Saturday, February 4, 2023

The Hamilton Urban Precinct Entertainment Group is Scheduled to Break Ground this Fall: Here’s What We Know So Far

In 2017, Hamilton City Council directed staff to investigate opportunities for the private sector to redevelop the FirstOntario Centre, Convention Centre and FirstOntario Concert Hall. By July 2020, the City had announced that the Hamilton Urban Precinct Entertainment Group (HUPEG) was the successful bidder for this project.

With representatives from Carmen’s Group, DPAI architects, Fengate Capital, Jetport Inc., LiUNA, Meridian Credit Union and Paletta International, HUPEG’s agreement would see them take over the responsibility of the operations and maintenance of the FirstOntario Centre, FirstOntario Concert Hall and Hamilton Convention Centre for a period of 49 years. 

Shortly after being awarded the redevelopment contract with the City, HUPEG announced a partnership with Oak View Group; a Los Angeles based venue development, advisory and investment company that recently merged with Spectra Entertainment. Oak View has partnerships with a number of other sport and entertainment venues, including Climate Pledge Arena in Seattle (home of the Seattle Kraken), UBS Arena in New York (home to the New York Islanders), and Coachella Valley Arena in California. Led by Tim Leiweke, the former CEO of Maple Leaf Sports and Entertainment (2013-2015), the HUPEG project marks the company’s first foray into Canada and will be the launching point for the company’s Canadian office. 

HUPEG has announced plans to invest a minimum of $50 million in renovations to the FirstOntario Centre, with a further $12.5 million in upgrades to the Convention Centre, and a one-time, $2 million contribution to the Art Gallery of Hamilton, which sits on land that will also be managed by the group. There is also the possibility of additional high rises to be built at Bay Street and King Street East. HUPEG also intends to invest a further $500 million in mixed-use commercial and residential development downtown; 5% of which will be dedicated to affordable housing. This additional investment would transform the area around the arena to contain retail, recreation and residential components.

To facilitate the redevelopment, the City will utilize a tax increment-based program, whereas grants will be provided relative to the actual increase in municipal property taxes generated as a result of an improvement or development on a property. Subject to the approval of City Council, grants will be provided over a maximum thirty-year period. The HUPEG would be eligible for these tax breaks as part of their redevelopment efforts.

The first stage of construction and renovation efforts will be dedicated to the FirstOntario Centre. Scheduled to begin in the fall of 2022, the construction will take place over two years and be completed in two phases in order to minimize the impact of the renovations on the Centre’s current tenants. Construction at the Convention Centre and Concert Hall would take place after work has been completed on the FirstOntario Centre. Renovations will be led by BBB Architects, who managed the renovation of New York’s Madison Square Garden. 

These initial renovations include upgraded amenities in FirstOntario Centre, including a microbrewery, enhanced hospitality suites and investments to attract “top tier” artists, according to the City’s website. But HUPEG is a corporation, and ticket prices to events at FirstOntario Centre will likely be set to recoup these investments and make their owners profits.

Given the number of partners noted, there is a possibility the group could collectively control a significant portion of land beyond the three sites identified in their proposal. It’s possible that the group could effectively control a significant portion of land bordered from James Street to Hess Street and Main Street to Cannon Street West. How all of this land would be utilized, though, still remains a mystery.

The Salvation Army shelter is located directly across the street from the area slated for redevelopment, and within the boundaries of a larger area. In a statement to the Spectator, HUPEG partner Jasper Kujavsky admits to having conversations with the Salvation Army on relocating the shelter. 

Similarly, HUPEG has noted that it will continue to work with Community Living Hamilton at 191 York Boulevard (also within the larger boundaries). While both the City and HUPEG have committed to ensuring that the organization’s operational requirements are addressed in any new development, whether the organization will be required to move has never been addressed.

The boundary also includes properties whose future is less certain. 

At the corner of Bay and Cannon sits the former Sir John A. MacDonald High School. Over the past several years, a number of new uses have been proposed for this space, including a casino, a new location for Hess Street Public School, a community hub, and affordable housing. While many of these are explicitly public purposes, it is also possible that the Hamilton Wentworth District School Board could put the land on the open real estate market, similar to Delta Secondary School. At that point, a private developer (such as HUPEG) could purchase the property to expand the entertainment district further, with eligible tax breaks.

Which of these- or perhaps a completely different use- will make this city better? Will continue to revitalize the downtown core and make it the type of Hamilton that citizens want it to be? And should one private corporation own- or have the ability to own- such a large parcel of land in the downtown core? 

While the bid was made and approved with the intention of saving the City money on upgrading and maintaining the property, the long term costs to its citizens could exceed any savings. In the current climate, there are concerns about the cost of living, and affordable housing is a concern of many. Is dedicating 5% within that type of land boundary enough? And will there be enough citizens willing to pay the ticket costs for the “top tier” artists that the FirstOntario Centre promises to accommodate? If a radius clause exists in an artist’s contract, would they choose Hamilton over Toronto?

There’s no question that the downtown needs revitalization. And with this approved bid, there is no question that HUPEG will renovate the FirstOntario Centre, Convention Centre and FirstOntario Concert Hall in the coming years. But what the rest of the downtown core looks like is still up for debate- and should continue to be- in order to best serve all citizens of Hamilton.

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