I am crazy busy these days, and I’m not feeling that good right now. Work and other life-like things are causing me a little bit of stress at this moment, and I am about to take off for a little vacation, before which I need to get a lot of things done. Also, there is apparently some sort of holiday coming up which requires preparation and such. So blogging will be a little light this December. I need to concentrate on real life, Ms.NWimby, and trying to get a little exercise and reading (for sanity preservation), so my writing time is something that might have to give a bit for a short while.
To hold you, my dedicated readers (Hi Mom!), here are some short takes on the local news stories that seem to matter right now, and yes, I’ll keep them short:
1) Pattullo Traffic resulting from Port Mann tolls: It is too early to tell anything. At this point we have anecdotes, and the plural of anecdote is not data. We will all have inkling feelings traffic is a little better or a little worse, but the true impacts will not be known until well into the new year, when we get some data from the City and/or TransLink. Good to see New West and Surrey are having Council-to-Council discussions about the fate of the Pattullo though. My only question is what too so long.
2) The proposed coal terminal in Surrey: The alleged dust concerns bother me none: worse stuff than a little coal dust will enter our airshead from the BunkerC and diesel burned by the boats and trains transporting the stuff, and the facility will not be used for storage, but just for direct transfer from the trains to the barges. Still, the stuff is kind of nasty as far as any spills into the River, and the idea that we are happily shipping lower-grade thermal coal to be burned in far east power plants seems to thumb a nose at the idea of Anthropogenic Global Warming. Profiteering from Climate Change while saying it is a problem and “someone else should address it” is a bit, I don’t know, unethical, isn’t it?
3) The latest revelations about the MUCF deal going sour. Apologies to Chris Bryan and all the Twitteratti who have been all over this, but this (seems to me) much ado about very little. Admittedly, I have only given a quick read to the heavily-redacted document attained by FOI and posted by the NewsLeader, but it appears to outline the pre-Memorandum-of-Understanding phase of the negotiations between UPG and the City. Seems the developer made an initial offer to build the entire building and then give the semi-finished
MUCF Anchor Centre over to the City, at a cost to the City close to the $35 Million earmarked for the project in the DAC funds.
At first pass, this sounds like a much better deal than the $94 Million the City is currently estimating the complete building will cost. $35 Million is definitely less than $94 Million. But we are not comparing apples to apples here.
Remember this drawing? The MUCF sandwich: this is what the City is budgeting: $12.5M for a three-level car garage, $41.5M for the completed
MUCF Anchor Centre, $33M for the Office Tower, and $7M for “fitting out” the tower once a client is found. The City now has complete say over all aspects of design and layout, and once built, the City will own all of it – the $94 Million building, the land it sits upon and the air it sits within. Much of that will be a sale-able asset, or will return a revenue stream.
Although much of the financial detail is redacted, we can develop a pretty good picture of what the deal offered by UPG looked like from the document in the story.
The City gives UPG some undisclosed amount of money, which is apparently close to the $35 Million available from DAC Funds (7th bullet point, Executive Summary). For that, the City gets the shell of the
MUCF Anchor Centre. Even the fit-out and appointment of the MUCF Anchor Centre is at the cost and risk of the City (see third paragraph, page 23), and not part of the guaranteed cost. The City does not get the two-level parking lot: it belongs to UPG, and if the City wants their own level of parking they need to pitch in another $7 Million. (see note 5 on page 22). The City cannot even dictate the parking rates in its own MUCF Anchor Centre. The City would still own the land under the MUCF Anchor Centre, but not any of the air parcels for the two levels of parking or the tower. Actually, they were bound to leasing some of that air space for the exclusive use of the Office Tenants for $1 a year, for perpetuity (Point 7, Page 27) and keeping the rest of the airspace free for perpetuity to protect the views of the tenants, for no compensation. The City would need to pay for the demolition of the existing structures and takes all of the demolition/ excavation/ contamination risk; Even the risk of changes in construction costs or delays in schedule fall on the City, not UPG (See note 8, page 25)
Another way to look at this deal: UPG gets to build and outfit a $40 Million office tower building, $5 Million worth of parking spaces, and two retail outlets (the restaurant and coffee shop) on land they are given for free in the centre of an urban downtown adjacent to a busy crossroads and a SkyTrain Station. Their timing, construction and marketing risk are externalized, to the point where they even get final approval on what is built across the street (point 8, page 27) while they maintain the right to make all of the contracting decisions. For this, they have to build the City a $35 Million building, but the City is going to pay them the $35 million for that building! So their first sale is guaranteed by the City!
Yikes. With all due respect to everyone involved, suddenly I’m not surprised the subsequent attempts by the City and the UPG to complete a deal based on this proposal didn’t work out. I cannot imagine what the critics of the failed deal would have said if they saw this deal signed by the City.
Actually, I can imagine. I just imagine it being very similar to what they are saying now.