By Gerry Barker
Posted March 15, 2016
Last week, a delegation from the 10 Carden Street organization, requested council to help it purchase the former Akers Furniture store at 42 Carden Street. The group’s spokesperson, Julia Grady, described as a co-founder of 10 Carden Street, told the public services committee that the group had already raised $365,000 toward a goal of $400,000.
She offered no details of the composition of the $365,000 claimed to be raised so far. She did suggest to the committee that the city donate $50,000 by “investing” in a community bond. Ms. Grady also requested that council grant property tax relief for an undetermined period.
Does this open the door for other downtown entrepreneurs to receive reduced taxes because they are located downtown? That being the case, why don’t all the downtown businesses get their financing through the “Bank of Guelph?”
This is a ludicrous proposal that could only have been hatched by a political group of those community-minded citizens who are devoid of financial acumen and have a sense of entitlement.
There’s that word again, “investment.” It’s the description used repeatedly by Coun. James Gordon to defend the prolific spending of councils, past and present. These days, there is little talk by the administration about replenishing the drained city reserve funds or controlling spending.
Grady claimed that once renovations are complete, the value of the property would be $2.35 million without mentioning who owned the property and what were the obligations of ownership? Ms. Grady said the financing was composed of a first mortgage, capital grants donations and private sector investment.
She offered no details of the amounts, how much money was in the bank, what commitments were confirmed and who was involved.
Councillors Kathy Downer and James Gordon gushed over the proposal calling exciting and a good news story with many wins. That says so much for their understanding of financing.
In the centre of all this activity is Coun. James Gordon. He has been instrumental in creating a network of what he calls “community-minded” folks. For many years, Gordon’s greatest accomplishments were getting and using other people’s money to control the agenda of a city that is in financial stress over mismanagement of its treasure.
In this case, the committee voted to refer the proposal to the staff who are to report in June.
The timing of this is most interesting. In less than two weeks, Guelph will be without a General Manager of of Finance and Treasurer as Janice Sheehy leaves for greener pastures in Peel. This leaves a huge gap in analyzing this proposal that has more questions than answers. Also what ever happened to the internal auditor, Loretta Alonzo? Last we heard she was ill but that was almost a year ago. If she is still incapacitated, our best wishes go to speedy recovery.
The 10 Carden Street Space Inc. is a spinoff of the Guelph Civic League that supported the previous administration. In fact, James Gordon was a founder of the Guelph Civic League.
Here is a list of questions the staff should ask about this proposal
* Who is buying this building and what is the purchase price? Has the offer been accepted?
* What are the estimated costs for renovation?
* Is the University donating money toward this project?
* Has the first mortgage been approved? Who is the mortgagor? What are the terms of this mortgage?
* What are the capital grants and have they been approved and funds received? What are the sources of these grants and what are the terms?
* How many donations have been received and are they in the bank?
* How much money is there in the bank for this project?
* Which private sector firms are participating and how much are they donating?
* You have named a number of future tenants, what will the rents be for their space?
* Is there a business plan that shows cost of carrying a mortgage and additional funding, cost of utilities, taxes, staffing, insurance, depreciation and maintenance?
Without answers to these questions, it clearly demonstrates that the city should not participate. That community bond proposal means that the city must put up the money, service the cost of the bond and that increases the city debt. There is no plan to repay the city.
This is a major step for the political Left in this city. It is part of a careful plan to dominate city politics for years to come through an established network of supporters and causes.
Starting with the 10 Carden Street organization that purports to be non-profit, this project will provide space for Leftist sponsored organization such as: Guelph Neighbourhood Support Coalition composed of hand-picked organizers/activists in almost all areas of the city.
Other tenants include the Guelph Arts Council; the Guelph Wellington Local immigration Partnership; Out on the Shelf; Taylor Newberry Consulting; Wellington Water Watchers and Transformation Arts Guelph. Two of these organizations recently received grants from the “Wellbeing Committee.” Out On the Shelf received $5,700 while Wellington Water Watchers got $7,500.
The University of Guelph is to take over the fourth floor of the proposed building for students “doing new collaborations,” whatever that means.
Most people in the city know that you can’t ignore a $23 million mistake and in October 2014 they voted for reform and stronger management of the city’s assets.
Why is 10 Carden Street trying to provide a downtown hub for cultural and political groups to function? Why should the city even consider such a proposal that is so full of unanswered questions? Why didn’t 10 Carden Street present a business plan that justified what they are proposing?
Trying not to sound cynical, because I believe the proposal will probably go ahead with the council majority voting to pile on more debt. It’s classic action by the former administration. An example would be the indoor soccer dome that the city had to bail out a few years ago by guaranteeing the $500,000 mortgage because the non-profit soccer association running the operation couldn’t pay the bills.
Do we really need this proposal right now? Or shouldn’t we first pay the bills that were left by the previous administration?