Backgrounder: New casino and convention development in Toronto |
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The City of Toronto today released a report by City Manager Joe Pennachetti, New Casino & Convention Development in Toronto: http://www.toronto.ca/legdocs/mmis/2013/ex/bgrd/backgroundfile-57336.pdf, which will be considered at the April 15, 2013 meeting of the City's Executive Committee. The report seeks to inform Council's decision on whether to consent to a new casino in the Toronto C1 (downtown) zone, and also recommends expansion of the existing gaming facility at Woodbine in the C2 zone.
Toronto currently has a gaming facility (slots at racetrack) at a permanent location at Woodbine, and a temporary casino at the annual Canadian National Exhibition.
The report is one of the most comprehensive ever prepared by staff for Toronto City Council consideration. It comprises an 84-page report and seven appendices.
The report comprises the following sections:
• Section A outlines the staff analysis on the issue of expanded gaming development in Toronto, and an approach for Council's consideration.
• Section B provides an overview of the City's engagement strategy and the results of a public opinion telephone survey, public consultation and stakeholder meetings.
• Section C provides recommendations and an overview of implementation considerations should Council support the establishment of a new casino. It also outlines a process for Council to be advised on the ability of the Ontario Lottery and Gaming Corporation (OLG) and the casino proponent to meet City conditions following the completion of OLG's procurement process.
The report outlines a strategy for both the C1 and C2 gaming zones to support economic development and city building objectives.
Toronto C1 (downtown) zone
From a staff perspective, it is critical for a casino development in the C1 zone to include the development of top-rate convention and trade show infrastructure to improve Toronto's competitiveness in this market. A top-rate convention centre is potentially a bigger tourism draw than a casino and could attract more than 130,000 additional visitors annually and generate an additional $392 million of direct spending. Construction of a convention and casino development is estimated to generated 6,200 to 7,000 net new construction-related jobs, as well as approximately 10,000 net new operations and convention jobs.
City Planning's analysis of the C1 zone demonstrates that the downtown core and Exhibition Place study areas are potentially suitable locations for a casino convention centre focused development. The third area of study, the Port Lands, is not considered an appropriate location for a casino as this use would be inconsistent with the emerging vision for the Port Lands as a live-work community.
In the report, City Planning recommends an appropriate sized casino gaming floor of 135,000 square feet, with a regulated number of slot machines and games, limited casino related food, beverage and retail uses. It also recommends increasing convention space as part of a casino development to help mitigate land use impacts in the area.
However, to achieve the City's key condition of new convention infrastructure in addition to obtaining a fair hosting fee, OLG has indicated that a minimum casino gaming floor of 175,000 square feet is required to generate enough revenues for the facility to be viable. Given City Planning's analysis, the City requires further information from OLG on actual market interest and ability to meet the City's conditions based on both options.
Key conditions for new casino development
Should Council consent to new casino development in Toronto, Appendix A http://www.toronto.ca/legdocs/mmis/2013/ex/bgrd/backgroundfile-57338.pdf of the report provides a complete list of conditions to be included in the OLG's procurement process. Following is a summary of these conditions:
• The OLG and the casino proponent provide the City with options for a new C1 casino with a gaming floor of 135,000 and up to 175,000 square feet of gaming space.
• The proponent develop convention and trade show meeting space concurrent with the casino that includes at least 813,000 square feet of total exhibit space in addition to 235,000 square feet of meeting/ballroom space.
• The casino operator(s) work with the City's Economic Development and Culture Division to minimize impacts to existing businesses and jobs.
• The OLG and proponent consider location options in the downtown core study area and Exhibition Place areas.
• The proponent take responsibility for funding transportation and other infrastructure it requires related to casino development.
• The OLG require the selected operator(s), including casino, convention centre and hotel, to implement a Toronto Casino Social Contract including harm mitigation strategies, social procurement opportunities, community use of space agreements for cultural events, and measuring and monitoring systems.
• A casino proposal achieve consistency with City policies and guidelines respecting planning, development, transportation, infrastructure and urban design.
• In the C1 zone, Toronto should receive a hosting fee from gaming revenues received by OLG that is equivalent to half the amount of all revenues the province receives from casino operations in Toronto, but no less than an annual minimum of $100 million (adjusted annually to inflation).
• For an expanded gaming facility in the C2 zone, the City must receive a hosting fee equal to the $15 million it currently receives from the existing Woodbine slot operations plus the amount received by the province from any gaming revenue exceeding the $600 million it currently receives from the existing Woodbine slot operation.
•The proponent undertake an economic impact assessment, developing an event management plan to coordinate with other events in proximity to the site, and requiring the proponent to demonstrate how the facility will contribute positively to existing businesses in the vicinity (e.g. agreements to purchase blocks of tickets from nearby theatres).
C2 zone (Woodbine)
In the C2 zone, staff analysis indicates that expansion of the casino to include live dealer table games and enable expanded entertainment and retail facility would potentially generate 4,000 net new construction-related full-time jobs over a three-year period and 1,600 net new operations jobs.
