Message from Sandy, Lindsay, Ian & VNV to supporters following the Development Board hearing on December 16, 2013

Many among us felt enormous disappointment at the conditional approval of the preliminary development permit on December 16.

The applicants have approval to proceed contingent upon developing a harm reduction plan in consultation with the Vancouver Coastal Health chief medical officer, with reference to the Kendall report, Lower the Stakes.

The down-side is that a massive casino floor has been approved, despite very strong community objection.  This is extremely troubling. In November 2011 Council re-zoned the BC Place site to permit a casino. For reasons that are obscure, rezoning was permitted for the square footage requested in the original proposal–or 114,000 square feet–notwithstanding that Council rejected additional slot machines.

Industry standard for a purpose-built casino is roughly 52 square feet per slot machine, or about 31,000 square feet for Edgewater, so re-zoning to permit 114,000 sq. ft was an unusual step.

In any event, Paragon applied for and got approval for a 71,000 sf casino floor space–40,000 sq ft larger than necessary.

Given the cost of land and cost of construction in downtown Vancouver, it’s not credible that an experienced commercial real estate partner would commit half a billion dollars to a project that’s more than 100% overbuilt.

In our view someone with authority has committed to these investors that more slots WILL be permitted, and that is most likely the provincial government, which always has the power to amend the legislation requiring municipal approval for additional slots.

Since we assume the provincial government will pursue more slots, while Vancouver City Council is in principal steadfastly opposed (and 2014 is an election year), our focus is firmly on those aspects of this development which fall under exclusive municipal jurisdiction.

We are encouraged by the mayor’s statement on the morning following the DPB hearing that:

Given (the)  public concerns…which were raised at today’s Development Permit Board meeting, I will ask City staff to identify further measures to prevent any expansion of gambling in the future on this site, including  amendments to by-laws or the Northeast False Creek Official Development Plan that will restrict the allowable casino floor space to the existing proposal.

This measure opens the door for us to take a more aggressive position to curtail this development.  The Kendall Report, which chronicles an alarming increase in gambling addiction following the widespread introduction of slots in BC, has indeed been a game-changer for this project.

Our focus now shifts to two issues: pressing this Council to follow through with its commitment to permanently prevent expansion of the casino, and supporting strong and robust conclusions by the Vancouver Public Health Officer respecting harm reduction measures for the casino.

We will seek, among other steps:

•  A covenant by the applicant not to increase slots and tables as a condition of its final development permit
•  Restriction of operating hours
•  Implementation of Kendall recommendations respecting alcohol service and ATMs
•  Public health review of casino operations and data gathering methods

The Mayor’s statement is a tribute to your persuasive arguments. Your dedication, commitment, energy and support keep alive the possibility that this project will never materialize in the form sought by the applicants.

We’ll be in touch as events unfold.

Sandy Garossino, Lindsay Brown, Ian Pitfield

On December 17, 2013, the City of Vancouver’s Development Permit Board (DPB) will review a development permit application for a new Edgewater Casino at BC Place.

On October, 17, the BC government’s Kendall Report, conducted by BC’s Chief Medical Officer Dr. Perry Kendall, demonstrated that gambling addiction is very widespread and that it has doubled over the past five years.

In light of the Kendall report, Vancouver Not Vegas and its supporters make the following requests of the City of Vancouver and its DPB:

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Vancouver Not Vegas asks the City of Vancouver’s Development Permit Board return the Edgewater Casino proposal to City Council for further review.

In October, BC Chief Medical Health Officer Dr. Perry Kendall issued a report warning that governments must do more to curb severe gambling addiction in BC.

In 2011 Vancouver City Council unanimously rejected the expansion of gambling licenses for Edgewater Casino, and approved the relocation of the casino to BC Place.

On December 17, the proposed Edgewater Casino goes to the Development Permit Board for approval. If it passes there, construction can commence before Christmas.

No further public hearings will be held.

In light of the Kendall recommendations and Vancouver’s Healthy City Strategy, Vancouver Not Vegas calls for the Edgewater application be returned to City Council for comprehensive public review and implementation of a harm reduction strategy for the casino.

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Full text of our statement today in response to Paragon Gaming’s announcement of renewed plans to build a massive casino “resort” in downtown Vancouver.

