WOULD THE PIPE SHOP MUSEUM REALLY LOSE $172K ANNUALLY ? DOES THE SLATE HAVE A HIDDEN AGENDA FOR THE SHIPYARDS ?
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By: Kerry Morris – March 6, 2016
Were Keating and Mussatto being truthful when they publicly positioned the Museum as a perpetual money losing burden to City taxpayers, or were they and BDO telling a pre-determined version of the truth?
The Museum and Archives committee were asked to hire consultants to examine the true operating costs and income potential of a Museum located at the City’s Pipe Shop. So they did as they were instructed to do. First they hired Lord Cultural Resources. Lord’s job was to bench mark the Museum’s marketplace potential in the setting of the Pipe Shop, in terms of income, expense and attendance, and then determine what its profit and loss potential would be in that setting. Here is the link to that report (http://nvma.ca/wp-content/uploads/2014/07/ BusinessCaseSummary.pdf). Lord is a highly respected global consulting firm with many successful projects to its credit. (http://www.lord.ca/).
The City asked for a second review, this time by a proven accounting firm. So the Museum and Archives committee hired Grant Thornton LLP, a highly respected International accounting firm with a global reputation. Grant Thornton built on The Lord analysis and did not disclose any findings that Lord’s analysis was in anyway flawed, which would indeed have been very hard to do. Lord was quite clear the financial performance of the Museum would compel quality skilled managers to keep a good eye on the bottom line and a strong hand on the financial tiller of the operation. Grant Thornton’s report showed the Museum in the Pipe Shop wouldn’t lose the $172,000 Keating, Mussato and the rest of the ‘Slate’ now claim, but that it would in fact break even. That is not to say that either Lord or Grant Thornton sugar coated the truth. They made clear that in order to break even, after existing funding commitments, the Museum would be compelled to adjust its programming and pricing to reflect market realities in a dynamic business environment, competing for each disposable buck. And that was only one of several principal reasons for the Museum to be located in the Shipyards Pipe Shop, in close proximity to the high traffic at the Friday Night market, just a short walking distance from the Sea-Bus and a large downtown populous. It also happens to be the physical location from which the City of North Vancouver made its mark on the world by building and refitting hundreds of ships which helped Allied Forces succeed in both European and Pacific theatres during WW-II. We have a storied past and there is truthfully no better place to tell that story than from the Pipe Shop setting (https://m.youtube.com/watch?v=DdTwuPcie1s).
But The Lord report underpinned a political issue that the Mayor and his ‘Slate’ have railed against throughout their entire mandate. The Lord study highlighted that as a community of little more than 52,000, the Museum would have to draw from a larger audience to be successful. In order to do so, Museum planners intended to tell what they saw as a regional story, which included both North Shore Districts as well as the City’s neighbouring First Nations peoples, whose ancestors have lived here since long before the North Shore was settled by European and Asian immigrants.
The Mayor and his ‘Slate’ have long opposed any mechanism that might work as a vehicle that may cause residents to think in terms of a single municipal entity for the North Shore, and I believe they saw a regional museum at the Pipe Shop as a potential problem that might cause residents to think about forming a more regional local government structure. Not to mention the fact that the Museum at the Pipe Shop may also work against the dreams and aspirations of at least one local developer and Mussatto supporter.
The Mayor’s ‘Slate’, unhappy with the location of the Museum at the Shipyards, a developing story which Mussatto has begun to describe as his ‘Mayoral Legacy’, took the unprecedented action of compelling a second accounting report undertaken to further test both Lord and Grant Thornton’s findings. This brings the total consulting expenditures on Museum studies thus far to an amount in excess of $250,000, and yet we still don’t have a Museum, or a clue where it will finally be located. More importantly, it raises the profile of a new political strategy and reality. If a study portrays an adverse outcome versus the political winds of the day, the City will now spend more and more taxpayer monies on more and more analysis until it can eventually secure the outcome local politicians like. And what kind of integrity does that disclose of our public officials? Not a good one! It paints a picture of a rather dishonest crowd.
The whole process discloses an uncomfortable truth which is that the Museum did not do all its homework in preparing to wage war with the City’s shifting political landscape, and the City for its part was less than forthright, if not downright dishonest in its public disclosure, positioning of the facts, and back room dealings regarding this most important cultural imperative. Both groups owed it to taxpayers to do a better job.
