R.U. Leading: 3 Business Case Studies for Careful Consideration

By Graham Crawford
Published August 29, 2010

Business Case Study #1: A Case of Towering Aspirations

Garlings, a local, big name law firm at a recent COW meeting presented Councillors with a challenging request. Garlings is threatening to close its Hamilton operation after more than 100 years in operation and move it to another city unless City Council agrees to their proposal. Garlings employs about 100 people and has gross annual billings of between $15-20 million.

Garlings senior partner Bob Mitchell has told Council the firm would consider staying in Hamilton, but only if the City will build them a $120 million office tower on a site of Garlings' choice. Garlings wants the City to assemble the land, pay for the building of the office tower, and turn the keys over to Garlings when it is complete.

In addition, Garlings does not want to pay any property taxes for use of the building. Garlings has offered to pay a relatively small amount of rent, but it wants to be able to rent the rest of the office tower to paying tenants and to keep all rent revenues for a minimum of 10 years.

While Mr. Mitchell says that the tower will likely feature the firm's name on the top floor, he wants Garlings to have the right to sell the naming rights to the tower to any other party they deem appropriate. Mr. Mitchell adds that Garlings intends on keeping the naming rights revenue, no matter whose name appears on the building.

In his closing comments at the COW meeting, Mitchell added the City needs to make up its mind on the matter immediately, otherwise he will be forced to move the firm elsewhere. "I think I have made our position abundantly clear. Let me add, we will not participate in any further discussions until all Councillors have cast their votes. Any requests for business case numbers supporting our request will be met with silence. I thank you for your time."

Faced with this information, as a City Councillor, you would (Please select only one from the following 3 choices):

a) Listen intently to Mr. Mitchell and then explain that while you appreciate and value Garlings presence in Hamilton, unfortunately the City of Hamilton does not use taxpayers dollars to erect premises for any business.

b) Vote to support Garlings' request, knowing this is only a COW meeting and you'll be able to change your vote at the next official Council meeting, being sure to add that the Garling's name is associated with Hamilton all around the world.

c) Leave the meeting before the vote is called and go to a concert in Toronto and send emails to local reporters saying how people in Toronto are laughing at Hamilton for not considering Garlings' request.

Business Case Study #2: A Case of Making Dough

National Loaf has approached Hamilton City Council with a business proposition that has been more than a year in the making. As the largest baked goods corporation in Canada, National Loaf is considering setting up baking operations in Hamilton to better serve its regional customers. The company has been in discussions with the City's Economic Development Department for nearly 10 months.

You were informed by the head of the Department that National Loaf was close to signing a significant deal to locate a new bread making facility in the City's recently serviced Red Hill Industrial Park, a new facility that could use a large anchor tenant to get it off the ground.

You have just learned that National Loaf, although still keen to establish operations in Hamilton, has added some challenging conditions to the deal, much to the surprise of City staff. National Loaf now wants the City to agree to locate the plant next to the new Innovation University Campus (IUC) in the west end of the city.

National Loaf's spokesperson, Lance Boyle, says the site provides the corporation with advantageous visibility as it sits next to a major, and very busy, highway. "We love the idea of thousands of people passing by everyday and seeing our name through their windshields. As we say in the ad business, that number of impressions every day is worth a small fortune."

Trouble is, National Loaf now wants the City of Hamilton to build the baked goods factory for them. They estimate the cost to be in excess of $100 million dollars. On the other hand, they promise to employ 300 people in full time jobs with an average annual salary of $47,000. Mr. Boyle pointed out in his presentation, "This represents wages of over $14,000,000 each year we're in business."

Faced with this information, as a City Councillor, you would (Please select only one from the following 3 choices):

a) Listen intently to National Loaf's request and then explain that while you appreciate and value the opportunity to create hundreds of new jobs, unfortunately the City of Hamilton does not use taxpayers' dollars to build factories for manufacturers.

b) Vote to support National Loaf 's request, saying that the smell of fresh baked bread has been part of Hamilton's history since the first settlers arrived over 200 years ago.

c) Agree to support the proposal in return for free, fresh bread for the rest of your term on Council, which by your calculation is likely to be forever.