Vancouver Not Vegas responds to Paragon Gaming announcement 
September 24, 2013

In 2011 Vancouverites united and spoke with one voice that we don’t want a mega-casino in our city.  This is not who we are, nor the values we want to project about our city.  We do not choose to offload the cost of government onto the weak and the vulnerable. And we’re not alone. Cities across Canada are telling governments they’ve had it with the relentless attempt to force gambling into our communities.

Yet despite a resounding 11-0 vote in Vancouver City Council that rejected the proposal, here we are again.

Yet again there has been no transparency, no disclosure, no public consultation of a massive casino project.  Yet again a glamourous shiny announcement of a half-billion dollar project is foisted on the public with few details.

The most important feature of the Paragon announcement is the information still being withheld from the public.

1. No disclosure of the planned casino floor space. Vancouver City Council, with no public debate on this key point, approved a rezoning of over 2.5 acres of casino floor space for this site—that’s over 2 NFL football fields.
2. No disclosure of the very significant public subsidies going into the construction and maintenance of the development.  Does the BC Lottery Corporation facility development contribution remain at $16.9 million annually, as outlined in the Deloitte Report issued in 2010?
3. No disclosure of the public subsidy in the form of the 50% lease discount negotiated with PavCo.  These lands were supposed to help pay for the stadium roof.  Now the lease won’t even pay the interest on the debt.

This is a terrible deal for both the City of Vancouver and the Province of BC.  If Edgewater cannot expand its slot machines and gaming tables, it’s a business certainty that revenues to the province and the city will fall, because Edgewater’s expenses are about to rise precipitously.  There are no independent pro formas detailing projected earnings. It’s vital to remember that the Edgewater Casino has never met the original revenue promises it made to the city upon which its original license was granted.

End to end, this is a money losing proposition that will only add to the millions of dollars the public loses annually in the operation of BC Place.

Vancouver Not Vegas has filed a petition in BC Supreme Court contesting the relocation.

Statement by Sandy Garossino on behalf of VNV
Text queries to 778-231-5230

Addendum:

Video via here.

Vancouver Not Vegas Submission to the Development Permit Board
July 15, 2013

Vancouver Not Vegas is a coalition of citizens and community groups advocating for a healthy urban environment, and concerned about the proliferation of casinos in Vancouver.

Paragon Gaming, the BC Lottery Corporation and PavCo have a history of failing to disclose material facts and circumstances to the public, including the status of signed agreements and the existence of independent revenue projections that conflict with inflated numbers provided to City officials and the public.

Our position respecting today’s application is to take no position, but to state on the record that

1.  Vancouver Not Vegas objects to the lack of transparency and public disclosure surrounding future plans for the Edgewater Casino. Under the Gaming Control Act, the public is entitled to full notice of all material circumstances surrounding proposed casinos, yet the public knows nothing at all about what will transpire;

2.  To comply with the Gaming Control legislation, it will be necessary for Paragon Gaming’s relocation to BC Place to return to City Council for public hearings. To date:

•  No plans or drawings for the site have been publicly disclosed,
•  No net revenue projections nor host city revenue impact has been disclosed or independently verified;
•  There has been no disclosure of public subsidies in the form of lease forgiveness, construction subsidies or environmental remediation to be born by the BC taxpayer.

3.  As gaming revenues in the new location will not substantially increase, but construction and operation costs will, it is probable that the proposed relocation of Edgewater Casino will result in decreased revenue to the City and provincial government, unless it is significantly altered.

4.  It is reported that Paragon is in discussions with other gaming providers. What is the subject of those discussions—ie, is Paragon looking to sell its interest, or is it in discussions to expand its gaming capacity in some form of amalgamation or joint venture that materially alters the proposed development?

Before the City exercises its discretion in favour of the applicant’s request for an extension of its gambling permit, we ask for Paragon to publicly disclose the nature of its discussions with other gaming interests, and to commit to limiting its intended licenses to those already approved for the site, i.e. 500 slot machines and 65 gaming tables.

Media contact:
Sandy Garossino
Please text queries to:
778-231-5230

FOR IMMEDIATE RELEASE:  Vancouver Not Vegas Issues Court Challenge to PavCo and Paragon BC Place Casino Plan

Details of lease agreement unclear for both City and Province

May 2, 2013, Vancouver:  Vancouver Not Vegas announced today that it will proceed with the action it filed in November 2011 in the BC Supreme Court challenging City Council’s approval of relocation of the Edgewater Casino to BC Place.

