Potential events centre shortfall 'could put taxpayers at risk,' says councillor

Three city councillors say they only recently learned of a potential funding shortfall for the city's downtown events centre.

Downtown Moncton Centre-ville Inc. made a commitment in 2015 to contribute $250,000 per year for 15 years to help fund the events centre.

The city and Downtown Moncton say they're still working to reach an agreement on providing the funds.

Documents obtained by CBC reveal Downtown Moncton told the city it can't afford the commitment, in part because of a misunderstanding over whether property taxes would apply to the centre.

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The documents raise questions about who at city hall was informed of the issue and when.

Greg Turner, now the city's deputy mayor after being elected to council in 2016, said he only became aware of the issue "over the last few months."

Coun. Bryan Butler, also elected after the commitment was made, told CBC he hoped that when planning a major project such as the events centre that "someone would have been wise enough to have a contractual agreement signed."

"I'd be very, very disappointed if somebody didn't sign some type of contractual agreement," Butler said.

Coun. Paul Pellerin voted against going ahead with the events centre in 2015 and said he was only "recently" made aware of the issue.

"I think it could put the taxpayers at risk and I think it's something that Moncton city council should have discussed publicly," Pellerin said.

The association representing downtown businesses and property owners lobbied for a multi-use centre in the core but cautioned the city in 2015 that its support was conditional on the centre being used asmore than an arena.

The group declined comment while negotiations continue.

The $113-million events centre is set to open in September and Downtown Moncton's first payment is due in 2019.

CBC requested interviews Monday with Mayor Dawn Arnold and city manager Marc Landry, who learned of the potential shortfall more than a year ago.

No interviews were provided.

Isabelle LeBlanc, the city's communications director, referred to a statement sent to CBC on Friday that said the city is still working "on finalizing some details and don't want to impact the discussions."

The three councillors were the only ones who agreed to interviews after a committee meeting Monday afternoon.

Turner said he doesn't recall seeing a pivotal July 7, 2017, letter outlining how Downtown Moncton couldn't meet its commitment.

The letter, obtained by CBC, was sent to the mayor, city manager and Downtown Moncton board members. Turner and Coun. Charles Leger are members of the board representing the city.

Turner declined to say whether he thinks the city did its due diligence on the funding commitment.

"It goes without saying" that there should have been a signed funding agreement before now, Turner said. "I think everyone was under the assumption there was a written agreement."

Asked if he expects it will result in a higher tax burden for city taxpayers, Turner said he's not concerned.

"No, no, I don't see that at all," he said. "I'm quite confident in DMCI's ability to meet their obligations."

The documents obtained by CBC indicate Downtown Moncton can make its initial 2019 payment, though after that is unclear.

Downtown Moncton raises money for its staff and programming through a tax levied on downtown commercial properties. New development in the core was projected to generate enough new levy funds to pay for the commitment to the city, the documents show.

However, the group assumed the levy would also apply to the events centre. It won't, which has resulted in the potential funding shortfall for the centre.

In the July 7 letter, the organization ruled out a steep increase in its levy.