Frances Bula header image 2

BC Place renos don’t depend on casino money

March 15th, 2011 · 68 Comments

That’s the word from PavCo CEO Warren Buckley, as he spelled out for me exactly how the $563-million renos are being financed for BC Place. My story is just one small effort to isolate some of the actual facts in the pile-up of information and misinformation debris that has been accumulating around this project.

There are still so many other pieces to sort out, which even the public hearings aren’t helping with that much as various speakers come with their version of reality.

Staff are trying to clarify on the 1001 questions as they arise. This memo got sent out recently. as part of that effort.

Things we still don’t know:

– What are the number of problem gamblers in the province? (We know the likelihood, but not the actual caseload so far.)

– Will Paragon really just pack up its bags and go if it doesn’t get an expansion? Paragon announced that, contrary to what an earlier media report said, Paragon can’t extend its lease at the Plaza of Nations past 2013. That makes you think they’ll close. But others say it’s hard to imagine that they will give up a lucrative casino licence that is managing to make them money at its current size.

– What is the real likely revenue for a larger casino and how much of that is actually new revenue, as opposed to current levels of gambling just resorting them?

– How long would it take to bring in that $100 million a year from new international visitors that Paragon talks about?

and, last but not least,

– How did this whole deal come about? That’s what baffles most of us. When I talked to Warren Buckley today, he wasn’t able to recall exactly when he learned that Paragon wanted to triple the size of its casino. Everyone had known since 2006 that Paragon was going to have to move the Edgewater. Both the city and landlord had made it clear it needed to move by 2013.

I saw the casino placed next to BC Place on an architect’s plan for the area in May 2008, when the premier announced the Vancouver Art Gallery would move to the area. But I didn’t think much about it. It seemed like it was just the casino I knew, but moved across the street.

Mr. Buckley thinks that he didn’t really have a sense of Paragon’s much larger plans until the request for expressions of interest came in, although Paragon had obviously been expressing an interest in moving for some time before that. But he had been out of the country working elsewhere just prior to that, so I’m not sure he’s the best person to nail this one for me.

Maybe we’ll find out in the next 100 hours of public hearings.

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  • Frances Bula

    @Morry. Do you have a clip of him saying those exact words. Or is that the reporter’s summary of what s/he thinks Podmore said. I can’t tell you how many times I have got things slightly wrong over the years because I thought I heard someone confirming what I wanted to hear. If there’s a clip, okay. But this is a paraphrase. Different thing.

  • Joe Just Joe

    Frances, while the sign at Rogers Arena might mention an office tower it now won’t be all commercial like the original proposal. The new tower is only commercial on the bottom, the top will now be residential as will be the other two towers proposed for the site. Pretty sure no developer has the appetite for office space around BC Place especially for $6M/yr in land leases.

  • The Fourth Horseman

    @morrie #45

    Justason poll in February 2011 and released by the City then, too, I believe. Found that 70% of decideds were against, with 30% of decides for.

    “And let’s say if you do poll people and the majority do not support gambling, would they make or not make compromises if it meant tax increases or limits to future growth in programs?”

    I always get a big kick out of people who only look at the “upside” of the numbers provided, morrie. As with any enterprise, the expanded casino, regardless of what it might do to its citizens, how it affects neighbourhoods, or how it may downgrade the overall Vancouver experience, is to be lauded, regardless of downside consequences, very ably documented in other jurisdictions.

    Some people here seem to follow the adage “they know the price of everything–and the value of nothing”.

    I would dare say, morrie, that people may just say OK to an extra $18 per Vancouverite per annum on a tax bill (whether income, business or property tax) in order to keep this thing from becoming a defining part of Vancouver.

    $18 per person, per year—this is what the revenue to Vancouver from PROJECTED numbers from Paragon would mean to the City coffers.

    And of course, Paragon hasn’t kept any of its previous revenue projections/promises in the current spot that houses Edgewater, so let’s make that $10 per person, based on the fact that current revenue projections from Paragon are off by around 35%.

    AND, of cource that doesn’t include costs for extra policing, social services, etc. etc etc. In fact, strip away the extra $10 million from the $16 million (plus property tax money that we would get if something else built there) Paragon says the expanded casino might bring in (it currently gives us $6.3 million) and one could see the possibility of a net loss to the City.

    Certainly, we would have to go begging to the province for more services, since those are a Provincial matter. Hmmm. How much dough do we get from the Province for treatment of the addictions—including gambling–we already have? Don’t make me laugh.

    And how ironic that the game of real estate tradeoffs for new social housing in Vancouver is predicated on luring more addicts to the area. Sure, build those SRO’s on the backs of other addicts. Pure genius!

    Yes, let’s talk about Burnaby. Why don’t they talk about capacity issues and increases in revenue there? After all, $180 million was spent to upgrade the facility, to see a measly 6% increase in revenues? And we are told that we will see a 100% increase in revenues—from $100 to $200 million plus by tripling the size of the Edgewater facility? Really?! Seriously?!