The decision to proceed with the action results from PavCo’s announcement that it has signed an agreement to lease with Paragon Gaming Corporation allowing construction of a casino on the BC Place site. There has been no public disclosure or public hearing concerning the terms of the Edgewater Casino proposal contrary to the BC Gaming Control Act Regulation.

Sandy Garossino, co-founder of Vancouver Not Vegas, says “this project has all the earmarks of a financial fiasco. Incredibly, the public knows even less about the Edgewater Casino proposal today than it did in 2010. Once again PavCo has announced a done deal to the public, only this time without even the courtesy of telling us what we are committed to.”

PavCo was going to lease the land to Paragon for $6 million per year.  In September 2012, the Vancouver Sun reported that PavCo expects to reduce the rent to $3 million a year.  The current proposal does not reflect the highest and best use of the site.  Nor does it provide any indication of any return to the City.

Coalition spokesman, Ian Pitfield, says “no disclosure has ever been made to the public detailing what’s proposed now, nor has any community input been sought as required by the Gaming Act and the Regulation. Nobody knows what’s planned for the site, whether the City will lose money on it, how much public money will go into building it, or whether and how much the taxpayer will subsidize leases on public land.”

No date has been fixed for the hearing of the action.

For background on the original petition, click here.

Media contact:
Ian Pitfield at 604-828-5494
ihp@pitfield.com

– 30 –

Vancouver Not Vegas Co-Founder Lindsay Brown has filled a petition in BC Supreme Court seeking to overturn the decision by Vancouver City Council approving the relocation of Edgewater Casino to BC Place Stadium.

“To this day the people of Vancouver still have no idea of what is being planned for the casino development on the BC Place Stadium site, yet Council has essentially written Paragon and PavCo a blank cheque by approving the relocation,” says Vancouver Not Vegas co-founder Lindsay Brown.” Once again plans are being made behind closed doors at City Hall, apparently to be dropped on the public when it’s too late for us to have a voice, but this time Council has granted its approval in advance. The BC Place site is a Vancouver landmark affecting thousands of residents, and we don’t know what’s happening there. We need to be part of the discussion this time around – if there is a “this time around.” ”

“Council consistently treated this application as a re-zoning matter, and has not recognized the requirements of provincial legislation governing decisions around gaming licenses,” adds retired justice Ian Pitfield, a coalition supporter. “The community was not provided with any particulars of the relocation proposal. It was only told about an expansion.”

During the public hearings in the spring of 2011, Paragon Gaming, the owners of Edgewater Casino, strongly stated that relocation without an expansion of their license was not an acceptable solution, and offered no amended plan for the public or Council to review. Council voted to approve only the relocation of the Edgewater Casino against the applicant’s wishes and without public consultation respecting any revisions. The City has not complied with the Gaming Control Act and Regulations.

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Note: Letters sent from Ian Pitfield to City Hall and to the Minister responsible for Gaming beginning in late May 2011 have remained unanswered or have elicited only uninformative replies.

Vancouver Not Vegas now awaits a response from City Council regarding our petition. We are very pleased by Vision Vancouver/COPE’s promise of a moratorium on gaming expansion in Vancouver, however the question of PavCo’s intentions for the BC Place Stadium site remains urgent.

Mystery solved.

For two years the BC public and charities have wondered why the government took the stunning and inexplicable step of clawing back tens of millions from BC charities in one year alone, and seizing some $200 million more over 6 years.

But today it’s all clear. The BC government diverted hundreds of millions of dollars from charities and non-profits that we could have a retractable roof on BC Place Stadium instead of a dome replacement.

It’s clear from the timeline.

In the summer 2009 the BC Cabinet had a very serious problem. Their original $150 million estimate to build a retractable roof on the stadium was spinning out of control–in a single year it had more than doubled to $400 million and was growing rapidly.

Clearly, more responsible options had to be considered.

But the Las Vegas based Edgewater Casino owners, Liberal donors and insiders who hadn’t finalized their own deal with PavCo, wanted nothing to do with government fiscal responsibility. They wanted a retractable roof, and they played serious hardball to get it. Anything else was a deal-killer to them, and they made that crystal clear.

