Posted by on October 24, 2005

By Malcolm Curtis, Victoria Times Colonist, 24 October 2005

Save-on-Foods Arena

Ben advocated a review of the city's contract with RG Properties for the management of the new arena, to explore ways of bringing the publicly-financed facility back "in house"

Victoria Mayor Alan Lowe’s main rival in the Nov. 19 municipal elections says there may be grounds to tear up the operating agreement between the city and the developer of Save-On-Foods Memorial Centre.

Ben Isitt, mayoral candidate for the Victoria Civic Electors, says the taxpayers got a rotten deal and he wants to see if the operating agreement with Vancouver-based RG Properties can be renegotiated.

With portions of the $30-million Save-On-Foods Memorial Centre still incomplete, some contractors still unpaid and the opening of the facility delayed, there may be grounds to take another look at the contract, Isitt said in an interview.

“When I go out door-knocking I know from voters that they are unhappy with the arena,” he said. “They feel they were shortchanged.”

But Lowe said Isitt doesn’t have his facts right.

RG has “done everything according to the contract,” the mayor said. The Vancouver company, headed by developer Graham Lee, produced more revenue for the city in the first three months of the arena’s operation than was budgeted for a year, Lowe said, although he didn’t know the amount.

More than 500,000 people have enjoyed events at the facility in its first six months of operation, he said.

And the more than $20 million in economic benefit to local businesses from the men’s world curling championship last spring, he said, is an example of the positive impact the arena has had.

It has proven to be a “huge economic generator,” helping the downtown by keeping restaurants and bars hopping while hotels benefit on event nights, Lowe said.

The mayor insisted the arena is a good deal for taxpayers because it was built for a fixed price at a time when construction costs have gone through the roof. The city likely would have paid $35 million for the 7,000-seat building if it had done the project without a partner, he said.

“In a perfect world” the dispute among contractors, RG and the city “wouldn’t have happened,” he said. “Nobody anticipates these issues … but no one predicted a construction boom.”

Despite the disputes, the arena is operating and people are using it, he said.

But Isitt said the city isn’t reaping the benefits it should, while public access to the building is secondary to commercial events that largely benefit RG Properties.

“The taxpayers paid most of the cost of that building and yet most of the revenue is going to the developer,” Isitt said.

He said voters “obviously have problems with the name. Taxpayers paid for the arena, not (Save-On-Foods owner) Jimmy Pattison.”

Isitt said the commercial name was an insult to veterans. And most of the $1.3 million that Pattison paid for the naming rights for 10 years went to RG, not the city, he said.

Lowe said that arenas across the continent have naming rights that help reduce the cost of the facility to taxpayers.

Isitt said that because the arena was delayed in opening, the public has missed out on ice time and use of the arena while the $2 million paid by RG over 10 years to run the arena seems “wholly inadequate” for taxpayers.

The VCE candidate has hired a lawyer to determine whether there are grounds to negotiate a better deal for taxpayers. He is open to the possibility of having the city run the building.

But Lowe said the municipality can’t take the same risks as a private operator in booking concerts and other events. And while Isitt maintained the city operated the former Memorial Arena successfully, the mayor accused him of “not doing his homework.”

The former arena ran at a loss of more than $500,000 a year, Lowe said.

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