When McMaster threatens Council, it threatens all Hamiltonians. This Hamiltonian doesn't like being threatened by people who are asking for a lot of my money.
By Graham Crawford
Published February 29, 2012
City Council is used to dealing with deadlines, so I have no doubt they will know how to respond to McMaster's seemingly threatening deadline.
If they do view it as threatening, then I believe McMaster will have achieved their goal.
If, on the other hand, Council views it as another, albeit important, detail in the negotiations, then it is just that - another detail to consider and with which to deal.
The remarkable thing for me is that Council has a supposed partner who is relying on the City to cut two cheques and to sign an ancillary deal.
One cheque for $20 million for which we have negotiated a zero direct ROI (we own no portion of the resulting asset).
Another cheque in the amount of $27 million for rent.
And still another signature on a 20-year lease so the third partner can qualify for low rent for two years. They receive the benefit of our longer term commitment.
Not to mention the fact that we will cause enormous financial risk to a long-term downtown investor who has been paying taxes for years (The Right House).
I don't have a problem with any of this so long as our munificence is acknowledged and is reflected in the behaviours and decisions of our partners. Instead we get strong-armed? Instead we have to be on the receiving end of not-so-veiled threats?
If all McMaster was asking for was for some zoning flexibility or just swing space, Council should be jumping up and down trying to accommodate them. But when they're being asked to put the City's name on two cheques and one deal to the tune of $50+ million of our money, I recommend not even to think about blinking. Let's agree to not be fiscally sucker-punched.
Like Council, I want Mac to be part of our downtown, just as I want our Board of Education to stay downtown. Partners are permitted to get frustrated through the dealmaking process because it's almost always messy. But when they cross the line and effectively threaten in public (Council Chambers and Trustee Chambers), and in the media (Spectator), while they have their hand out for a big chunk of our money, Council really has to step back, take a breath and evaluate the behaviours of its future partners.
If the partnership is founded on this basis, how do we think it will develop into the future? Does anyone think the pattern of behaviour is likely to change? Not in my experience. Negotiate as equals, not as desperate and naive participants.
Common goals. Different methods of getting there. Our money. Council's decision.
It's time to get into a room together with both potential partners. Face time is what makes deals work. Correspondence, presentations, delegations, comments, reports are all part of the process, but sitting in a room together beats all of them.
Our financial contribution is significant. If we lose the Board and its employees downtown, and gain the medical clinic and its employees downtown, the outcome may be more symbolic than economic, especially when $50 million of our money is required to make this happen.
By way of comparison, just imagine the economic spinoff from a $10-20 million investment by the City of Hamilton in a true joint venture (ie. where we own a piece of the asset) to revitalize the Royal Connaught: jobs, taxes, tourism, conventions, citizens using a downtown facility, people living and shopping in the core in apartments and condos. You get the idea.
McMaster references their Plan B. We need a Plan B too and unlike McMaster, I recommend Council declare it only if its "partners" make that absolutely necessary. Otherwise, we run the risk of appearing to be less than honourable negotiators.
Remember, when you threaten Council, you threaten all Hamiltonians. This Hamiltonian doesn't like being threatened by people who are asking for a lot of my money.
Editor's Note: this essay is adapted from a letter to Council.
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