February 23/03 4:38 am - Hamilton 2003 Worlds:
Posted by Editoress on 02/23/03
Hamilton 2003 Worlds - Miscommunication and Misunderstanding
by Rob Jones
"Are we having fun yet?"
This was the greeting I received from an exasperated Neil Lumsden last Thursday evening as I entered the auditorium at Mohawk College in Hamilton for the 'Town Hall' meeting the 2003 Worlds organization was holding for local residents and business owners.
Lumsden, the Chief Operating Officer for the Worlds, had reason to sound exasperated and put upon - less than 48 hours earlier a flurry of articles in the Hamilton Spectator had begun, with suggestions that the Worlds was attempting to squeeze more money out of the City for the event, and at least one City Councillor was quoted as saying that the Worlds had only a "50-50" chance of taking place in Hamilton this coming fall (October 6-12).
Since the initial article, more articles have appeared in the Hamilton Spectator and the Globe and Mail (among others), and reports have appeared on local television. They have accused the Worlds organization of requiring City taxpayers to cover up to $10 million in costs for the event, while some local politicians, struggling to deal with an estimated $41 million budget shortfall, are stating that the event will not get "one cent more" then the $400,000 promised back in 1999. Add to this talk about residents and businesses being blocked out of their properties for a week, rumours of massive traffic gridlock and a possible class action lawsuit threatened by a car dealership, and "Are we having fun yet?" doesn't come close to describing the situation facing the Worlds organization with less than 8 months to the start of the first competition.
We have attempted to sort out exactly is going on, and how much (if any) difficulty the Worlds is facing. First, the events of this week, and how they relate back to previous activities and ongoing operations with regards to the Worlds.
On Tuesday (February 19th), Neil Lumsden and Event Manager Dana Cunningham were asked to attend a City Council meeting. "We were asked to give them an update on the whole event." explained Lumsden. "I tried to give a picture of where we stood with everything, and gave them a copy of our critical path analysis, which breaks everything down.
When I finished, they asked questions and then the session went in-camera (everything previously had been open to the public and media), and there was general conversation around the event. When we were finished, we left and they continued in-camera with their council meeting."
Back at the office later in the day, Lumsden received a telephone call from the Spectator: Would he care to comment on remarks by councillors that he had asked for an extra $3.2 million?
First of all, Lumsden thought it was a joke, and then said that, no, he hadn't asked for that money. "Not only didn't I do it (ask for the money), I didn't even think it. It never happened."
How about the unsigned contract between the City and the organization, were there problems with it and was the Worlds going to renegotiate it? "We received it on January 29th, and have done an internal look. I looked it over, and David (Braley, Chairman of the Board) looked at it and then it went to our lawyer, just as you would with any contract. We expected, and do expect, to get together with the City shortly to go over the contract."
Despite this, the Spectator has been publishing a series of articles starting on Wednesday, stating that the Worlds are demanding more money from the City. Subsequent to that, the local television station made reports based solely on the Spectator article. In fact, the first time Mr Lumsden heard about the television report was at a Town Hall meeting, so they had obviously not even attempted to verify the facts with him.
Then, there is the $400,000 figure that has been floating around, and the statements by some councillors that this is the total and final amount that the City is committed to providing the Worlds, with claims that it has all been given to (and spent by) the Worlds organization. The background on this money is as follows: In 1999 an agreement was reached with the City of Hamilton that the City would pay a sum of $400,000 for naming rights sponsorship, which would generated an estimated advertising value of $1.4 million. Payments of $100,000 would be made each year of 2000, 2001, 2002 and 2003. If you look at the logo for the Worlds, you will see that it does, indeed, say 'Hamilton 2003', and the official name of the event is 'Hamilton 2003 Road World Cycling Championships'.
