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Lone bidder asks city for $8.5M for trade-show hall building costs
http://www.ottawacitizen.com/news/Lone+b...w+hall+building+costs/3099967/story.html
BY NECO COCKBURN , THE OTTAWA CITIZEN JUNE 1, 2010 10:05 PM
The lone bidder on a project to build trade-show space near the airport wants the city to contribute about a quarter of the construction costs and guarantee the rent on the facility for several decades.
Shenkman Corp., one of the partners in the Lansdowne redevelopment project, hopes to build a modern trade-show space on 11.57 hectares of land near the airport.
The corporation is looking for the city to contribute $8.5 million of the $39.2-million capital cost of the new exposition hall, according to a city staff report.
The report went before city council’s corporate services and economic development committee on Tuesday.
The Aberdeen Pavilion, Civic Centre and Coliseum at Lansdowne are the city’s best trade-show spaces right now, but the redevelopment plans mean the trade shows would have to move.
If council approves Lansdowne’s redevelopment, construction could start next spring, and city staff want a new trade-show hall to open no later than March 1, 2012. Shenkman’s proposal says its new building could be open by early January 2012.
It has an agreement to lease Ottawa airport land near the Airport Parkway and Uplands Drive until January 2057 and has provided plans for a 218,000-square-foot exposition hall with more than 2,000 parking spaces, according to the staff report. It’s expected the development would eventually include a 90-suite hotel.
Shenkman proposes putting $8.5 million into the project, while the airport authority would provide $1.5 million. The remaining $20.7 million would be borrowed.
The city would have to take on debt to pay for its share, the report says.
The committee referred the staff report to a special council meeting on June 17, when other Lansdowne-related reports will be discussed.
Some councillors complained they received the trade-show report at the last minute before the committee meeting, but were told there would be a chance for public input and further discussion about the trade-show hall during that council meeting.
A fairness commissioner has found the bidding process used for the trade-show space was appropriate. City staff say 39 companies downloaded the request-for-proposal document, but just three went on to meet with city officials in “commercially confidential” meetings.
Only Shenkman submitted a formal application, which met all mandatory requirements and “well exceeded” technical requirements, according to city staff.
Kanata North Councillor Marianne Wilkinson asked staff to investigate after she had heard of one group that was interested in submitting a bid, but was incorrectly told by city planning staff that their site didn’t meet zoning requirements. The group didn’t explore the issue further, Wilkinson said.
Negotiations on a potential agreement with Shenkman have just started. However, it appears likely the city will basically promise to guarantee the leasing of the facility in order to help get the financing needed, but city staff will make clear it’s up to Shenkman to cover debt payments and any operating losses.
The committee also received a report on the economic and social benefits of a new trade-show hall that says the proposed facility should at least match the economic impact of Lansdowne Park’s trade-show space and should exceed total visitor and exhibitor spending of $7.47 million by its fifth year, which is 25 per cent more than current spending at Lansdowne.
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