    Or how about the River Rock in Richmond, , where, according to Stephen Quinn, who visited on a recent evening, and said the place was not busy.

    Do you not think that perhaps we are seeing a bit of a saturation problem here in the Metro region? So, you build The Largest Casino in Western Canada—and that that will bring in the “tourists” alright—from new West, Coquitlam, etc. (Seems that the fellows at Paragon and PavCo are now backing off the big overseas numbers they were predicting. Quel surpris!).

    A casino, is a casino, is a casino. Same games. Same people. A bigger spot will be a novelty for about 5 minutes. Then people will go back to playing at the ones they have in their communities.

    Or maybe they won’t. Because the people who give a casino it’s biggest return are its problem gamblers—gee, there’s that nasty “downside” thing again.

    If individuas go to a casino even once a month, that is not who they are catering to…

    Here’s an idea. Since the bulk of the revenues go to the Province anyway, why not have those in Burnaby and Richmond become Super Casinos and make those our “Destination” casinos. They get a little more for hosting, policing, and addiction services, but the rest of the cities in the region get cash back for supplying the patrons.

    The best part for Vancouverites: less temptation for the younger gamblers to get started, so less social services needed. Less gang bragging rights in our area (go out to River Rock any night and see if you can spot one or two), less money laundering and less loan sharking.

    Yes, please send me my $10-$18 bill, City of Vancouver, forewith. Those are numbers I can believe in.

  • S Garossino

    @Ian: Interesting re: Significant Projects Streamlining Act. You are right–I had forgotten that legislation. It certainly has its own nooks and crannies though.

    1. Where has the Act been used since its enactment in 2003, do you know?

    2. Do you think the Province would use it to force casinos into communities?

    3. Do you see use of a move like that as a winner for the Province?

  • mezzanine

    @ Fourth,

    It is hard in some ways to put monetary values on governance. From a societal point of view, I can see benefits to the construction jobs, reduction in black market gambling and government revenue streams that casinos can bring. I can also see a lot of potential downside with problem gambling, money laundering and poor urban form if done improperly.

    Let’s say we do propose an $12 per person tax to replace gambling. Then consider the metro mayors just rejected a $31 per *household* property tax that translink wanted to improve transit and road infrastructure [1].

    …….

    didn’t know about justason – 51% against, 31% for and 17% neither.

    http://www.justasonmi.com/wp-content/uploads/2011/02/city-omni-release-12-FEBRUARY-2011.pdf

    How much gambling is too much? i don’t know. I wouldn’t want vancouver to turn into vegas, yet i don’t think this proposal will, if we get the urban fit and streetscape right.

    I can also see how a DT casino will most likely draw money from outside Met Vancouver/BC. I don’t know how much.

    If gambling as you say is an unqualified bad, that will negatively affect neighbourhoods, then we should aim to remove gambling from the CoV, if not the metro area/province. we might get closer to that if paragon fails and edgewater loses it lease on the plaza of nations and the city opts not to seek a new site.

  • mezzanine
  • mezzanine

    nb in my #57, it should say “a DT casino will most likely draw the most money from outside Met Vancouver/BC compared to other casinos in the metro area.”

  • Ian

    Last post Frances, because I suspect we’ll continue to disagree big time on this one:

    First, as someone who appreciates your work very much even when I disagree with you, I’m surprised at the tone of your response.

    I’ll leave it at this. I disagree with your assertion that it was no biggie to amend the ODP to include a permanent “major casino” use when Council in 2004 only tenuously approved – very explicitly – a temporary use.

    That’s particularly the case when there was no public discussion of the change (it wasn’t included in the public open houses) and nobody apparently requested the new zoning.

    I believe that’s a legitimate position and I’m sorry you don’t even if you disagree with it.

    I also disagree with you on the fairness of PavCo’s RFP process.

    Paragon principal Dianne Bennett admits that the rezoning put them in a favoured position. Here’s how she put it in an interview with the Las Vegas paper: “There were other bidders (for the Vancouver project) but we had the casino license. Others could build a hotel, but no one could offer the economic impact that we could with our plans.”

    I see a problem that PavCo set up that process, paid for half of it, was fine with putting the zoning change before a public process and then went out with an arguably biased and truncated RFP process.

    That wouldn’t pass scrutiny in most Canadian jurisdictions. Again I’m sorry that you don’t see that as a legitimate concern even if you disagree with it.

  • The Fourth Horseman

    Mezzz #57

    I just can’t see that they have made a compelling presentation for gamblers from outside of BC being attracted to Vanc. at all because of an expanded casino. Indeed, it appears that the total number of out-of-town(Metro gamblers) has been lowered several times as we go along.

