Kingston Concerned About the LVEC
Currently known as the "KROCK Centre"
Formerly the "Kingston Regional Sports and Entertainment Centre" or KRSEC
Formerly the "Large Venue Entertainment Centre" or LVEC
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The Task Force Report shows the following sources for funding the LVEC at the proposed location:

1.  Estimated cost of building: $ 25 – 30 Mil. (Changed to $28.5 Mil. in later documents). The same cost is estimated for the Memorial Centre as well as for the Anglin Bay location. This estimate is erroneous, since the Anglin Bay location will require extra funds for:

• Land acquisition of the privately owned Marina and Metal Craft;
• Brownfield cleaning (known as an expensive operation)
• Wellington Street widening for at least to Cataraqui Street to allow truck access during and after construction time.

The total cost of building is presently compounded by the fact that the new Council decision exempts the developers from the development costs. Developing the LVEC will need additional taxpayers' money to implement the necessary utilities, quite significant for a facility of this size.

2.  Asset sale: Sell the Memorial Centre grounds for an amount of $ 4 – 6 Mil, which will all be allocated to the new LVEC.

This again is incorrect, since no funds are allocated for replacing the facilities of the Agricultural Society, the swimming pool and the skating rinks presently used by junior hockey, seniors and kids. All these facilities and other on-site recreational facilities will have to be replaced, and the Task Force acknowledges this fact, but at what cost?

3.  Tax Increment Financing: The incremental property tax of estimated $ 7- 8 Mil. be used to finance the LVEC, once fully developed.

There are problems with such financing, since:

• The new homes/developments will use City utilities and appropriate portions of the tax should go on to cover school funding. This money will have to come from taxpayers;
• Timing of required funding for the LVEC and tax money availability does not coincide. The LVEC will require money at the early stages of construction, while the Memorial Centre will require re-zoning (not a short process), construction, most likely in stages, and occupancy.
• Extra taxpayers' money will be required for the initial installation of utilities, since the City Council exempted the developers from the development tax, used specifically to offset such expenses.

4.  Current memorial Centre Operation Deficit: The operation deficit of $ 150 K/year should be directed into financing the LVEC.

This is an astonishing proposition: deficit financed by taxpayers for the Memorial Centre becomes source of income for the LVEC. Let’s keep in mind that this amount has to be financed by the taxpayers.

5.  Federal and Provincial Grants: The Task Force Report acknowledges that funds available from these sources are "limited at this time". Since the date of the Task Force Report it has become obvious that no funding will be received from the Provincial Government for its present term, so the estimated $ 5 Mil. will not be forthcoming.

6.  Green Grants: It is extremely doubtful that such grants will apply for the present recommended location. According to the existing drawings attached to the Report, the location covers a big section of Douglas Fluhrer Park, so the City will lose some of its green space.

7.  Trillium Grant:: Even the Task Force Report believes it premature to estimate the validity and amount from such a source. At this time let’s just note that Trillium funding is available only for non-profit organizations. A public / private partnership, contemplated by the Task Force, would not be eligible.

The LVEC is estimating a profit from the first year of operation: this is virtually unheard of in a development of this type. (See LVECs in other cities).

8.  Downtown Business Improvement Area (BIA). $ 3 Million have been promised to be raised by BIA. Since some of the money comes from additional tax on hotel accommodation, this amount may, or may not, materialize.

9. Potential Capital Financing Model provided in the Task Force Report:
 
 

In conclusion: Not only is the total estimated cost highly underestimated, ignoring added costs as per Council recent decision to void the developers’ development tax, but the identified sources are either out of sync (Sale of Memorial Centre site), or non-existent, some potential and some erroneous.

The forecasted operating Profit is unrealistic: it is based on using the LVEC, among others, for convocation/graduation ceremonies (Queens is building its own facility and, per Task Force Report, appears unwilling to use the facilities at LVEC) and meetings and convention/conference plenary sessions (it appears that the new hotel planned for Block D will include such a facility). Since the documents used for estimating the profit are confidential, no further comment can be made.

A PROPER BUSINESS PLAN WILL NEED TO BE ISSUED IDENTIFYING CORRECT COST, PROPER SOURCES OF FUNDING AND REALISTIC REVENUE.

Last updated 30.09.2004