Like the main players in a tangled relationship that never really seems to be going anywhere, the City of St. John’s and the professional sports teams that are the main tenants of Mile One Centre have appeared to have hit another rocky patch.
On Tuesday, the City and St. John’s Sports and Entertainment Limited (SJSEL), the city-appointed board that now oversees the operations of Mile One, issued a press release saying they were concluding talks with regards to memorandum of understanding (MOU) signed in March of 2018, an outline that held out the possibility that the ownership groups behind hockey’s Newfoundland Growlers and basketball’s St. John’s Edge would combine to take over management of the 18-year-old downtown facility.
Mayor Danny Breen and Coun. Sandy Hickman, who is on the SJSEL board, met with reporters Tuesday and said the board had received a proposal from the sports teams last week regarding their taking over Mile One management, but that after consideration, it had been turned down, mainly because it called for no reduction in the city-paid seven-figure operating subsidy that makes up the difference between the revenues derived from the rink and convention centre and the cost of running them.
But Dean MacDonald, the Growlers’ majority owner, said the suggestion a proposal had been made was “ridiculous,” because SJSEL would not provide information on matters such as food and beverage costs.
“You couldn’t call it an actual proposal, because we weren’t given what was required to make a real legitimate offer,” said MacDonald. “We attempted to do our due diligence, talking to other teams and other buildings across the continent to prepare ourselves. But for months, we’ve been begging (SJSEL) to give us the basic financial information that we needed. We heard the numbers around hockey and basketball, but that’s what we already knew.
“There’s more to that in running that building, but they wouldn’t even tell us what it costs them to make a hamburger.
“So we just told them that without the numbers we needed, without us knowing all the details of what we might be getting into, the subsidy would have to stay the same. That was it.”
But Hickman sees it differently.
“We have been discussing this with them over the last while … lately we have been talking a lot, the board’s put in countless hours,” he said. “We have reviewed it, we’ve come up with whatever, we gave a lot of information to them so that they could do some due diligence to prepare the proposal. The proposal simply did not meet what we needed …
“We would have maybe preferred a little more detailed submission at this point in time, but the only concern we have really is the subsidy.”
The proposal simply did not meet what we needed …We would have maybe preferred a little more detailed submission at this point in time, but the only concern we have really is the subsidy.” — Coun. Sandy Hickman
MacDonald suggests that a year-and-a-half ago, as the teams, SJSE and the City worked — sometimes contentiously — on an agreement to bring the Growlers into Mile One as an ECHL expansion team and to share tenancy of the building with the Edge, that the pro clubs actually came close to working out a deal to run the building.
“Back then, I thought it (the teams taking over Mile One management) came close to happening, but it was decided to take a year and concentrate on getting the Growlers up and running and come back to (the facility management plan) later,” he said.
But MacDonald said he now doesn’t believe the City was ever really serious about giving up control of Mile One.
“They talked like they were, but their actions don’t back up their talk and that’s mind-blowing to me,” said MacDonald, “especially when you consider that hockey and basketball are the biggest contributors to keeping that subsidy down. Without us, that deficit would be much, much higher.
“They keep treating us like they don’t want us there, but we’re not going anywhere.” — Newfoundland Growlers owner Dean MacDonald
“They keep treating us like they don’t want us there, but we’re not going anywhere.”
There also appears to be disagreement about the size of the subsidy. MacDonald gave the number at $2.2 million, not taking into any shortfall at the convention centre.Hickman said it’s is around $1.8 million, but noted it has changed over the years “and it could fluctuate with or without basketball and hockey, too.”
MacDonald said he sees the City’s behaviour with regards to the now-kaput MOU as actions made without good faith and says he will be pursuing legal action.
When asked about that possibility, Mayor Breen said he couldn’t comment, noting the sports teams and SJSE will still have to work out new lease deals in order for them to play out of Mile One next season.
“Our goal is to work with the teams to negotiate a lease, so that we can move forward into the next season, and that’s where our focus is right now,” said Breen, who is hopeful of long-term leases.
MacDonald has long claimed the Growlers’ lease deal in their inaugural season was “a terrible one,” and that the team had considerable losses despite its march to a Kelly Cup championship last month. He also said the Edge lost money even though their attendance was by far the highest in the National Basketball League of Canada in 2018-19. However, he said his team accepted the initial arrangement, in large part because of the understanding that they would be working to take over Mile One management.
Now they’ll have to hammer out a new deal with someone they could be taking to court.
“As much as anything, I am approaching this as a taxpayer because as a taxpayer, I want to know what’s going on with that building and with the way it’s being run,” said MacDonald.
When asked why the City and SJSE decided to go public with what seems to be another falling out with Mile One’s primary tenants, Breen said it was to put an end to speculation.
“There have been a lot of questions … about what was happening with the operations of Mile One, certainly questions as well from the staff there, and from the general public,” he said. “ I know I get the question asked a lot, so as soon as the decision (to end the MOU) was made by the board and it was put to council, then we felt it was our responsibility to inform the public as soon as we had reached a decision.”