As the days count down for the Alternative Approval process, and the citizenry of New Westminster sits in a cat-like state of readiness, anticipating what comes next, it seems as good a time as any for me to noodle on about what we’ve learned, and haven’t.
It has been an interesting campaign to watch for many reasons – almost as many reasons as there have been given for the campaign itself – because no two people seem to agree on what the campaign is even about.
Ultimately, it is all about the Office Tower that the City wants to built atop the New Multi-Use Civic Facility. Since the Uptown Property Group bowed out last winter and the City decided to charge ahead, everyone has been Monday-morning quarterbacking the decision. People bully about the future of the City, including a lot of Real Estate types I have talked to, think it is a good idea, a sound business decision that shows confidence in the downtown revitalization. Others have questioned whether a Municipal Government should be taking business risks with taxpayers’ money.
It is this second group who have been most vocal about the referendum campaign. Most of the talk around this campaign, and the balance of Letters to the Editors, have been of the opinion that the City should not be building the Tower. Many of these opinionists wrongly think that 4528 signatures will stop the Tower from being built, after the hole had been dug, the foundation has been poured, and $12 Million has already been spent on the building. Some go so far as to call the City’s refusing to stop building now regardless of referendum is a display of “arrogance”. This is silly, as the only way the City is sure to lose is if they stop building now…
However, the campaign is not really about the Tower, it is about the $59 Million long-term loan guarantee for which the City is seeking approval, in order to finance construction of the Tower, MUCF, and attached parking garage. Some say this is too much debt for a City the size of New Westminster to take on, and may cause us to go bankrupt if the Tower business model (gamble?) doesn’t work out.
Except, again, it isn’t really a $59 Million loan. It is asking for pre-approved financing for up to $59 Million over the next three years, if required. It is more like a $59 Million line of credit at 1.7%, there if we need it, no obligation to use it. Some of this money will be used to finance things for which we are guaranteed a return on a known schedule (i.e. the DAC funding we are going to get in 2013, but we must spend before we can get reimbursed for it). Some we may spend on the risky stuff, and we are very likely to get some (if not all) in return based on the value built into the Tower.
It is certainly not “risk free”, but the City is securing $59 Million at 1.7% to build an asset that will be worth $100 Million when completed. I imagine there would be a line of developers who would line up to take that risk (but of course, they do not have access to the MFA loan rates). The City has money and assets elsewhere (some, notably, earning more than 3% interest) that by far outstrip this Tower in value. I suspect that is where the City’s financial folks are saying, I paraphrase, “we don’t need the loan to move ahead”. Even after (when) (if) this loan is drawn, the City will only be using less than a third of the total credit available to them from the MFA. the City can make money here for taxpayer, or they can lose some money, but the risk of bankruptcy, even if this tower is hit by a meteor the day after it is built, is so low as to be indistinguishable from zero.
Borrowing from the MFA to build an asset seems like a strategic investment to me, not a dangerous debt.
There is a third thing this campaign is about, besides the Tower and the Loan. James Crosty has taken pains to point it out (although it just isn’t as compelling to most of the Twitteridiots and letter-to-the-Editor-writers as Towers and $59 Million numbers): and that is the Alternative Approval Process itself. Crosty has said several times that this is all about getting the discussion out into the open; bringing democracy out of the shadows, to make it accountable.
The AAP is perfectly legal, and something the City of New West and other Cities have done numerous times before, but it stinks like a flattened skunk on East Columbia. It is effectively “reverse-billing”, by assuming people are happy with a big decision if they don’t line up to oppose it. To ask people to voluntarily engage in that process in the middle of summer, then not make the process as open, transparent, easy, and accountable as possible is to not respect the democratic purpose or the spirit of the Community Charter.
Crosty has said he just wants to call attention to this process, and I have to say he has been pretty damn successful. The unanticipated side of it was that it drew attention to some of the bigger issues behind the Tower, the deals signed (or apparently not signed) between UPG and the City, and the timely disclosure of when the deal started to go sour. Ugly questions are arising about election timing…
Regardless of how this referendum campaign comes out, the City needs to start talking about this. New Westminster is a small town, with many active rumour mills. There are too many people who are willing to publicly fill gaps in their own knowledge or understanding of a process with assumed corruption or malfeasance. The only way to quash that is to fill those gaps with defensible data. And a new building surrounded by rumour, innuendo, and suspicion is going to be a lot harder to sell when that time comes, effectively increasing the “risk”.
