Letter to City Council regarding proposed spa hotel for June 27, 2005, meeting

June 20, 2005



His Worship the Mayor
and Members of City Council
222 Third Avenue North
Saskatoon, SK S7K 0J5


Dear Mayor Atchison and Members of City Council:

I do not support the spa hotel proposal submitted by Remai Ventures Inc. and would like to submit the following comments and attachments for City Council’s consideration.

As a councillor, Don Atchison said, “I treat each dollar like it is coming out of my own pocket,” (SP September 23, 1997). With that in mind residents have a right to be concerned with the city’s handling of the South Downtown.

On April 5, 2004 when the South Downtown draft concept plan was released, the city’s $1,000 a day consultant told Council that the hotel site was an “A1” piece of real estate. “I think that’s a site that will certainly attract a lot of interest from both inside and outside Saskatoon,” said CitySpaces’ Gwyn Symmons. As it turned out virtually no one was interested – except for one developer seeking outrageous tax concessions and subsidies to build a hotel many say we don’t need. Why did this happen?

At its March 7, 2005 meeting City Council considered a City Manager report regarding the Expressions of Interest selection and Request for Proposals for River Landing Parcel “Y”. Page three states:

‘The evaluation has found that Remai Ventures Inc. and VPMI Hotel Group have scored sufficiently to proceed to the RFP stage. The review indicated that Remai Ventures Inc. and VPMI Hotel Group have captured the vision, scale, and timing outlined in the EOI and have demonstrated the appropriate financial capacity.’

What is not clear, however, is that if VPMI Hotel Group demonstrated ‘the appropriate financial capacity’ then what happened to that financial capacity? Why was the City not able to anticipate them being unable to secure financing for their proposal? Doing so might have spared the City the embarrassment of having them pull out at the last minute.

Mayor Don Atchison said there would be no tax breaks or subsidies on the hotel site.

“One of the big concerns is that people are afraid we’re going to subsidize whatever the development is. My belief is that the private sector needs to pay for it and the only way you can do that is to have high density.” (July 31, 2004 SP)

‘Atchison says council is determined to get south downtown commercial development going without having to offer up tax concessions or subsidies.
"I don't foresee that at all. I see this as an economically viable piece of property that should be standing on its own," he said. "That's the reason we're seeking investors outside the city.”’ (August 17, 2004 SP)

“I haven’t heard anything different that council wants to subsidize anyone on that particular location at all and I think I can speak for Council saying that everyone believes that it’s a for profit group that’s going to be building there and they’ll be supplying their own funding.” (November 29, 2004 City Council meeting)

Will Atchison keep his word or is it worth so little?

“We have to get full value for that land,” said Atchison in the May 4, 2005 SP. The $1.6-million offered by Remai Ventures Inc. appears to be $1.3-million short. The City’s River Landing Capital Budget (attached) – tabled at council’s November 15, 2004 meeting – shows the appraised value of the land as $2.9 million. I wrote to City Administration seeking clarification. The city’s December 14 response (attached) says, ‘The appraised value of land is for the hotel site only and I don't believe it was done by square foot. You could do the math yourself - it's 0.98 hectares.’ Will Atchison keep his promise and demand full value for the land? If not, why?

Council has never publicly debated why the Gathercole land must be sold. In an August 16, 2004 report from one of its many closed-door meetings the Executive Committee said, ‘Your Committee supports the sale of the property, as opposed to leasing.’ At stake is the most important piece of public land in the city and this is all Council would say on the matter?

In its June 14, 2003 editorial the SP said that the Gathercole land should be leased, not sold. Furthermore, in a January 13, 2004 letter to the city solicitor’s office (attached), Meewasin CEO Susan Lamb wrote, from an administrative point of view, that, “We see some serious consequences from selling the Gathercole land to a private developer and feel you should look at other options including leasing it.” Lamb cited The Forks in Winnipeg and Preston Crossing in Saskatoon as examples of how “other landowners make use of leasing.” The SP and MVA are now silent on this issue. It is interesting to note that Mayor Atchison admitted that long-term leasing would, like land sales, generate tax dollars (SP April 30, 2004). So why must the land be sold?