Where was the money to come from to satisfy the Edgewater Casino demands for an incredibly costly roof? Rich Coleman was the minister responsible for the BC Lottery Corporation, the casinos and also for gaming grants.

If the PavCo Edgewater deal was to survive, Rich Coleman had to be part of the solution.

This was the context in which Coleman moved in the summer of 2009 to claw back $36 million already committed to BC charities and cut them off from access to over $200 million over the next 6 years.

Today, more than two years later, as charities and non-profits across the province get ready to close, the roof opens on BC Place Stadium.

The Timeline

In May 2008, when the retractable roof was originally proposed, all-in costs were pegged at around $150 million. By November ’08 those projections had soared to $365 million.

In the spring and early summer of 2009 PavCo called for proposals to develop the BC Place lands. Paragon Gaming, the owners of Edgewater Casino and two other small market casinos in northern Alberta, submitted a bid to build a mega-casino complex onto the stadium. While that bid was under consideration, Paragon shareholder and board member T. Richard Turner, himself the former Chair of the BC Lottery Corporation, wrote a $50,000 cheque from his family company to the BC Liberal party for its May election campaign.

Mr. Turner had purchased shares in Paragon Gaming while still the Chair of BCLC, resigning from that board only months before Paragon’s purchase of the Edgewater Casino.

A month after the Liberal victory, Paragon was selected as the winning bidder, and began negotiations with PavCo to finalize terms.

But storm clouds were already forming. According to Kevin Krueger, the minister responsible, “it was very common knowledge that the bids to build the retractable roof had exceeded the estimate …fairly substantially. People knew… that (cabinet) would be wrestling with that question.”

Faced with a balking cabinet, Turner placed a call to Kevin Krueger’s private cell-phone, saying that Paragon considered its deal with PavCo “conditional upon a retractable roof,” and that failing to build one was a “deal-breaker”. The province had to call Turner’s bluff or find cash quickly.

In July 2009 Rich Coleman, minister responsible for social housing, BCLC and charitable gaming grants suddenly made what seemed then like an inexplicable move. Without warning he seized $36 million already committed to BC charities’ budgets from their legal entitlement to gaming proceeds.

With the stroke of a pen Coleman slashed grants to charities to pre-1995 levels, instantly securing just over $200 million from the charities’ gaming entitlement over 6 years.

Almost exactly the amount needed to meet Paragon’s demands for the retractable roof.

By fall 2009, events were moving quickly, but PavCo’s deal with Paragon was still not finalized. BCLC CEO Michael Graydon’s diary discloses that he brought Paragon VP Dennis Amerine before Treasury Board on October 1, 2009, where it appears yet more hardball was played.

On October 29, 2009 the province approved a budget for the BC Place roof, upgrades and temporary stadium of $575 million, almost 400% greater than the figure announced a mere 18 months earlier. PavCo went ahead with construction in May, 2010, without even waiting for Paragon to get their approvals.

We may never know why PavCo and Paragon were so confident that City Council would agree to a massive casino expansion, but gaming minister Rich Coleman’s dual responsibility for social housing may be a clue. Was there a tacit or explicit expectation that funds for social housing were linked to approvals for the Edgewater expansion? Is this why city staff’s initial public consultation only notified residents within 2 city blocks of BC Place? Why did almost no one in the city understand what was happening until a citizen’s group brought it to public attention? Why was this application so shrouded in mystery?

Whatever the true facts are, it is clear that charities and taxpayers are contributing hundreds of millions because of pressure from a casino partner that then failed to meet its own end of the bargain, and that .

The Fallout

Hundreds of BC charities and community groups across the province have quietly stopped serving their missions, or are near collapse. The Kelowna Women’s Resource Centre has closed, the Vancouver Children’s Festival is near failure, and the Museum of Vancouver and the Playhouse had to be bailed out by Vancouver taxpayers.

In the last 3 years BC charities have lost almost $100 million in gaming entitlements, destabilizing an entire employment sector responsible for 2.5% of the province’s GDP. Vital services freely available to the public, such as transportation of sick children to treatment, assistance for brain injury survivors, counseling for seniors and immigrants have been cut back or eliminated. There is no telling how many jobs have been lost, but they certainly number in the thousands. It goes without saying that entire system of charities and gaming demands a complete overhaul.

More prudent stewardship of the public purse would have saved those jobs and services and still got a perfectly good roof built for our teams.

