St. John’s exploring $700,000 IceCaps subsidy

Daniel MacEachern
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Team’s extra year in St. John’s comes with higher costs

The City of St. John’s has tentatively agreed to subsidize the St. John’s IceCaps with $700,000 over the next two years.

Mile One Centre.

City council, at its weekly private meeting to discuss personnel and legal issues, agreed to a request from the team to offset the cost to stay in St. John’s an extra year before it moves to Thunder Bay to be closer to its parent club, said Coun. Dave Lane.

“The Winnipeg Jets gave a year extension to the IceCaps, and part of the agreement to cover off the cost — because they were going to leave for financial reasons — they said, ‘It’s going to cost (IceCaps) $1.5 million more.’” The IceCaps then approached the city to ask for help offsetting that cost.

The suggested agreement, agreed to by councillors at Monday’s private meeting, was $350,000 a year for the next two years, said Lane. The issue has been debated at the last two private meetings, he said.

“The issues were, do we have to pay this? If we don’t, what does that mean?” said Lane.

Coun. Danny Breen, chairman of the city’s finance committee, said the city is looking at reducing the cost of the Mile One lease, “recognizing, of course, the significant economic and non-economic impact of AHL hockey in the city.”

Lane said the vote to explore the subsidy was not a unanimous one, but declined to reveal how the vote broke down. The big concern, he said, was effectively subsidizing a for-profit company.

“The rationale was basically that having hockey at Mile One is such an economic generator that it’s kind of the cost of doing business, in a sense,” said Lane.

He said he’d prefer to see more than just keeping the IceCaps at Mile One in return for the city’s subsidy, but added the IceCaps are increasing their investment as well.

“And we’re a partner with them, so that’s the rationale there.”

The city has also asked St. John’s Sports and Entertainment, which runs Mile One Centre, to explore ways to raise revenue to offset the subsidy.

The City of St. John’s subsidizes Mile One every year — in 2008, it was $2 million. The city had reduced the subsidy to $750,000 in 2013, but raised it again for 2014 to $1 million. The subsidy is variable and based on revenue and expenses in a given year.

“If we can get more concerts in — and it’s easier to get concerts when you have steady staff, which they’re able to keep when you have a hockey team — then at the end of year, if we’re fortunate and work hard, we can actually offset the cost just by having one major player come in and do three concerts in a row,” said Lane.

“We want to work with them to make sure that the lease arrangement allows us to have professional hockey here in the city, still keeping in mind that we have to pay the bills at Mile One,” said Breen.

Lane said it was a “tough decision” to agree to pursue the subsidy, and because it would be part of the city’s contract with St. John’s Sports and Entertainment.

“Because it’s part of a contract negotiation, it is considered a legal issue,” said Lane, who added the subsidy — as part of the St. John’s Sports and Entertainment budget — will still have to be approved by council at a public meeting.

“We will bring it to the public chamber when we approve the budget for St. John’s Sports and Entertainment,” he said. “My understanding when we voted was that we were basically giving approval for St. John’s Sports and Entertainment to accept the offer and look into ways to offset the cost.”

Breen said he’s also concerned that a confidential internal memo was leaked to the CBC, which broke the news of the subsidy Monday evening.

“We have to deal with issues in the private meeting — private meetings, we’re restricted in what we can discuss. They’re usually human resource matters, intergovernmental matters, legal matters. Contracts, leases, such as this,” Breen said. “So the information that we’re given, it’s important that it is confidential, because it’s information and recommendations from our staff on those issues. When that gets outside the council meeting, especially prior to a final decision being made by council, or announced by council, that’s very difficult.”

Meanwhile, the IceCaps consider it a done deal. A statement released by the team Monday night says the city has agreed to a reduced rate of rental for Mile One Centre.

“Previously, the IceCaps were paying one of the highest rental fees of any franchise in the AHL; a reduction in that rate was critical to offset the significant increase in costs to keep the Winnipeg Jets (the IceCaps’ parent club) in the city for an additional year,” says the statement. “In fact, the reduced rental fee was essential in order to keep the Jets’ AHL franchise in the province.”

The team also takes issue with use of the word “subsidy.”

“The reduced rate is not a ‘subsidy’ as has been reported, since the IceCaps will still pay a very substantial rental fee for the use of Mile One,” says the statement. “A subsidy implies the organization will receive money from the city to operate the team, which is simply not the case.”

In fact, a subsidy can be in the form of direct financial support, such as cash, or indirect support, such as a tax break or a reduced rent.

Twitter: @TelegramDaniel

Organizations: IceCaps, Winnipeg Jets, CBC

Geographic location: Thunder Bay

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Recent comments

  • SayWhat
    September 16, 2014 - 15:42

    To..Brian Coote...Time now for the annual, who is this guy..It was tried last year and it failed miserably. But you don't really follow me. I always back it up with facts. For example, I commented on the day of the extension announcement. I complained that no one was reporting in Newfoundland that True North wanted to move the team to Fargo, North Dakota..The reason I complained is because the relocation to Fargo was being reported in the Winnipeg Free Press newspaper. Want more..the Islanders moving their farm team to Long Island is no secret..Go on the internet and read about the Ratner Group and how they won the bid against MSG to refurbish the arena that will be vacated by the Islanders. As for being bitter because I don't have a job?????? I am assuming you mean the Ice Caps..and as I recall that was the same feeble argument of trying to find out who I am last year...Please tell me..who am I because the last one who guessed in public was oh so very wrong. Please remember the Ice Caps are a money losing operation. Don't believe me? Read Robin Short on June 21st. One more thing, facts about True North getting about 2 million a year is in the public domain..They were already getting in access of one million. Now add another 750K as reported in this newspaper and we are heading towards 2 million. One thing I got is a good memory..or maybe a good laptop that stores information.

