Casino Location of $90M project announced; site considered a temporary setback for economic development by critics - Tuesday 27th of May 2008
Locating the provinces first and only casino complex in uptown Moncton is a potential "missed opportunity" and a setback for economic development, according to the head of a local group.
Daniel Allain, executive director of Downtown Moncton Inc., is disappointed the complex will be located in Magnetic Hill, a 10-minute drive from the heart of the city. Placing the $90-million facility next to the Trans-Canada Highway sets up the possibility that tourists could visit the casino, stay at the hotel and leave Moncton without ever visiting the downtown core, he said.
"As an economic developer, Im happy this is coming to Greater Moncton. I think it is up to us to rise to the challenge and create partnerships with the new facility," Allain said. "Are we disappointed (with the location)? Yes, we are. It may be a missed opportunity; in 20 years, we will see how it goes."
Finance Minister Victor Boudreau announced Thursday that Sonco Gaming New Brunswick Ltd. was selected over three other proponents to design, build and operate the casino, slated to open in Magnetic Hill in 2010.
After a "rigorous evaluation process" that included assessing the capabilities of the proponents and the economic merits of each proposal, Sonco rose to the top, Boudreau said.
"This is the project that provided the overall better economic benefit, better feasibility for the province," he said.
The winning team includes Sonco Gaming New Brunswick Ltd., a Maritime-based development company; Clairvest Group Inc., a publicly traded merchant bank/private equity investment fund; Navegante Group Inc., a U.S.-based casino operator; and 2050631 Ontario Inc., a company comprised of investment firms and shareholders.
Evaluation of the proposals was completed by five teams made up of industry experts from HLT Advisory Inc., select government officials and consultants from KMPG LLP, which also acted as the fairness monitor.
The process took about six weeks, after which evaluations were again scrutinized by the due diligence panel and then presented to cabinet committees.
Boudreau noted that the uptown versus downtown debate did not figure in to the evaluation criteria.
"Some people prefer it uptown, some prefer downtown, but I think the project spoke for itself," he added.
Other proponents included the CEI Investment (New Brunwsick) Corp., Dieppe Resort and Casino Ltd. and Maritime Casino ULC.
Downtown Moncton Inc. had thrown its support behind Maritime Casino ULC - the only proponent that intended to situate its facility in the business district - in the hopes it would become a catalyst for more development. Allain characterized the selection of the Magnetic Hill-area site as a "temporary setback" for economic development.
For his part, Moncton Mayor Lorne Mitton refused to entertain the debate over whether the casino should have been placed in the downtown core or by the highway. Instead, the outgoing Moncton mayor said he sees all the future economic opportunities that will be tied in to the $90-million project.
"I wanted it in Moncton. For me to say that I am not happy would be ludicrous," Mitton said. "Obviously the businesses in downtown were promoting downtown."
All four casino proponents have been gagged from speaking with the media until the service-provider agreement is finalized in coming weeks. More details on the proposals will be made public after that point, Boudreau said.
The project, which does not include a First Nations component, will be financed entirely by the private sector.
In addition to the casino, the new complex will include a 128-room resort hotel and a multi-use entertainment facility with theatre seating for 1,500 and banquet-style capacity for 1,400. It will not include a racetrack.
The complex will create about 400 full-time job equivalents, and 770 during construction, Boudreau said.
Fifty per cent of annual revenues generated from the casino project, estimated at $50-million, will go to the province. Forty-seven per cent will go to the developers, while the remaining 3 per cent will be put into a capital reserve fund for the project.
Boudreau pointed to the provinces responsible gaming policy as a positive foundation for the new casino.
"Gambling is a choice given to everybody just like many other things are," Boudreau said, noting the province is taking a number of steps to ensure its managed responsibly, including slashing the number of video lottery gaming sites and boosting funding for addiction services.
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