Party insiders and cronies, backroom deals conflict of interest by those in positions of trust, the pushing around of small charitable organizations to get at their cash, and wild extravagance with the public’s money.

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Peter Busby and Penny Gurstein have co-signed an op ed opposing the Edgewater mega-casino development. Peter Busby, Order of Canada, is a world-renowned architect and is Founder and Chair, Canada Green Building Council. Penny Gurstein is Professor and Director of the School of Community and Regional Planning and the Centre for Human Settlements at UBC.

Below their op ed, you will also find Peter’s notes detailing some of the environmental, architectural, urban planning and economic problems with the casino plan.

Insular megacasino would add no value to Vancouver’s downtown businesses

Also printed in the Vancouver Observer.

On April 9 and 10th, 2011, Vancouver City Council is holding rare weekend public consultations on the controversial proposed megacasino project adjacent to BC Place.

Council’s ultimate decision on the project will test the fundamental values Vancouver has worked hard to achieve and will set forth a vision for the city’s future.

Vancouver has made great strides distinguishing itself from most large North American urban centres. It’s a city where urban-planning techniques and architectural styles are based on the core values of sustainable, economic, social and ecological development. Vancouverites see these values reflected in the growing collection of innovative green architecture, vibrant neighbourhoods, transit options, green space and lack of highways bisecting the city.

The proposal by Crown-owned BC Pavilion Corporation (PavCo) and Las-Vegas-based Paragon to build this mega-casino, boasting a gambling floor the size of two NFL football fields and 1500 slots, does not reflect a city renowned for its lifestyle, natural beauty and diverse cultural integration.

The presence of this megacasino in the downtown core threatens to undermine Vancouver’s values while running contrary to the vision of a municipality that aspires to be the greenest city in the world in less than a decade.

The project does not align with Vancouver’s vision of pedestrian and cycling-oriented neighborhoods and mixed-use architecture that integrates and enhances the surrounding communities. Instead, its massive floor plates will make it the bulkiest building downtown, a dominating form in a city that prides itself on its livable urban scale.

Inwardly focused and insular in design, casinos are by their very function a narcissistic drain on society. Through a combination of financial incentives, including inexpensive food and alcohol, casinos create tempting scenarios that dominate a visitor’s reason for travelling downtown. As a consequence, casinos have limited benefits for surrounding neighborhood restaurants and businesses.

This is evident in the PavCo/Paragon proposal, with its vague and limited street-level retail, which it describes as being located to draw pedestrians into the facility as opposed to enhancing the community fabric. In fact, only one of nine eating/drinking venues is accessible from the sidewalk. This plan removes existing pedestrian access on the street, inhibiting movement and access in the heart of the city, leaving the area devoid of human scale and texture.

As part of the development of a provincial property, this site should make significant contributions to the public domain, adding to the vibrant atmosphere Vancouver currently enjoys. Instead, above the ground floor, a multi-storey blank wall becomes the most dominant feature of the proposal, running along an entire city block. The proposed exterior illumination schemes discourage pedestrian thoroughfare and will become outdated quickly. The casino has essentially made this block of Smithe Street its own – an unfortunate terminus for the world-renowned urbanism of the Downtown South neighbourhood, known for its extraordinary livability.

The proposal fails to advance the area with regards to housing diversity, office space, or mixed use development. It would however require a great deal of infrastructure that doesn’t currently exist there and would increase the need for water, energy and food without providing a net increase to the overall sustainability of the area. The amount of parking the proposal recommends anticipates that many patrons will drive to the casino and will exceed the minimum parking requirements by a few hundred parking spaces, increasing vehicle traffic in the downtown core.

Provinces like Ontario and Quebec have documented the severe gambling addiction problems associated with their casinos and more often than not, affecting the financially vulnerable. One study published by Cambridge University Press suggests that for every dollar earned by a casino, it will cost society three dollars to manage problems like addiction, extra policing, bankruptcies, and family breakdowns related to gambling debts and other factors. Vancouver has a myriad of social problems pertaining to poverty, substance abuse and homelessness. Building an edifice that will amplify our existing social problems seems counteractive.