    The fact is that the design of this casino plus the proliferation of slots is the indicator here. You’re not drawing the Macau money, you’re not drawing the Europeans. The folks in the Staes have plenty of gambling properties, many of which are now failing.

    We don’t see a breakdown of from where these “destination” gamblers would be coming from. I believe that Paragon, in their Deloitte report—that used Paragon numbers—mentions a marketing budget of $700,000.

    That hardly buys you 3x a week coverage in our local community papers.

    Look, the

  • The Fourth Horseman

    Sorry, can’t remember where that “dangler” above was going. 😉

  • The Fourth Horseman

    PS Oh well I know that the Mayors don’t want to raise property taxes re: transit.

    So add it to my income tax, send it to Ottawa, who sends it back to BC. Then the province can pat our mayors on the heads and hector then about ponying up, before handing it over at the local level, where it should be.

    One. Taxpayer.

  • mezzanine

    @ Fourth #62

    Lotto fever! 😛

  • Deacon Blue

    Some mention “Burnaby”. I assume they mean the “Villa” visible on the Freeway on the south side as we approach Boundary Road.

    I was a building technology student at nearby BCIT in the 1980’s when that job went bust. The top level projected majestically over the cruciform plan of the tower itself…

    Problem was? The architects had failed to conceive how that would be built some 20 stories up in the air. The engineering solution was to erect (very expensive) temporary steel I-Beam supports for the concrete formwork.

    The Villa was a dead duck from that moment on, until the Casino deal came through.

    Then, there is Bridgeport… Disneyland on the Fraser. And, lying under the flight path of aircraft headed for YVR. Nobody wanted to shop there.

    Miraculously, after the casino opened there was a new hotel. Soon, Canada Line would be stopping there too.

    Hey, a Casino with hotels in the flight path to the airport, serviced by LRT, all that is good with me. It makes sense. People can ride transit from there to the airport, or to points elsewhere in the city. The hotels can serve the Casino, or they can serve weary travellers. It’s a win-win.

    However, adding more gaming to the stadium district is a lack-of-brains solution. Let’s kill it.

  • Frances Bula

    @ Ian. I don’t think we disagree that Paragon had an edge in the process because they already had a casino licence. As I said in my last post, that made it unlikely that any other casino operator would bid. It also made it harder for anyone proposing just a regular office or commercial development to compete.

    But there are always bidders on projects who are in a better position than others. That’s why they end up winning. The only reason to be suspicious would be if there was some very targeted effort to include “casino” as a permitted use in that zone, without anyone wanting it or realizing that Paragon intended to try to get it.

    And that’s where I disagree with your interpretation. The temporary use in 2004, as I keep saying, was only for that Plaza of Nations site. There was never any suggestion that I ever heard that the city or even the local residents saw the Edgewater casino as something that would eventually be forced to leave the area. That’s why no alarm bells off when people saw the October 2008 report and there were several mentions of the casino and relocating the casino. It’s because everyone, local residents included, expected that the Edgewater casino would end up somewhere in the same area, just not at Plaza of Nations.

    People are still saying they are fine with having the casino, at its existing size, there. What everyone is objecting to is the tripling of the size, which was not at all spelled out in the October 2008 report.

    BTW, you say there’s a problem that PavCo set up that process and paid for half of it. That seems weird to me. PavCo pushed for a rezoning, yes, and we all acknowledge they really jammed the city. Other developers have done that on occasion, but none with quite the force that PavCo did. But the city makes all applicants pay for part of the process. If they didn’t, local taxpayers, likely you included, would be complaining that we all were having to pay the costs of their expensive and time-consuming rezonings that include having to hold public hearings.

  • The Fourth Horseman

    Mezz #62

    LOL!!!

  • Morven

    Francis Bula # 64

    You are mistaking cost efficiencies with the apprehension of a conflict of interest.

    Yes, the city does required developers to engage in early planning studies. But when the city staff are the ones doing the planning studies for the developer and it is the same department that provides the impartial advice to our elected representatives, then the ordinary citizen is quite entitled to ask where are the checks and balances to ensure impartial advice.

    As I have said earlier, there are more than adequate independent planners/architects to do the early studies without city planners being closely involved.

    In many other disciplines, the appearance of conflict of interest is something to be avoided at all costs (sic). Why should developer funded planning studies be any different?
    -30-

  • Bill McCreery

    @ Morvin 66.

    Agreed. And, this is also the same line of thinking which puts the Director of Planning in a joint press conference with a developer, and the Mayor championing a spot rezoning development PROPOSAL at the applicant’s press show and tell.

  • Joseph Jones

    Bula #50: Sex shops are very regulated in Vancouver.

    So tell us all about how our effective City Hall is moving ahead to shut down no-business-permit Fantasy Factory at Kingsway and Fraser.

    “It will be months before the fate of a controversial sex shop operating without city approval is known.” Vancouver Courier (10 Dec 2010)