Frank D'Amico, the Ward 8 Councillor, has given a clearer explanation of the status of this sponsorship, admitting that the City has actually only paid $200,000 of the total amount, although he also pointed out that the City contributed $200,000 prior to the agreement as part of the bid process. Dana Cunningham clarified that the $200,000 for the bid was paid to GCG Management to cover costs related to the bid process, and the Worlds organization did not receive any of this money. She also pointed out that the sponsorship agreement itself did not have a contract attached - the City simply wrote a cheque to GCG with no signed document to confirm what they were to receive in return.
So, it is this $400,000 figure that some councillors point to as the only financial commitment that the City is on the hook for. Which leads us to the $3.2 million, or $3.5 million, or $6 million, or $10 million amounts that are being bandied about (as an aside, D'Amico quoted a number of 22 million Euros (approximately $35 million Canadian) for the cost of the Zolder Worlds last year at the Town Hall meeting, eliciting gasps from everyone as he rhetorically asked who was going to cover the costs to meet this figure. He later admitted that he got this number from "asking people on the street" during a trip to Belgium...)
These figures were presented by councillors for the following items: $3.5 million (or 2.5, or 3.2, depending upon whom you talk to) for police, emergency services, road closures, public works, etc. and $6 million for a liability fund for potential lawsuits (including the car dealership class action suit). So the latter figure is purest speculation to start with and, as was mentioned by Lumsden, "the City should already have its own liability coverage already, I would think."
The cost for services is something more concrete, and here we do have some issues that have to be dealt with. Part of the problem is that much of the council, plus the Mayor and, indeed, the definition of Hamilton, has changed since the original discussions and working agreements. The provincial government pushed through their amalgamation program, which brought outlaying towns and regions such as Ancaster, Flamborough, etc. under the umbrella of Hamilton.
The new mayor of the amalgamated Hamilton is Bob Wade, formerly the mayor of Ancaster. The former mayor of Hamilton, Bob Morrow, who was involved in much of the earlier work is out, after having been beaten by Wade. Many of the councillors on the new amalgamated council are also from outlying regions, and have little knowledge of the former process. To be fair, all are in favour of the Worlds, and see the value of boosting the region, but they are also concerned about budgets, and elections only a few weeks after the Worlds.
Over the past few years, it has been generally acknowledged by the politicians and officials whom I have interviewed at all levels that the federal government would be committing $10 million, that the province would be expected to contribute roughly half of that amount again (they have actually committed to a total of $3.75 - more on that below), and that the City would contribute $2-$2.5 million, primarily in the form of services, such as road improvements, police and emergency, City staff hours, etc. Other funds would be raised through corporate sponsorship, ticket sales, merchandising sales, etc.
The Feds, through Heritage Minister and local MP Sheila Copps, have met their commitment. The province, after a long and painful process that involved the resignation (not related to the Worlds) of the locally-based Tourism Minister and a change in the leadership of the governing party has come in with a total of $3.75 million ($1.5 million is for a Trillium Fund grant for tourism activities related to the Worlds; the application is currently awaiting approval). The City, as anyone who has driven through Hamilton in recent months will know, has been busy repaving roads on the routes for the races. They have also had staff working on transportation, access and emergency plans (a separate story on these plans will be posted tomorrow).
It appears, therefore, that everything is moving along as it is supposed to; so why the sudden explosion of accusations and dire threats? As noted above, much of this is certainly related to the fact that the City is struggling to meet its own budget requirements. In addition, the absence of a contract (related to the aforementioned provincial delay and the late official launch of the Worlds last November), might lead the cynical to conclude that bad publicity for the Worlds organization would certainly strengthen the City's hand when it comes to finally nailing down exactly how much money they are committing.
Lumsden says that he will be "meeting this week with the mayor, and we will be able to move on from this. Mayor Wade is committed to helping to build the City, and they (City staff and council) have been supportive through the process so far. It will get sorted out. Our staff is just trying to stay focussed and move forward."
Tomorrow: Road Closures, Resident Access and Emergency Services - The Plan.
Tuesday: We Grade the 2003 Worlds Thus Far