(Update: Approved at about 7:30 pm) Tonight the Vancouver Park Board is reviewing a staff recommendation to grant a ten-year lease, with two additional ten-year extension terms, to build and operate a restaurant at a prime location near the waters of Coal Harbour downtown. (Park Board meetings are now on web video.)
Eleanor Hadley, who passed away in March 2015, was a staunch opponent of businesses operating on City park land.
If the City will allow businesses to operate on park land, City staff and elected officials need to proceed with due diligence on behalf of the public, especially for long-term deals.
From the staff report: “The Selection Committee recommends the proposal from the Sequoia Company of Restaurants Inc. and McDougall Holdings Ltd. (SCRMH) as the best submission with the best overall score and highest rent proposal. SCRMH is a partnership between the Sequoia Company of Restaurants Inc., which operates Seasons in the Park, The Teahouse, The Sandbar, and Cardero’s restaurants, and McDougall Holdings Ltd., which operates in partnership Harbour Air, and the Flying Beaver and Flying Otter restaurants.”
This will likely be a popular restaurant, given its excellent location. And we hope that the Park Board Commissioners will exercise full discretion in the public interest. This could be a thirty-year deal if renewed as permitted. That means it could this lease could run until the year 2045 — the middle of this century.
A number of restaurants and businesses operating on public land in Vancouver city parks. Is the public benefitting adequately from the deals?
The staff report outlines the rent to be received at as an annual basic minimum, plus a tiered percentage of revenue, as follows:
Annual Basic Minimum rent: $200,000
Variable rent based on revenue:
$0 – $8,000,000 4%
$8,000,001 – $10,000,000 5%
$10,000,001 – $12,000,000 6%
Quoting the staff report: “In addition, the proponent will be responsible for a payment in lieu of property taxes, the cost of construction, and all operating costs.”
We know from experience (Cactus Club on English Bay) that the Park Board will not disclose publicly in its annual financial reports how much money public coffers actually receive from deals like this, so the public must put its trust in the elected officials and public administration to ensure that the City is getting a fair deal now, and each year over the course of up to thirty years.
And besides the money, there are conditions to consider. Park Board Commissioners have to be shrewd businesspersons on the public’s behalf. We say this because things can go astray, as we have documented here: Humble food stand on Kits Beach ends up controlled by billion-dollar private Texas company. How did this happen?
Did the Park Board have an independent analysis of the business case and conditions for this new lease, or was it all done internally? Did staff prepare a report projecting revenues to the City from now to 2045? It’s important to ask, as the deal will likely outlive the staff and the political careers of the Park Board Commissioners.
Another point is sustainability.
Quoting the report: The key requirements of the successful proponent are to enable the Park Board to realize:
- a first class food service establishment;
- a competitive rental payment, including a payment in lieu of property taxes;
- prices and service consistent with similar restaurants;
- a strong commitment to sustainability;
- a proponent with strong record of experience in operating in similar settings.
Vancouver has “Greenest City” aspirations, and our mayor even gained an audience with The Pope on the topic of climate change. But is the City asking enough of businesses to achieve sustainability? Will this restaurant ban the use of energy-wasting outdoor heaters? That would be a sign of sustainability leadership. Did the City ask? Did Commissioners discuss this?
For reference, see our stories on that topic here.
Outdoor patio heaters defy Vancouver’s Greenest City dreams: Many tons of carbon emitted each year. Change needed. Leaders needed!
Space heaters, open flames at Telus Garden restaurant. Ignored in Greenest City plans?
Additional info after initial posting.
According to this tweet by @raytomlin, it looks like staff actually did do revenue projections — $2 million in rent over the first five years.
Anyone interested in the staff presentation and level of discussion, you can check out the archive video.