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City officials told they can't use gas-tax money for an event centre

THUNDER BAY -- The city's controversial $114.7-million event centre project may be dead in the water.
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Mayor Keith Hobbs says the proposed event centre is effectively on hold. (Jamie Smith, tbnewswatch.com)

THUNDER BAY -- The city's controversial $114.7-million event centre project may be dead in the water.

High-ranking municipal officials, including Mayor Keith Hobbs and city manager Tim Commisso, announced Monday at a hastily called news conference that earlier in the day they had received official notice from the federal infrastructure minister that their request to use $23-million in gas-tax allocation money over the next 10 years would be denied.

Federal Infrastructure Minister Denis Lebel told the city in the letter it could only use the money to build a standalone convention centre, not one attached to an arena.

The project is effectively stalled, although council will have another discussion on the matter on April 13. Last week council approved moving ahead to Phase 5 of the project, pending federal funding, by an 8-5 count.

Hobbs said as late as 2012 the federal government had supported facilities for professional sports teams when it gave $69 million for Hamilton's Tim Hortons Field, home of the CLF Tiger-Cats.

"We were basically led to belive that we were going to be able to use the gas tax for this project," Hobbs said.

The news leaves the city facing three options, none of which appeal to Hobbs. A separate convention centre could be built but the city still doesn't know how separate the buildings would have to be.

"I really think that's a dumb idea and certainly wouldn't support that," Hobbs said.

A stand alone rink would cost the city around $80 million of its own money. With $23 million in the Renew Thunder Bay fund, that would mean around $57 million in debt.

"I don't know whether council has the appetite for that," Hobbs said.

Because the Lakehead Thunderwolves aren't technically a professional team, they could become the anchor tenant and make the project eligible again but they only play around 22 home games a year.

"Really the business case didn't fit that," Hobbs said. "That is an option but I don't see that as an option."

The federal decision is a disappointing one for the city especially when it has received more than $830,000 in federal funding to get the project to this point.

"The project was the same. It never changed," Commisso said.

The city hasn't had a chance to speak with the Thunder Bay Live consortium, including True North and its AHL team, but Hobbs said it's a no-brainer what the group's decision will be.

"If we cant produce a building for them they're not going to be coming here, guaranteed," he said. 

It's likely that the province's funding won't come through now either after Hobbs' conversation with MPP Michael Gravelle Monday.

"I think we're all realistic here. I don't think that'll be forthcoming," Hobbs said.

City facilities manager Michael Smith said even if the project is on hold, a majority of the leg-work and process is still useful, including the plan to-date.

"By no means is this work lost," he said.

As for the city's $23 million, that's up to council whether it wants to spend it on other infrastructure, save it or even spend it to refurbish the Fort William Gardens. But many councillors have stressed that the 63-year-old building needs to be replaced if only for accessibility issues.

Coun. Rebecca Johnson said she's concerened about the timing of the letter but it won't change anything about her decision, Johnson was one of five councillors to vote against the project proceeding.

"Why were we not informed of this last week?   Did someone know this information prior to our Thursday night debate?   A  lot of questions that I personally would like some answers to," she said.

Coun. Iain Angus said the letter to the city was registered last Monday but only came to the city a week later. He said he's disappointed in the federal government's decision.

"They didn't have the courtesy to tell the City last Monday - the day the Minister signed the letter. A simple call would have saved all of us - including the community at large from a very  stressful few days," Angus said.

Coun. Frank Pullia said the project should be put on hold until federal and provincial funding can be found and that the city should now focus on other priorities.

Meanwhile longtime opponent Ray Smith, chairmans of the Concerned Taxpayers of Thunder Bay, greeted the news with open arms. 

"I knew it wasn't right to use gas-tax money to build an event centre, especially when our city is facing millions in infrastructure upgrades. I informed (Conservative) MP Greg Rickford of this recently.The city imposed an $80 dollar surcharge on our water bill that should of come out of the gas-tax fund," Smith said in an email response. 





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