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I can't believe how this city is run.
CITY HALL TRIES TO IMPOSE 3,000% RENT INCREASE ON RACE CITY…AND RELATED NONSENSE
November 24, 2009 by Markham Hislop
By Markham Hislop, Editor
Has City Hall declared war on Race City? Just when Calgary motorsport fans thought their race track was safe from the grasping claws of the waste and recycling department, Race City faces offensives on two new fronts. First, Corporate Properties has demanded $1,080,000 for annual lease payments, a 3,000 per cent increase from current rates. Second, at Monday’s Council meeting the administration tried to add the cost of building new storm water retention ponds onto Race City’s property taxes.
The situation is so bad that Ward 12 Alderman Ric McIver, Race City’s champion on Council, stopped just a hair’s breadth from accusing senior City management of being insubordinate.
“If it’s not insubordination to Council’s direction, it’s very close to it,” he fumed late Monday evening when contacted by SE Calgary News.
When asked if he saw the long reach of Mayor Dave Bronconnier in management’s latest machinations against the race track, Ald. McIver hestiated, then said, “I’ll let other people judge that.”
Race City owner Art Mackenzie was almost philosophical about City Hall’s latest shenanigans. He says this has gone on for so long now he expects it.
In September, Council passed a motion 8-7 to honour the City’s existing lease with Race City. That lease was in effect until 2025 and included annual payments of $37,000. City officials were instructed in the amended notice of motion to negotiate a new lease, lasting until 2015, based on the terms of the old one. Ald. McIver told SECN that if Mr. Mackenzie came to the bargaining table prepared to be reasonable, he beleived the City would as well.
It appears he was mistaken.
In an interview Monday night after he watched the Council meeting on television, Mr. Mackenzie said, “The people who I’m negotiating with are the same people who desperately didn’t want me there, and their direct boss is the mayor, who desperately didn’t want me there.”
SECN has obtained a copy of an October 23, 2009 letter from Sherine Nafie, a commercial leasing agent for the City, to Mr. Mackenzie setting the annual lease payments in the Race City lease at $1,080,000 plus GST for 2010 and 2011. The City proposal also required an $180,000 deposit, which it demanded be paid by November 5. When contacted by SECN Ms. Nafie refused to comment on the document.
According to Mr. Mackenzie, City Hall arrived at the exhorbitant number by valuing the 64 hectare property located at 114 Avenue SE and 68 Street at $27 million and calculating the lease at four per cent of that value. He said that the calculation was based on the assumption that the land was zoned Industrial 2, but instead it has a designation of Direct Control, which required a special bylaw from Council when the lease was first set up in the early 1980s.
He wonders how the City can value the land based on a zoning classification that doesn’t apply to it. He’s not alone. Ald. McIver says this issue will be one of many he raises with City managers in the near future.
Another will be the land valuation. Mr. Mackenzie says he was not told by City Hall, but has heard through the rumor mill that the quarter section of land directly east of Race City was sold to the City for $6 million several years ago.
In any event, the City is attempting to impose a 3,000 per cent increase in Race City’s lease payments. Mr. Mackenzie says there is simply no way his company could afford such payments; the race track does not generate a fraction of the revenue that would be required to support such costs.
“I’g going to rip the administration apart on that,” says Ald. McIver. “They were told to offer Race City similar terms to the old lease.”
Another provision of the notice of motion regarding the new lease was access to the Race City property. Access to the track’s parking lot and direct access to the Calgary Kart Racing Club’s track on the southern edge of the land was supposed to be included in the new document.
Instead, the October 23 letter states that the City “shall provide one access to the site, currently identified as the VIP entrance on 68 Street SE…”
Entrance to Race City was reduced to the VIP entrance for the entire 2009 season as the City rebuilt 68 Street south of 114 Avenue. Mr. Mackenzie said the restriction caused serious traffic problems for larger events. Access to the kart racing track was severely curtailed during wet weather because the only access was across dirt fields that turned into mud bogs.
Ald. McIver is also upset that City managers tried to have Race City bear the cost of constructing storm water retention ponds on Race City property. He says “someone slipped it into the budget to embarrass members of Council who support Race City.”
During debate, opponents of Race City attempted to portray the cost of building the ponds as a “subsidy” to the track. Ald. McIver says such a characterization is completely false and misleads the public (Twitter followers watching Council proceedings were repeating the “subsidy” line throughout the debate).
The ponds are required by Alberta Environment, said Ald. McIver, and must be built whether Race City existed or not. To blame Race City or to try to have the motorsport facility bear the cost is simply not consistent with the facts.
Ald. McIver made a motion to have the cost of the ponds taken from the City’s capital reserves, but the motion was defeated 8-7. The vote split along the lines of the vote on the September notice of motion preserving Race City, except for Ald. Colley-Urquhart.
How the ponds will be paid for is now “in limbo” says Ald. McIver, since the cost was removed from the budget.
Calgary motorsport fans, and citizens concerned about just who is running their municipal government, should be very worried by what City Hall is trying to do to Race City.
Who tries to increase lease payments to a tenant by 3,000 per cent? If residential landlords tried that nonsense there would be rioting in the streets. And as Ald. McIver points out, City officials were directed by a motion passed by Council to negotiate the new lease on the same terms as the old lease.
Which raises the question why there had to be a new lease at all, since the original one was still in effect. But never mind that red herring.
Then there’s the issue of the lack of access to the facility, which is a serious safety concern. Plus the race kart club has told the City on several occasions that if it doesn’t have adequate access through 68 Street it will suffer financial distress and could fail.
And the attempt to make Race City pay for storm water retention ponds that are required because of the expansion of the Shepard Landfill, and have nothing to do with the race track, is just under-handed. I think Ald. McIver is right, it was an attempt to embarrass aldermen who support Race City.
What does that say about City Hall when management thinks it can act with that sort of impudence? Who’s really running local government? Certainly not Council by the look of things.
Let’s hope Ald. McIver and other Race City supporters on Council can head off the administration and get this mess sorted out.
I find it difficult to believe that motorsport has to fight this hard to survive in Calgary.