By Kevin Werner, News Staff
Any potential savings some Hamilton politicians was expecting from the new operators of the Hamilton Entertainment and Convention Facilities has evaporated this year.
A few politicians were expecting at least $1.2 million in savings for 2013 from the Carmen’s Group and Global Spectrum/Live Nation under an agreement approved by the city when both organizations took over HECFI.
But earlier this year both groups told the city there had been some unexpected costs that would push any potential savings this year into 2014. Carmen’s and Global Spectrum took over operations of HECFI March 1, and discovered that unexpected show cancellations, such as Lady Gaga, and difficulties in booking acts, would delay any savings to the city until 2014. Their concerns were relayed to city staff and councillors in January.
The businesses worst case financial scenario has proved correct, said Mike Zegarac, acting corporate finance director. He said after talking with the HECFI transition team, he told the March 21 government issues committee councillors shouldn’t expect any savings this year.
“I’m quite amazed that there will be zero (savings) in 2013,” said Ward 1 councillor Brian McHattie. “There is no savings when they promised $1.2 million.”
He said the companies have already started slashing costs, including cutting jobs at HECFI.
“I’m not asking, I’m telling them they should build in a (savings) of $600,000,” said McHattie.
Ward 8 councillor Terry Whitehead said since Global Spectrum had told council it would cover the $200,000 subsidy to the Hamilton Bulldogs, the city should realize at least that $200,000 in savings.
“This was a clear commitment that was made,” said Whitehead.
But Stoney Creek councillor Brad Clark said his colleagues should remember they signed a five-year contract that agreed to the private companies to defer any savings to 2014.
“We signed an agreement,” said Clark. “We signed another agreement. We actually agreed to no savings in 2013. I’m a little bit embarrassed we are talking about this in public. Stop, think, read.”
The revised contract, agreed by politicians in early February, provided $450,546 for Carmen’s Group, and $110,000 for Global Spectrum to dip into if they had losses this year. Carmen’s Group had promised to save the city about $7.1 million over five and a half years.