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Tuesday, February 8, 2011

Whose logo will be on City Hall?

No major Canadian city rents its City Hall. Should this be an option for London?

At their meeting last week, the Finance and Administration Committee (FAC) members received a consultant’s report on options for City Hall which had been requested by the previous council. Before that term ended, we had had a number of in camera meetings to examine some opportunities and we wanted to be able to place them in some overall context.

For many years now, our forty year old building has been in need of upgrades and renovations. Some of these, such as removing asbestos or replacing the roof, are essential. Others will allow for better functioning of the available space and greater energy efficiency.

But renovations are costly; to do the entire building, one floor at a time, would cost approximately $30 million. And every time you do one floor, you run the risk that asbestos will be disturbed in the ceiling of the floor below.

As well, there is the problem of overall space requirements. At present, to meet those requirements, the City leases space at seven locations in addition to the two buildings, 300 Dufferin Ave and 267 Dundas St, it currently owns. All but one are owned by Shmuel Farhi of Farhi Holdings, for an annual rent well in excess of $2 million. Leases in these buildings will expire sometime between 2012 and 2029.

During the four years I was on Council, each time we had an issue about possibly purchasing property such as the Bell Building, before we even had a chance to discuss it, we would receive an email from Mr. Farhi letting us know that he thought we shouldn’t be buying property, he’d be happy to buy it and lease it to us. He always seemed to know what was on the in camera agenda before we did. And Mr. Farhi can be very persistent.

Two members of Council always had a conflict because Farhi was their landlord. Another councillor had to give up her studio because Farhi had bought the building and she didn’t want to lose her vote.

So it is not surprising that a number of us were very clear that we believed that the main seat of municipal government should be owned by the people, not a private landlord.

This position is shared by the 20 large Canadian municipalities surveyed by the consultants. Most prefer ownership to leasing, and all own their main seat of government, although additional space may be leased since most also had multiple downtown locations.

At the FAC meeting, this position was reiterated by Ward 8 Councillor Paul Hubert who stated the he was “not interested in Option 3”, the leasing option. His motion requested a report from staff on the options along with a funding plan and a plan for a public meeting. When staff asked for a prioritization of the options, Hubert included in the motion the condition that the seat of government should be owned, not rented. When it was suggested that Council might want to look for opportunities to partner with other organizations such as Fanshawe and UWO as part of a downtown initiative, Hubert said, “Add that too”. The motion was unanimously adopted by the committee members including the Mayor and Councillors Henderson, Hubert, Bryant and Branscombe.

Unfortunately, the motion in the written report that was on the agenda last night did not include the public ownership condition. That sometimes happens when motions are cobbled together at a meeting rather than written out in advance. The discrepancy was brought to the attention of the clerk prior to the Council meeting and a revised motion was distributed at Council reflecting the addition.

But before that motion could even be brought forward, the Mayor proposed as an addition that a “summit” of players and stakeholders be created to bring potential partners together. This was quickly endorsed by Ward 3 Councillor Joe Swan who reminisced about the fine work that the Millenium Committee, on which he served in the late 90s, did in getting downtown projects like the JLC, the Market and the Central Library off the ground. His big question: How do we get the private sector to the table to ensure that we get assessment growth?

Ward 6 Councillor Nancy Branscombe, however, sounded a note of caution. “It makes me nervous,” she said, “when we talk about getting all the players together.” She wanted to know who the “players” would be. “Is it by invitation only? Who will be invited?” She was probably thinking of the “economic council” recently put together by the Mayor without any reference to the economic plan previously endorsed by Council. “The devil is in the details,” she warned.

The debate was hobbled by the flagrant disregard of procedure that has become characteristic of this Council. Or perhaps it is simply ignorance on the part of some of the members of how matters must be handled. Unfortunately, they show little interest in learning. In the end, the motion was divided into two parts, the first dealing with the creation of the “summit” and the second with the proviso of public ownership.

The first motion passed easily, although Ward 5 Councillor Joni Baechler expressed concern that the Planning Department had been working on the Downtown Plan for a year and a half and she did not want to see that work compromised. Ward 14 Councillor Sandy White also expressed reservations about who would be the chair of the proposed summit. The mayor identified Councillor Bryant, as she is the downtown councillor and vice-chair of FAC.

The second part, dealing with ownership of the main seat of government, had a more difficult ride. Although no one said flat out that they wanted private ownership of a new City Hall, many argued for considering “all the options” and presenting them to the public.

In the end, the results were all too predictable. Despite his support for public ownership of City Hall at the FAC meeting, the mayor voted against it and Councillors White, Denise Brown, VanMeerbergen, Henderson (who had supported it at FAC and give reasons for his change of heart), Orser quickly followed suit. So did Councillor Swan, although he had previously indicated to his colleagues that he would support public ownership. That left Councillors Bryant, Usher, Matt Brown, Hubert, Baechler, Branscombe and Armstrong in support of the public option. Councillor Polhill was absent. The motion lost on a tie.

We have a once in a lifetime opportunity for the City to refresh its vision for City Hall. A new city hall will not only meet needs for housing staff and facilitating the delivery of services to citizens, it should be a place where the public gathers to express their concerns and exchange ideas, and a symbol of our s civic pride. We should be autonomous in our own house, on our front steps and on our streets. That should not be “negotiated” with a private landlord. Being a tenant in the City does not provide for that kind of autonomy. Nor does it encourage civic pride or provide a legacy for future generations.

Early in my term on Board of Control, Council entered into a 20 year lease with the City’s largest landholder in order to save a heritage building from demolition. It turned out to be a lovely building, but at very high cost, both for the rent and for the subsequent maintenance.

I opposed the lease at the time because I thought we were locking ourselves into unsustainable obligations. But at least that was for supplementary space, not the primary seat of the government.

If we rent space from a private landlord, whose logo will be on City Hall?


Sandy Levin said...

Re lease or own city hall. The city either pays annual lease costs or interest costs on debt out of the operating budget (it would not make any sense to pay cash for a long term asset). So the question is, which has a lower cost over time. Do we want to pay off a 20 year loan (like at the JLC) at some point or be into a landlord for longer? As there are no write offs of rent costs against taxes as there would be for the private sector, why would a city rent its office space? We are already paying gross costs of $3 M / yr on rent now. We have a whole mess of finance folks at the business school - we should get an independent view.

ChrisD said...

I have long argued that the City should own its assets rather than leasing. I have re-thought that though as it always seems that in twenty years we need a different facility for room or funcionality. By the time the mortgage is paid will we be looking at a new City Hall yet again?