Business Case Study #3: A Case of Something Fishy

Evenmore Inc., a major development corporation whose majority stakeholder is billionaire Sketchi Dodger, has approached Hamilton City Council with a proposal to invest in the building of AquaLand, a large-scale aquarium they say will attract tourists from all around the region and beyond.

Initial public response has been remarkable, with each Councillor receiving many hundreds of emails in support of the aquarium idea.

While progress from the initial announcement to today has been slow to say the least, it's now time to make some important decisions. Evenmore estimates the cost of building AquaLand will be approximately $120 million. They have said they will invest $15 million of that amount, saying the rest would have to come from a combination of public money from threee levels of government, and from corporate sponsors who have not yet been identified.

The City of Hamilton has approached both the provincial and the federal governments who have said that together they will match any money the City invests in the project. A 20-acre site has already been identified on the outskirts of the city near a couple of major highways. The City of Hamilton has already purchased the land for the project.

Yesterday, Evenmore spokesperson Drew Bludd announced the deal is now contingent on the City of Hamilton helping the corporation acquire an additional 100 acres of land adjacent to the proposed AquaLand site.

He added, "The $15 million we have pledged to the development of AquaLand will only be forthcoming if the additional lands are acquired at a fixed price through the City of Hamilton. We're not keen to get into a bidding war with our competitors. Let's all take a deep breath and try to make this work for our shareholders."

When asked what Evenmore Inc. would do with the land, Mr. Bludd responded, "AquaLand will need parking and we intend to provide it to our valued customers, for a fee of course. After all, we're a business, not a charity. Not only that, but we have a lot of experience building shopping malls. So, there may be even more good news."

Council must vote on the proposal at today's Council meeting.

Faced with this information, as a City Councillor, you would (Please select only one from the following 3 choices):

a) Listen openly to Evenmore's proposal and ask why the City of Hamilton should help a developer acquire such a large tract of land at a favourable price?

b) Vote to support Evenmore's request, citing the fact that water and the fish in it are part of Hamilton's historical and cultural fabric.

c) Vote to support Evenmore's request, but suggest they consider placing the aquarium beside the Red Hill Valley Parkway, as there are large volumes of water already there.

Graham Crawford was raised in Hamilton, moving to Toronto in 1980 where he spent 25 years as the owner of a successful management consulting firm that he sold in 2000. He retired and moved back to Hamilton in 2005 and became involved in heritage and neighbourhood issues. He opened Hamilton HIStory + HERitage on James North in 2007, a multi-media exhibition space (aka a storefront museum) celebrating the lives of the men and women who have helped to shape the City of Hamilton.


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By Jason (registered) | Posted August 29, 2010 at 23:07:43

Graham, you're on a roll! Awesome stuff.

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By Andrea (registered) | Posted August 29, 2010 at 23:12:25

It's funny 'cause it is true!

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By mystoneycreek (registered) - website | Posted August 30, 2010 at 05:03:06

Great stuff; you're fast becoming one of my favourite RTH contributors.

Can't wait to see the contrarian responses...especially from those such as Mr. Whittle.

Comment edited by mystoneycreek on 2010-08-30 04:12:51

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By Billabojng (anonymous) | Posted August 30, 2010 at 06:46:13

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By realfreeenterpriser (registered) | Posted August 30, 2010 at 07:11:47

A thing of beauty.

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By rayfullerton (registered) | Posted August 30, 2010 at 07:41:15

Witty, good analogies, well thought out!

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By TheLastStraw (anonymous) | Posted August 30, 2010 at 09:12:39


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By HamiltonFan (registered) | Posted August 30, 2010 at 10:55:45

TD Graham with this humour I will admit, nice job and never knew until now that subjects such as law, bread and developers could be so exciting to read about. ;)

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By Mark-Alan Whittle (anonymous) | Posted August 30, 2010 at 11:17:15

Funny. Yes.

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By mrjanitor (registered) | Posted August 30, 2010 at 21:05:19

Brilliant Graham! I wish I found it funny, too close to our current realities for me to laugh at. I hope fence sitters will read this and really understand the manipulations that have gone on. I feel sick about the council meeting tomorrow.

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