Land in Vancouver’s downtown is finite. A mega casino is not an appropriate use of this limited, valuable, waterfront area. There are numerous and better options for this site. The Costco store by BC Place and Home Depot near Cambie St. and Broadway demonstrate how larger retail stores can provide a community-appropriate amenity to a neighborhood. Vancouver’s downtown should be brought up when people talk about Melbourne and Portland, young cities with fresh perspectives on livability and sustainable development, not mentioned in the same breath as Las Vegas, Windsor, or Atlantic City.

This opposition to the PavCo/Paragon Casino does not signify anti-development. Rather, it reflects a demand for urban development that is consistent with Vancouver’s civic values of social, ecological and economic sustainability.

Vancouver City Council must not approve the expansion of a gambling industry that can be socially toxic and economically dubious. It must reject the expansion of the Edgewater Casino. Vancouver can and must do better.

Peter Busby – Notes on the Edgewater Casino / BC Place “Entertainment Complex” plan

1. Social and Urban design issues:

· As part of the development of a provincial property, this site should make significant public contributions to the public domain. Instead, above the ground floor, a multi-storey blank wall becomes the most dominant feature of the proposal, running an entire city block. The proposed exterior illumination schemes will date quickly and seem gaudy in no time.

· As a public facility, the stadium should be as accessible as possible from all sides. Not only does the proposal dead-end the circulation ring around the building, compromising public circulation in the area, but it forces pedestrians approaching from the west to access the stadium from Expo or Pacific Boulevards. The area around the stadium is one of Vancouver’s least pedestrian-friendly environments, already challenged and devoid of human scale and texture. Removal of any existing pedestrian permeability on the street will inhibit movement and access in the heart of the city

· The casino essentially has made this block of Smithe Street its own – an unfortunate terminus for the world-renowned urbanism of the Downtown South neighbourhood, known for its extraordinary livability.

· The massive floor plates of the casino will make this the bulkiest building downtown, a dominating form in a City that prides itself in the successful urban scale of most places and projects.

· What about the social cost? Other provinces like Ontario and Quebec have documented the severe gambling addiction problems associated with their casinos and more often than not, affecting the financially weak. BC has taken the high road on so many other social issues; why shouldn’t we be standing strong against this?

· The size and scale of development is not in keeping with the goal of walkable, pedestrian and cycling oriented spaces.

· Casinos are inherently black boxes – inwardly focused and insular, the proposal shows extremely vague and limited retail at grade that is described as being located to draw pedestrians into the facility – only 1 of 9 eating/drinking venues is at grade

· Reports suggest that almost all of the revenue from the Edgewater casino is generated from “locals” who, on average visit 2-3 times a week for 25 hours/week – this is an addict – most new users are to come from “out of town” This paints a picture of users as a lethal mix of tourists who are visiting Vancouver (not for its beauty) and local addicts.

· Land Downtown is not endless. Is this an appropriate land use for such a prime location? There are much better uses for this site. Costco down the street and the Home Depot near Cambie and Broadway show you can put in larger retail stores and still provide an amenity to a neighbourhood. We probably want our downtown to be brought up when people talk about Paris, Vienna and London, not Vegas, Reno and Atlantic City.

2. Environmental issues
· How does this project contribute to the goal of the Greenest City?

· The project is 1.967 acres – “generally 2 acres or more” is needed to be applicable for a large site rezoning in the city – this site should be subject to the EcoCity requirements

· There has been no attempt to address the high energy usage of the casino by leveraging the adjacent residential land uses or using/developing district energy (Screening Study required under EcoCity to determine feasibility for district energy)

· There has been no recognition that hotels and casinos are massive users of potable water – lost opportunities to retain water and recycle for facility uses

· Their proposal to be “33% better than MNECB” (the Canadian Model National Energy Code for Buildings is the weakest energy code in the Western world, except for the USA, which doesn’t have one!) will mean they will not meet the Vancouver energy code when the building opens. That means it’s 22% better than ASHRAE 90.1-2007. Since the CoV’s energy code takes precedent at the time of building permit (and the building permit for this building won’t likely be complete until 2012 at the earliest), this building won’t be designed to meet the CoV’s newest energy code (ASHRAE 90.1-2010 to be adopted soon). They would be at least 3% worse than the building code before the building ever opened. If they open in 2015 they will be 30% worse than the building code at the time. It’s something that they and the CoV need to clear up. The bar is constantly being raised. We need to design to anticipate higher standards!

