ST. JOHN'S, N.L. — St. John’s Sports and Entertainment (SJSE) chair and city councillor Jamie Korab responded Thursday to the idea of privatizing Mile One.
Last week, Newfoundland Growlers owner Dean MacDonald showed architectural renderings of an overhaul he’d do on the nearly two-decades-old downtown arena if he could purchase it - a desire he’s been expressing for more than a year.
The Telegram has been requesting comment from the city about MacDonald’s plans since Monday. On Thursday, Korab issued a news release.
“If we were to engage now with one potential owner, we could unfairly disadvantage a competitive bidding process. So, we will not be meeting with Mr. MacDonald or any other potential owner for Mile One." — Jamie Korab
In it, he stressed the competitive process that would be required if the city and SJSE considered a privatized model.
“If we were to engage now with one potential owner, we could unfairly disadvantage a competitive bidding process. So, we will not be meeting with Mr. MacDonald or any other potential owner for Mile One,” Korab said in the news release.
He said a public consultation process would also be required.
Consultant hired... again
For now, the city and SJSE have hired KPMG — the same consultant who did the 2019 report on the possibility of third-party management of Mile One — “to quickly provide advice for us on the sale/privatization model,” said Korab.
He said the consultant’s findings will be shared this fall.
Korab highlighted four points from the 2019 report which would need to be considered if they sold the arena.
First, he said the consultants couldn’t find an example of any municipally-owned medium or large-capacity arena having been sold or leased long-term in Canada.
I've been asking the city all week to comment on this, and this morning media was sent this news release re: privatization of Mile One. #sjpoli #nlpoli pic.twitter.com/CNRpzvSYm5
— Juanita Mercer (@juanitamercer_) September 24, 2020
Secondly, he noted the loss of control that would come with selling a public asset — that new owners could potentially change the use of the facility, leaving the city without a large sports and entertainment venue.
Thirdly, he emphasized the economic benefits of having the arena in the community.
Lastly, he said owning Mile One allows the city to bid on national events, such as the Briar.
“If we were to privatize, we would have to consider how we would attract those events and what kind of offers we could make to potential renters, given that we would no longer control the main facility.”
However, he said none of those factors prevents the city and SJSE from considering privatization.
First KPMG report said Mile One subsidy was higher than at comparative facilities
That 2019 KPMG report found there was no clear mandate, or short-term and long-term business plans to guide SJSE, resulting in “general confusion and mild friction” between the city, the SJSE Board of Directors and SJSE management, the report said.
The report also found the amount of subsidy required by SJSE from the city was the highest among the comparative municipalities considered in the report, which looked at venues in Moncton, N.B., Halifax, and Guelph, Ont. among others.
For example, in 2017, the subsidy for Mile One was $2,131,212, which was $1,146,760 larger than the average for all of the compared municipalities.
The report said it was unlikely that any form of operational change, other than an outright sale of the SJSE facilities, would completely eliminate some level of city subsidization.
Meanwhile, Korab said the SJSE board and city council assure St. John’s residents that any decision to sell Mile One “will only be made with the best interests of residents in mind and using proper due diligence, including the retention of professional advice and a thorough examination of the many relevant factors impacting such a decision.”