Now, I’m not always the sharpest knife in the drawer, but I know a fair amount about the Community Charter and how Municipal Governments operate. I have been reading all of the City-provided info about this project, including Council reports around the financing and the loan. I have read the FOI-released info acquired by Chris Bryan at the Newsleader, and the other news and opinion in the papers. I even attended the Downtown Residents Association meeting where the Mayor talked about this project, and listened to his comments on CKNW. After all of these attempts at information gathering, I still have a lot of questions about this topic. What went wrong with UPG? Where is the business plan? While there may be good business reasons to keep some info proprietary, there must be a balance to be struck while giving the voting public some idea of what their business plan is like for is tower – the rationale that had most Councillors vote for moving ahead, yet cause Chuck Puchmayr to say no.
I have a lot of confidence in this Council being able to do good for the City (and see a decade of steady improvement in the City as proof of this confidence), but blind trust in their perfection is just as irresponsible as presuming that they’re doomed to screw everything up.
One untrue thing I have heard during this is “this is not about politics”. To that I can only say bullshit. This is all about politics.
The usual Wayne Wright critics have surfaced in the Letters section of the Record and NewsLeader, the local Twitterati (including the @59million sock-puppet handle) has been filling their own gaps in knowledge about the tower with suspicion and suggesting a referendum was the only way to get to whatever you wanted (be it stopping the loan, stopping the tower, finding the “truth”, whatever) while listing off political allies from former Councils, current school boards, and citizens groups. People like me, who have been asking questions, challenging ideas, or pointing out that maybe, just perhaps, everyone at City hall isn’t corrupt to the core, have been called Astroturfers and Goons (which is strange, as I have never had a conversation with Wayne Wright in my life, other then the couple of times I have delegated to council).
Right from the start, this campaign has been pure politics. That is not necessarily a bad thing; you can’t have an effective democracy without politics. Politics is just the art of convincing people that what you want to give them is what they want.
To that end, the City played the politics here rather passively, and if, by some miracle, James Crosty gets his 4500+ signatures, the City will have to look back at how they may have communicated better through this all. If the campaign is not successful, then maybe the City played it right. Maybe.
I was with a group of friends talking about this last week over beers, and there was quite a variety of opinions about the Tower, the Loan, the referendum. We couldn’t decide if this was a good thing or not – is this just making chaos for the purpose of making chaos? Is there’s higher ideal here we can get behind? What are the outcomes? A friend shut me up with a simple question: “what do you want out of this?” I couldn’t answer, which is probably why I hadn’t yet given James my signature on a form. I need to have some idea what the outcomes will be of my actions, I don’t like to act first and ask questions later, just not my style in life.
Over the last two weeks, I have decided that all I want out of this process is for that light to be cast on the process: on the Community Charter and the Alternative Approval Process. It is the same thing I wanted last year when the New West electrical utility used the same process to get your approval for a $25 Million loan to support a new deal that guaranteed revenues to BC Hydro at the Risk of New Westminster utility users. We agreed to that deal through the Alternative process, even if most of us didn’t even know it happened.
I’m OK with the Tower (and the inherent risk), because I’m bully about the future of Downtown and like the path we are taking in this City. I’m OK with the creative financing that allows the City to leverage a 1.7% lending rate to its maximum advantage, because I want the City to use it’s financial advantages like a good business would. I’m OK that the City needs to have the ability to negotiate the terms of complicated construction and cost-sharing contracts, and that those negotiations sometimes go sideways. What I don’t like is that the City (in complete compliance with the law) attempted to push through the largest loan in its history through a reverse-billing option on a short timeline in the middle of the summer with the minimum of notice to the public, and apparently hoped and prayed that no-one would notice.
They didn’t count on James Crosty, and his remarkable campaign skills.
They got caught out, and now the process, if nothing else, is in the light. So in a way, it doesn’t matter if James gets his 4500+ signatures. He has already won. And the electorate of New Westminster is better for him having put up the fight, regardless of whether you agree with his position.
If there is a referendum, I am voting FOR the Bylaw.