· The proposal doesn’t plan to pursue the rainwater quality control credit. Given they are on a brownfield, and right next to False Creek this is of concern, especially given the area of parking shown. Where’s all that dirt, grit and oil flowing?

· Generally the whole issue of “equivalence” is impossible to verify. Without a third party to review their work they can claim credits like durable building (which they show on their spreadsheet) and never produce a document to show compliance with the credit requirements. They’ve also thrown some pools up on the roof and the new ASHRAE modeling requirements don’t let you ignore that stuff anymore (that and the crazy plug loads from slots and the other gambling machines they want to put in there).

· They can’t design to LEED equivalence. “Ensure all new provincial government buildings meet LEED® Gold or equivalent green standards.” https://www.energyplan.gov.bc.ca/efficiency/ . If ICBC, VCH, and everyone else needs to design to meet LEED Gold why doesn’t the BCLC? It is a provincial government organization.

· The electrical loads in a casino are extremely high. It’s like a server room with all those slot machines, especially when it’s open 24/7 365. Adding something like this to an already dense area is going to make it pretty hard for BC Hydro and the province to meet its carbon reduction goals.

· From a LEED ND perspective this adds nothing to the area with regards to housing diversity, office space, or mixed use development. It would however require a great deal of infrastructure that isn’t there right now and would increase overall the need for water, energy and food without providing a net increase to the over sustainability of the area. The amount of parking they are adding suggests to me that they are anticipating this will be a driving crowd (exceed the minimum parking requirements by a few hundred parking spaces). This is nothing like the people who live in towers next to Costco and bring their stuff home by hand.

PavCo boss needs to get casino facts straight

Re: “More facts than fiction needed in gambling debate” – Podium op/ed from BC Pavilion Corp. CEO Warren Buckley – issue 1116; March 15-21)

Warren Buckley seems to have difficulty differentiating between fiction and fact.

He says that “at 110,000 square feet the casino is about the size of a single football field.” The city planning report calls for a casino of up to 114,000 square feet. A quick Google search of football-field dimensions yields the answer of 57,600 square feet – roughly half the size of the proposed casino. While that is the American football field, the comparable Canadian playing surface is 64,350 square feet, excluding the end zones. Whatever dimensions are used, the fact is that at 114,000 square feet, the casino would be 2.62 acres. It’s certainly not “about the size” of one football field.

One can have about as much confidence in Mr. Buckley’s calculation as one can have in his statement that the City of Vancouver will derive $23 million annually from the operation of the proposed casino-hotel complex. Approximately $6.3 million is already earned from the existing Edgewater Casino. Another $6 million will come from property taxes.

Neither PavCo nor the BC Lottery Corp. (BCLC) acknowledges that property tax will be payable, however the proposed site is developed. The real increase in revenue to the city would then be a maximum of $11 to $12 million. For many reasons that estimate is more likely fiction than fact.

The BCLC revenue estimates are based on assumed hotel occupancy of about 65% in the first year of operation and 75% in the third and subsequent years. If realized, the occupancy rate would exceed that of other hotels in the city and represent, in part at least, a transfer of occupancy from existing hotels that have paid their share of taxes over many years.

The estimate assumes that 200,000 “non-local” or destination gamblers will come to town in year 1 and 610,000 will arrive annually in the third and subsequent years.

Where will they come from? No one knows, and the BCLC doesn’t say.

Even a reputable accounting firm that compiled a tabulation of the revenue estimates does not stand behind the numbers.

The Deloitte report disclaims any responsibility for the accuracy of the estimates saying that it has used only information supplied to the firm by the BCLC or its service provider.

Even the BCLC seems to doubt its own numbers.

In presentations to city council, it reduced its return projection to between $12 million and $14 million in addition to property taxes, and not the $17 million suggested in the Deloitte report. That substantially reduced number, too, is quite likely more fiction than fact. After all, the BCLC said the city would derive about $12 million annually from the existing Edgewater Casino. In fact, the revenue has never exceeded $7 million.

How can one have confidence in any estimate the BCLC puts forth?

Yes, debate should be based on fact and not fiction or dreamy estimates. PavCo and the BCLC would do well to start differentiating between the two.

