SaltWire E-Edition

What could Mile One look like under private ownership?

Rolly Card St. John’s

The people’s paper recently published a letter regarding the “misunderstood” intended operation of Mile One in which the author very carefully laid out his perspective from his time on the board of St John’s Sports and Entertainment (SJSE).

To be credible, any analysis of the intended operation should be independent of city influence and consider all options to ensure city taxpayers receive the best possible return on their investment. With all due respect the letter did not do that. We only know what has been made public so far from the city and SJSE sources, which obviously reflects SJSE’S vested interest in perpetuating the status quo, and the letter reflected that.

Mile One is a city asset that has been a perennial money loser since it opened in 2001. From the KPMG report completed for SJSE we know it racked up over $7 million in operating grant subsidies plus $1.6 million in capital grant subsidies over the four years from 2016 to 2019 alone not accounting for the pandemic years 2020/21 or subsidies paid to SJSE for years 2001 through 2015. There is nothing in what we have been told to date to assure us that further subsidies will not be needed. In fact, the letter seems to suggest subsidies are the norm and should be expected. What if that did not have to be, and there was a path forward where Mile One could perform

the function intended without requiring annual subsidies from the city.

Let’s think for a moment about what a Mile One under private ownership might offer.

For starters, the subsidiary would disappear or would at least be negotiated if and when required as opposed to “here it is, now deal with it.”

The new owner would purchase the asset from the city at a negotiated price based on market value possibly determined through an open bid process. Marketing, maintenance, and upkeep cost as well as capital requirements would become the responsibility of the new owner and not the city, thereby relieving city taxpayers of those expenses. The facility would remain exactly where it is today, and city businesses would benefit from events and use of the facility in the same way they do now but without the city having to carry the associated cost.

Under private ownership I would also suggest the business mandate would change from a low-risk strategy to fill the seats with only the lowest risk opportunities, to a profit driven environment where a private owner would be willing to take greater risk to make a profit.

As a result, the potential at least is that downtown businesses would reap greater spin-off benefits from a privately owned and operated Mile one than is the case today.

Reference has been made to the overlap between Mile

One and the St. John’s Convention Centre (SJCC) in terms of joint use for specific functions and joint service and operational facilities that would need to be addressed if the two were separated as in the case of a sale of one or the other for example. Service agreements and event usage rates could be negotiated to address events where both facilities are required and to address utility services that may serve both venues.

Arrangements such as this are the norm and are done routinely where more than one or several businesses operate out of the same building or complex.

What about the possible business failure of a private owner operator?

Of course that is a possibility, however, including language in the purchase and sale agreement to address such an occurrence could mitigate exposure to the city.

To date, that has not been an issue because the entire operation is backstopped by city taxpayers to the tune of millions of dollars annually.

The point is Mile One is a significant annual drain on city finances that the new city council must address.

They should immediately commission an independent investigation to determine if there is private interest in purchasing and operating Mile One and under what terms. Only then will we fully understand if the sale of Mile one is an option worth pursuing.

OPINION

en-ca

2021-10-23T07:00:00.0000000Z

2021-10-23T07:00:00.0000000Z

https://saltwire.pressreader.com/article/281818582034691

SaltWire Network