  • M. Atkins
    September 16, 2014 - 12:32

    Disgusting but not surprising. We'll also be paying increased water taxes for Dannyland -- not much news on that, but there was something about special pumping station because the building site is above the water table or some such thing. All's very quiet on that matter as well. More secret meetings perhaps?

  • sc
    September 16, 2014 - 12:10

    It must be nice living in a city where the city council cannot think of any better way of spending tax dollars than this. Of course we don't need better roads, snow removal, subsidised housing, garbage / litter removal, street cleaning, downtown revitalisation projects etc. etc. Next we'll hear how the city has no money and needs to raise taxes to make up for the $700,000 it's giving away. It's too bad that this city council doesn't care about the interests and needs of its inhabitants.

  • SayWhat
    September 16, 2014 - 10:47

    Wow..What a ransom to keep the team from going to Fargo, North Dakota...As I understand it, True North will rake in close to four million dollars over the next two seasons without any risk. Also the lease holder has to pay for a second assistant coach, probably Jason King. As for the future, the new six team Pacific Division means St.John's is out of the loop. As for the two NHL teams coming to St.John's, Ottawa just signed on for another five years in Binghamton. As for the Islanders leaving Bridgeport. Yes they are leaving, but for Long Island once the Islanders move to Brooklyn.

    • Brian Coote
      September 16, 2014 - 12:09

      Gee Mr. Hockey Know It All Thanks for all the Scoops about the New 6 Team AHL Pacific Division, the new Franchise in Fargo, etc. Whenever something about the IceCaps comes into play, You come out to play, locked in front of Your Laptop without signing your name, bitter because You don't have a job, sipping on a Latte chomping on an Apple Fritter..Probably Jason King ? Back Up Your Facts with Your Name Mr. Hockey. Now jump over to the CBC Site and join the rest of the No Name No it Alls

  • JRM
    September 16, 2014 - 10:02

    Why do other municipalities not want to amalgamate with St. John's? This is a fine example of why. 700k corporate donation, arranged in secret. Municipal Affairs needs to investigate this council.

  • gerry
    September 16, 2014 - 09:42

    'subsidy'; defn: free money - no pay back required....though I'd like to see the Ice caps stay on the Rock, I'm thinkiing 700 grand could be better spent elsewhere....and (all forms) of government tell us it's broke and there is no money in the coffers because?...

  • Dolf
    September 16, 2014 - 09:16

    Breen's payback to Danny. Never thought Danny would be like my shirt tail, always on d'bum. You can bet Hann was all over this too.

  • Glenn Stockley
    September 16, 2014 - 09:13

    the ever altruistic sainted Danny Williams has managed to pilfer another $ 700,000.00 from the taxpayers of St. John's to make sure profits are healthy for his hockey team....shame on city council...special shame on Dennis O'Keefe for his political partisanship.....

  • John Q Public
    September 16, 2014 - 08:15

    What a load of crap!!!!!!! It is not being called a subsidy simply because the owner of the team is a fitly rich former politician. A reduction in rent of $700,000 means that amount stays in the teams pocket and it never makes it to the cities revenue account. It is $700,000 that the team and or its owner can use for his own purposes and it is $700,000 MORE that the taxpayers of the city will have to come up with possibly. Heads should roll!!!!!!!!!!!!!!!!!

  • Profit
    September 16, 2014 - 08:09

    Is the city giving the subsidy so Danny can keep a profit. Where are the financial statements? If the team is making a profit, there is no need for a subsidy. If the city gives them a break, everybody should get it.

  • Oh my
    September 16, 2014 - 06:37

    So Danny W got his way after pitching a hissy fit over this earlier this year. Shockin'.

  • W Bagg
    September 16, 2014 - 06:16

    So I guess the economic and non-economic benefits that promoters bring to the downtown when they promote a music concert will allow them to get a reduction in rent from Mile One too.

  • Political Watcher
    September 16, 2014 - 06:14

    Dannys buddy Breen says it was offered to get the extra year. Where else were they going? Thunder Bay is not ready to take them and I can't see another city giving them much to play for one year. I guess this is Breens reward for Danny for helping him out last by election.

    • Anna
      September 16, 2014 - 12:11

      Another giveaway for this Council and now they are won't say who voted for this. A quick fix for this would have been to increase the price of the hockey tickets. I don't go to the games and I don't see why I have to subsidize this. This looks terrible for Mr. Breen as Mr. Williams was his shadow when he ran for the PCs. You would think with a Justice building named after him, Mr. Williams would be too embarrassed to look for a subsidy.