Ian Pitfield, Vancouver Not Vegas Coalition supporter

This letter from Business in Vancouver April 5-11, 2011; issue 1119

When casinos roll into the red

Restructuring Gateway Casinos and Entertainment wiped out $1 billion in debt and provided the company with a $100 million capital infusion and a $500 million loan

By Glen Korstrom, Business in Vancouver magazine, April 5-11, 2011; issue 1119

Activists who oppose Paragon Gaming Inc.’s proposal to build Western Canada’s largest casino adjacent to BC Place frequently say their opposition stems from fear that the venture will collapse in debt.

They justify these fears by pointing to a jackpot of casino companies that have run into debt so deep massive restructuring was required. One of those deals was the largest acquisition of 2010 that did not involve a mining company.

As for Las Vegas-based Paragon, it has an option to lease taxpayer-owned land, subject to civic approval and $350 million in financing, so it can build a $450 million casino and hotel complex by 2013.

Its $6 million annual lease payments would help BC Pavilion Corp. (PavCo) pay for the $563 million renovation of BC Place.

Paragon president Scott Menke has refused to open his private company’s books to demonstrate fiscal strength. PavCo chairman David Podmore, however, told Business in Vancouver that he has seen Paragon’s books and that he believes the company is capable of meeting financial commitments.

Things don’t always work out so well for casino operators, however.

The largest non-mining acquisition of 2010 demonstrated that.

Burnaby’s Gateway Casinos and Entertainment Ltd. morphed from being an income fund in 2007 to being owned by two shareholders: Crown and Macquarie Bank.

Those two principals borrowed more than $1 billion from various banks, and in 2010 its proverbial chickens came home to roost.

A consortium of debt holders, led by Catalyst Capital Group Inc., started buying Gateway’s debts from those various banks and cobbled it all together.

Then Catalyst executives offered an ultimatum to Gateway principals on behalf of all the debt holders. Catalyst either wanted Gateway to pay off its debts or ante-up the lion’s share of the company’s equity.

That set the wheels in motion for the debt-holders to pay off $1 billion of the company’s $1 billion-plus in debt and provide a capital infusion of $100 million and a $500 million term loan.

In exchange, they got 98% of the company and were free to start racking up some new debt of their own.

“What was interesting for me was to see how these private equity investment firms go out and purchase the public debt with an eye to becoming management, basically becoming equity, and then going out and raising new debt for the enterprise,” said Lawson Lundell LLP partner Mandeep Dhaliwal.

His firm represented Catalyst on some aspects of the Gateway acquisition. He stressed that the lead lawyers on the case were at Toronto-based Bennett Jones LLP.

“The debt-holders’ purpose was to take over the company and then go out and leverage the company again with new debt over time,” Dhaliwal said.

Once in control of Gateway, the Catalyst consortium hired Jefferies and Co. to raise hundreds of millions of dollars of debt in the bond market.

Troubles in the gaming sector are also hitting Vancouver’s Great Canadian Gaming Corp. (TSX:GC) which has hinted that it may close Hastings Park casino and race track if negotiations with the City of Vancouver on a lease renewal do not improve.

The city wants Great Canadian to spend millions of dollars to build a parkade and refurbish its back stretch.

“We’re a public company. We have to disclose to our shareholders the fact that the worst case scenario is that negotiations will not go anywhere and that we are forced to cease operations,” spokesman Howard Blank told media in March.

Trouble also struck Edgewater Casino Inc. in 2006, when it embarked on a different kind of restructuring than Gateway did.

Edgewater was losing $157,000 a week, according to documents filed as part of its 2006 Companies’ Creditors Arrangement Act proceeding. It had racked up $29 million in debts after opening in February 2005 and the result was being plunged into creditor protection.

The Supreme Court of British Columbia approved a $42 million deal in 2006 that saw Paragon, as the new owners of the eventually profitable casino, make payments to creditors.

Vancouver Whitecaps co-owner Greg Kerfoot was the largest of those creditors given that he lent Edgewater $12 million and also provided a $5.4 million letter of credit for money owed to the British Columbia Lottery Corp.

Companies controlled by Edgewater’s previous owners, Leonard Libin and Gary Jackson, also received an undisclosed sum after creditors and legal fees were paid.

Much recent media attention has focused on how Paragon’s only Las Vegas gaming establishment is a neighbourhood sports bar with 15 slot machines called the Creek Bar and Grill. It is so far off the main Las Vegas strip tumbleweeds pass nearby.

But even the largest casino operators in the world suffer from massive debt and have come close to folding.