‘Atchison confirmed that he’s not interested in spending public money on the Gathercole site, as some have suggested. “For the life of me, I can’t believe we would take federal, provincial or municipal dollars on a site where the private sector has been knocking at the door.”’ (January 16, 2004 SP)

Since then, however, his strategy seems to have been spending whatever it takes. The City has so far committed about $12-million for site preparation and infrastructure. Atchison wants the $10 million in federal centennial funding from Western Economic Diversification (WED) sunk into the cultural centre. David James, WED Director General, says that his department would like to form community consensus (May 4, 2005 SP). Unfortunately, the public has never been asked where it would like to see its tax dollars spent, so how does James propose to garner its support? In exposing its bias in favour of the cultural centre I feel that WED has tainted the process beyond redemption.

Persephone Theatre ($7-million) and Meewasin Valley Authority ($8-million) have stated that their proposals will require municipal, provincial and federal funding. No word yet on how much Tourism Saskatoon might need. The City already provides annual subsidies to the MVA ($612,400) and Tourism Saskatoon ($349,000). Meewasin recently indicated that its proposal would need more operating money (June 16, 2005 SP). Yet to be determined is how much public money will be required to provide underground parking and a landmark structure.

In the end it appears that enough public money will be spent on the site that the Gathercole building could have been restored two or three times over. This is quite a feat considering City Council originally said no money was available. And this does not even include the A.L. Cole site! Where is the accountability for this?

The public was led to believe that the City’s South Downtown plan would be special and unique. It would attract tourists from across North America and around the world. The River Landing Interpretive Plan (AldrichPears Associates, April 2005), however, suggests the goal is considerably less ambitious.

Page 11 of the plan states, ‘A summary of tourism in Saskatoon by Saskatoon Tourism identified over two million visits to Saskatoon annually, including over one million overnight visits. Over 60% of those visits were from within the province, with another 30% coming from neighboring provinces and the rest of Canada, 5% from the United States and 2% from overseas. These statistics clearly show the audience is primarily local.’

Page 12 states, ‘The main goal for the site is to create a premiere destination in the South Downtown for residents of Saskatchewan.'

Why has the City lowered its sights so much?

In 2004 Saunders Evans Architects Inc. conducted a review of the City’s DCD1 Guidelines. Its February 24, 2004 report (attached) states, "After attending the four public presentations and being witness to the level of frustration and distrust with the approvals process that was voiced by the general public, we feel that it might be prudent to consider adding a clause pertaining to the creation of a Development Approval Advisory Committee - an unbiased committee of experts and professionals seen by the public as having the experience to review and approve developments for this important site, but having little or no tie to the City or MVA." The City ignored the advice.

The committee’s that the City established to review and evaluate proposals for both the cultural block and hotel site includes numerous City staff. It is far from being the unbiased, arm’s length advisory committee that was recommended. It appears to me that Meewasin, Persephone Theatre and Tourism Saskatoon have had the inside track all along, not to mention the heavy handed process behind the forced development of a hotel at any cost.

“Simply put, nothing has been proposed so far that will elicit a wow from a visitor to Saskatoon or anyone hearing of the Landing to make her want to visit the city,” said the SP on March 11. Remai’s lone, underwhelming proposal confirms that – and likely paints council into a corner. This does not appear to bother Mayor Atchison, though. In the May 27 SP he was reported to have said he's not inclined to issue another call for proposals just to provide the city with options. His mind is made up. He’s convinced of the hotel spa’s viability despite financial lenders and hotel industry people suggesting otherwise (SP May 26, 2005).

I feel Atchison’s October 2003 campaign promise to deliver a responsible and accountable civic government has not been honoured.

Thank you for your time.

Sincerely,



Joe Kuchta
Saskatoon, SK

/Attachments

Cc:
Susan Lamb, CEO, Meewasin Valley Authority
David James, Director General, Western Economic Diversification
Hon. Lorne Calvert, Premier of Saskatchewan
Andrew Turnbull, President, Saskatoon Hotels Association