Critics are calling an open bid to the private sector for Abbotsford’s Tradex building short-sighted, but the mayor says it’s merely “fiscal discipline.”
An outcry is being voiced from industry leaders and event organizers should the building no longer serve as a regional events venue, but these fears are premature, says Mayor Henry Braun.
“Council has made no decisions,” Braun said. “We’re trying to give the private sector as much latitude to think outside of the box as possible.”
Tourism Abbotsford, the non-profit currently contracted to operate Tradex events, released figures in their 2019 Economic Impact Study on Sept. 22, alongside criticism of council’s decision to sell or lease Tradex.
According to the analysis, approximately five million people have attended some 1,026 events at Tradex since 2003, generating an estimated $222 million in revenue in Abbotsford and adding $12.7 million to B.C.’s GDP and $8.8 million in labour income from 464 jobs.
Events generated $19.3 million in local direct spending in 2019 alone (up 30 per cent since 2016), according to the study.
“A private-sector tenant might put more cash directly into the city’s own bank account, (but) it is extremely unlikely that any other use would generate the direct and indirect spending for local Abbotsford businesses that arises from meetings, exhibitions, and events,” said Daniel Laverick, chair of Tourism Abbotsford’s volunteer board.
The city’s tender has two options – one to sell the building and the other to lease it – with the city retaining ownership of the land.
RELATED: City of Abbotsford seeks proposals for operation of Tradex
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The building was worth just over $6.1 million as of July 1, 2020, according to the BC Assessment Authority website. Any sale of the building would come with an annual land lease of $6.19 per square metre – a total of almost $325,000.
Other industry leaders say privatization would betray the Tradex’s original purpose when it was built by the province in 1991: to increase economic activity and tourism for the entire region, not just Abbotsford.
When the B.C. Pavilion Corporation transferred ownership to the city for $1 in 2003, it was done under the provision that it would be kept as a community amenity to serve the regional economy, according to Walt Judas, CEO of the Tourism Industry Association of BC (TIABC).
“It is, from our perspective, a community asset that needs to stay as a community asset,” Judas said.
While the city has a financial responsibility to maximize utility of its valuable assets, he speculates something “quite lucrative” was proposed to the city, prompting the review.
Braun said it was simply part of an annual asset review to find structural deficits built into the municipal budget.
He said because Tourism Abbotsford’s contract ends at the end of 2022, council is trying to create a “revenue-generating asset” to relieve pressure on taxpayers, adding that the city has an estimated $1.9 billion in infrastructure costs over the next 25 years.
The city has poured $5 million into the building since 2003 for air conditioning, roof repairs, lighting upgrades and other renovations, according to Braun, while getting only $95,000 a year back through capital improvement funds ($1.45 million to date).
“We have received zero dollars for lease,” Braun said. “There’s not a businessman in Abbotsford who wouldn’t want a city facility that they don’t have to pay rent on … How good a deal is that?”
But Tourism Abbotsford doesn’t run on a profit model, and the contract is based on generating “incremental economic activity,” which has proven successful, said executive director Craig Nichols.
He said their operations have actually defied industry norms by delivering returns – totalling $900,000 – sunk back into the facility.
“To sell that asset out to a private enterprise at the expense of that economic impact is very, very hurtful for our local industry,” Nichols said, adding he has been getting daily emails and calls from anxious clientele.
Earlier this year, a petition to the city was created by event producers, and letters were sent from TIABC and the BC Hotel Association (BCHA), lobbying to keep the site as an events venue.
RELATED: Show producers start petition against city’s call for Tradex proposals
Tradex events have a significant impact on local hotel revenues, accounting for upwards of 15 per cent of bookings by some estimates.
The loss would have a “ripple effect” on tourism throughout the entire Fraser Valley, said Ingrid Jarrett, president and CEO of BCHA.
Braun repeatedly stressed these concerns are hypotheticals, and council will not preclude proposals for an events centre (including one from Tourism Abbotsford).
He also posed that many Tradex events could move to other venues, and he only knows of three or four that couldn’t be held at Abbotsford Centre.
A consortium of event organizers, however, say if Tradex is no longer available, they will be taking their shows elsewhere.
Most of the 75 members of the Tradex Exposition Industry Task Force need the entirety of Tradex’s 120,000 square feet to hold their events, according to Nanette Jacques, show manager of the Pet Lover Show.
She has compiled an incomplete list on the position of 34 members, only five of which were able or willing to go to smaller venues in the city.
“If we are not in Abbotsford, we are in downtown Vancouver,” Jacques said. “This isn’t a grey area. This isn’t a maybe-something-might-work situation – 100 per cent, we are all gone.”
– with files from Vikki Hopes
@portmoodypigeon
patrick.penner@missioncityrecord.com
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