Chances Casino and the P.G. Hotel - The Unedited Story- Part 2
By 250 News
Thursday, October 14, 2010 04:00 AM
Part 2. For part one, click here
The renovations to the former Chances Gaming Centre and the financing surrounding it.
On August 5th 2009 Commonwealth Health Corp. entered into an agreement with Northern Development Initiatives Trust in which Commonwealth would receive an interest free loan from the Community Adjustment Fund, a federal taxpayer funded program that was designed to stimulate work in depressed areas in the province.
The renovations to the Gaming Centre would create the Commonwealth Medical Centre, which was pitched to the Community Adjustment Fund as being the first step in the development of the “New Downtown.” “This application for contribution towards the overall planning and project management of the New Downtown project, in addition to contributions to the renovation of the Commonwealth Medical Centre fulfills the government’s goals to create immediate employment, generates lasting employment, leverage funds from other partners, build on existing partnerships and provide a legacy of longer term economic benefits” reads the conclusion in the executive summary that accompanied the application forms.
Under the terms of the agreement the budget for the renovations and “The New Downtown –Overall Project Management, including planning, design and engineering” was $3.25 million. Of that amount, $2.25 million would come from private investment.
The Community Adjustment Fund allotted $923,077 towards the renovation and conversion of the Gaming Centre, and $76,923 towards the “The New Downtown overall project management” for a total contribution of $1 million dollars in an interest free loan , repayable over five years.
The guidlines for qualifying for funding are contained in this document:
What is not produced in the documents is how the Community Adjustment Fund came to the conclusion that the Commonwealth proposal would produce not only immediate jobs but jobs in the future in keeping in line with the mandate of the fund. The application claims that by the end of March 2010, the project would create 352 total person months of employment worth $2.2 million in salaries and wages. The application further states there will be 128 person months of employment created by March 31st 2011 worth $1.89 million in salaries and wages.
The proposal scored high according to the NDI Trust and the Community Adjustment Fund's scorecard:
“The Commonwealth Medical Centre is a key catalyst project for ‘The New Downtown’ project in Prince George a major downtown redevelopment initiative” reads the Statement of work in the NDI Trust agreement with Commonwealth Health.
Two of the questions on the application form asked; will your organization enhance its revenues or profits as a direct result of the project? Commonwealth answered –Yes.
Will the project have a direct positive impact on the value of your company? Commonwealth answered –Yes.
Given that commercial loans would carry a minimum 7% interest in a depressed market at the time of the loan, Commonwealth enjoyed a $70,000 dollar interest break at the expense of the Canadian taxpayer in year one alone.
Under the agreement Commonwealth would repay the loan in 20 equal instalments of $50,000 dollars ending in 2015. They would only pay interest if they failed to meet those payments on time.
On March 31st 2010, Commonwealth and the NDI trust signed an amended agreement in which NDI wrote;
We wish to inform you that Northern Development has accepted your request to amend the contract to allow for unanticipated events that have delayed your construction timeline.
The proposal for the “New Downtown” put forward by Commonwealth did have its supporters; In the following three letters supporting the idea of a wood innovation and design centre, the letters also support the plans for the "New downtown".
Mayor Dan Rogers; gave the Commonwealth group high praise. (It is interesting to note in his letter the Mayor talks about evaluating a proposed Performing Arts Centre project)
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Then UNBC President Charles Jago also supported the idea of a wood innovation centre in this letter as he thanked McLaren for making him part of the New Downtown Implementation team
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John Bowman, President of CNC also supported the idea of a downtown campus.
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It is interesting to note that all three letters were written on the same day.
Several questions remain in the deal; what is the long term benefit to the taxpayers as a whole?
If, for example, you move a set of doctors offices (as is the case) from one section of the city into the new Commonwealth Health building, is not in fact the person who owns the space the doctors are vacating is actually subsidizing the move by way of taxes? How does moving physicians from one downtown office to another amount to being a catalyst for downtown revitalization?
How did the NDI Trust reach the conclusion that there would be long term jobs created from the facility?
How did the Federal government grant approval to a project that stood to give a company very limited future job creation, and under whose authority was that decision made?
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