First, the City failed to disclose that it was already receiving a huge financial contribution specifically earmarked for a Museum purpose. It seems that when Pinnacle came to the City in 2006 seeking more density for all of the one dozen high rises it sought to develop on the Shipyard lands, a little horse-trading was undertaken. That horse-trading eventually resulted in the City receiving long-term control of three separate land parcels, each numerically identified.
The income being derived from the Tap and Barrel pub lands (parcel 7) were specifically ear-marked to go to a museum located at the Shipyards and the failure of the City to use these monies for the intended purpose is not just immoral, it is reprehensible.
The Pipe Shop lease has been reported as being as little as $30,000 per month ($360,000) per year, to as much as $80,000 per month ($960,000) per year. Both amounts explain the incredible price of a Beer, glass of wine or meal, but in any event would make quick work of any $172K annual loss complained about by Keating, Mussatto and the ‘Slate’. In reality, even if the BDO report compelled and commissioned at the City’s directive to kill the museum was correct, there would still be in excess of $180,000 of income left over from the Tap and Barrel after any loss. So Keating’s claim the museum represented an unreasonable taxpayer burden was untruthful!
Secondly, although the Museum could have done a better job with fund raising the City could also have allowed a longer period to secure funding. It was Keating and Mussatto who sought the tighter time limits, unlike the latitude granted to the photo Gallery which has already broken ground yet still hasn’t secured 100% of its project funding needs, and may actually generate an annual loss which will potentially become a burden on the City if that does happen.
However, what’s only been discussed behind closed doors thus far is the City and the Mayor’s program to scuttle the museum’s fund-raising efforts. Example: Did you know that Richardson’s has committed some $400,000 to the City for use at the Shipyard lands to be used as the City sees fit. This donation was in essence compensation for the impact of the grain silos and the political capital used-up by Mussatto and the ‘Slate’ in supporting the Moodyville densification. The Richardson’s commitment allows the money to go wherever the City decides, but Darrell and the ‘Slate’ have decided on a water park which will be the summertime use for the outdoor ice rink. This announcement will follow soon as the City is also about to announce the new Pinnacle proposal for development of Site 5, which will give Pinnacle more hotel rooms and convention space on that site.
That’s right, we’re going to give Pinnacle back the very land we took in trade for increased density to fund the museum at the Shipyards that we’re now not getting, and they get the density to-boot. If the words immoral crooks come to mind, then we’re on the same page. I’m thinking the same thing. But the fact is that the Richardson commitment could just as easily have been dedicated to the Museum, but for the fact that the Museum is not a part of the Mayor’s vision for his Legacy. Special note should also be made of the fact that Mussatto telling public gatherings the Museum in the Pipe-Shop “…wasn’t gonna happen…”, which words were also echoed by Keating in at least one Chamber of Commerce Board meeting over a year ago, didn’t help the business community with its interest in supporting the Museum. So imagine how the Port businesses felt about rubbing our little dictator the wrong way, and so they did not! They played ball and did not support the Museum. This was a problem for the committee who had counted on support from the likes of Washington Group and others for a museum that would showcase the North Shore’s shipbuilding history, especially in light of the $8 Billion shipbuilding contract currently underway at Washington Marine (Seaspan) Vancouver Shipyard, with noise PM Trudeau may further expand this contract.
What was equally interesting was that despite a huge fundraising initiative, nowhere on the City’s website, a PR mechanism for the Slate’s plans for our community, could you find one word about the Museum’s donation drive. The Photo Gallery initiative gets high profile support, but the Museum not so much. And when it came time for the Harper Government to once again seek re-election, Saxton came out 1 day before the writ was dropped pledging $2.2M for the Museum. In that Press Release, wherein you will typically find at minimum a perfunctory thank you from the local Mayor, the Mayor’s failure to provide even a thank you spoke loudest of all. Mussatto would not have voted for the museum project at the Pipe Shop under any circumstances as he had already written it out of the location in the deal he has negotiated behind the scenes with Pinnacle for his ‘Legacy’ initiative.
Lastly, when the City threw away the Flamborough Head and kept the $850,000 in donations it set a precedent. That being, if you don’t have the support of the Mayor and his ‘Slate’, your donation is but a tax grab. Donors were listening!