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‘It’s hard enough to vote for this now’: Halifax council resigned to pay Nova Centre payments

Halifax Regional Council passed a motion on April 10 to pay more than $301,500 to the Halifax Convention Centre as part of a cost-sharing agreement with the province of Nova Scotia.
Halifax Regional Council passed a motion on April 10 to pay more than $301,500 to the Halifax Convention Centre as part of a cost-sharing agreement with the province of Nova Scotia. Alexander Quon/Global News

Despite delays that saw the Nova Centre open several years behind schedule, with its hotel incomplete and its office space at only 30 per cent capacity, Halifax Regional Council passed a motion on Tuesday that saw it stay committed to the future of Halifax’s newest convention centre.

The council committed on Tuesday to approving a payment of $301,500 to the Nova Centre, despite a projection by staff that the reserve fund they created to cover those costs will be running a $17.8-million deficit within 10 years.

Despite the motion passing unanimously, many councillors seemed to feel as though their hands were tied by the cost-sharing agreement the municipality made with the province of Nova Scotia in 2010.

READ MORE: Coming to Halifax council: Nova Centre payments, low-income transit pass, Khyber sale

In addition to the $301,500, the municipality made a commitment to paying up to 50 per cent of the costs incurred during the 2017/2018 fiscal year — whatever that fee may end up being.

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“We agreed to be partners in this, so it is what it is,” said Sam Austin, councillor for Dartmouth Centre.

Some of the newer councillors questioned whether previous iterations of the council could have predicted the shortfall the current municipal government now faces, but in the end agreed that the city’s downtown core has been revitalized as a result of the Nova Centre project.

“When you build something like the Nova Centre, it is not going to create wealth,” said Waye Mason, councillor for Halifax Peninsula South, noting that the 17.8-million deficit is an estimate of a best-case scenario.

“I want to note that the more money it costs to run the Halifax Convention Centre, the less we have to run other things other than what is in this space.”

READ MORE: Halifax councillors order report on external consultant to deal with complaints against them

According to the report prepared by city staff, when estimates were first produced in December 2010, it was expected that the shortfall during the first year of operation would be $1.9 million, a figure almost entirely covered by their reserve fund.

Instead, a downturn in office rentals and incurred costs means that the shortfall is projected to be $3.5 million — and it only gets worse from there.

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Halifax Mayor Mike Savage spoke to media after the vote on paying funds for the Nova Centre.
Halifax Mayor Mike Savage spoke to media after the vote on paying funds for the Nova Centre. Alexander Quon/Global News File

The city expected their convention centre reserve account to stay in the black for at least the first 10 years of operation. Year 10 would’ve seen the fund running at a surplus of $5.89 million.

The revised figures now indicate the city believes that their reserve account in year 10 will have a deficit of $17.8 million — a swing of roughly $23.7 million

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Click to play video 'Halifax’s Nova Centre lands luxury hotel' Halifax’s Nova Centre lands luxury hotel
Halifax’s Nova Centre lands luxury hotel

Halifax Mayor Mike Savage spoke to reporters after the vote and said that the deficit does not indicate that the Nova Centre is a disaster.

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“I wasn’t here when it was signed but I supported the convention centre at the time and I’m sure a lot of people would do things differently going back in time if they could, but we can’t and we have to pay our part,” said Savage.

“You learn from things like this.”

City staff will now have the task of returning to council with additional updates and recommendations, as well as an updated business case for the reserve fund.

No date has been set for when that might be.