The expansion has the potential to support additional development on this site that is in keeping with both the planning and economic framework for Woodbine as an entertainment and retail destination, approved by City Council in 2007. Given the rise in job losses in northwest Toronto and the threatened nature of the horse racing industry, expanding Woodbine supports broader revitalization plans for the area.
The OLG has indicated that it does not support immediate expansion at Woodbine, however a small or modest expansion may be considered.
Health and social considerations
The Medical Officer of Health has submitted a series of reports to the Board of Health. The reports indicate problem gambling is a public health concern due to impacts on the health of gamblers and the community at large.
The City Manager's report includes as part of its conditions calling for the OLG and selected operators to work with the City to implement a Toronto Casino Social Contract to ensure investments support the social and economic well-being of the city, should Council decide to consent to new casino development.
The OLG has indicated there will be a casino in the Greater Toronto Area (GTA) in the C1 zone. Regardless of whether a new casino is located in Toronto or an adjacent municipality, the potential for social and health risks associated with increased access by Toronto residents to gaming are essentially the same.
The public consultation process
Regulation 81/12 of the Ontario Lottery and Gaming Corporation Act, 1999, requires the potential host municipality to conduct public consultation on establishing a new gaming site. At the November 5, 2012 meeting of Executive Committee, the City Manager was directed to conduct a public consultation process. The engagement plan included a telephone survey by Environics, stakeholder interviews and consultations with the public.
The Environics poll was a telephone survey of 902 Torontonians, with representation from across the City of Toronto. The sample used yields a margin of error of 3.3% (at the 95% confidence level). The data was statistically weighted to ensure the sample's regional, age and gender composition reflects that of the City's population.
Stakeholder interviews were conducted with various organizations on the potential for expanded gaming in Toronto. Twenty-nine organizations were contacted for interviews; representatives of 19 organizations took part in the interviews.
Through the public consultation process conducted by DPRA, 17,780 feedback forms were completed, and five public meetings were held. The input from the forms reflects the views of the participants and is not to be interpreted as demographically or statistically representative of the views of the Toronto population.
The results of the engagement indicated that views are split on the expansion of casino development in Toronto, with the majority of respondents opposed to a new casino development.
The telephone survey found that 50 per cent of people were opposed to a new casino, 42 per cent were in support and 8 per cent were not sure/had mixed feelings. The majority of those opposed to a casino (61 per cent) cited concerns about social problems while another 17 per cent indicated crime is a concern. Of those who supported a casino, 44 per cent cited job creation followed by 38 per cent citing revenues as the top reasons.
In terms of preferred locations for a casino in C1, 36 per cent of respondents in the telephone poll selected Exhibition Place, 20 per cent the Port Lands and 9 per cent the downtown core. For C2 (Woodbine), 55 per cent support expansion at Woodbine, 33 per cent oppose and 11 per cent don't know or had mixed feelings.
Toronto residents expressed interest in being able to influence the nature of development of a new casino if there was a chance it could be located along the city's perimeter with 53% of poll respondents indicating they would "rather the casino be in Toronto than in an adjacent municipality so Toronto could better plan for and decide on its development."
Through the feedback forms, 71 per cent of respondents indicated they were opposed to a new casino, 26 per cent were in support and 3 per cent were unsure/had mixed feelings. Eighteen per cent of respondents indicated that Exhibition Place was most suitable for a new casino development, 16 per cent selected the downtown core and 13 per cent, the Port Lands.
The final report on the public consultation conducted by DPRA is included as Appendix F http://www.toronto.ca/legdocs/mmis/2013/ex/bgrd/backgroundfile-57343.pdf in the City Manager's report and the Environics poll is included as Appendix G http://www.toronto.ca/legdocs/mmis/2013/ex/bgrd/backgroundfile-57344.pdf
OLG's modernization plan
In July 2010, the Government of Ontario directed the OLG to modernize commercial and charitable gaming. The modernization plan the OLG is pursuing will significantly expand access to gaming to residents in Toronto and across Ontario. In its plan, the OLG has identified 29 zones across Ontario in which it intends to offer a gaming venue. Two of the zones (C1 and C2), in which the OLG intends to issue an RFP for a private service provider to develop and/or operate a casino, include lands within the City of Toronto, as well as lands within the adjacent Greater Toronto Area (GTA) municipalities.
Regulation 81/12 of the Ontario Lottery and Gaming Corporation Act
The OLG has the authority to establish a gaming site in a municipality. However, regulation under the Ontario Lottery and Gaming Corporation Act, 1999, provides for a number of preconditions to OLG authorization. One of these is a resolution of the municipal council supporting establishment of the gaming site in the municipality. The regulation effectively prohibits the OLG from establishing a gaming site without the requisite municipal council resolution.
City's decision history
May 14, 2012: The City's Executive Committee considered two member motions referred by City Council related to casinos. The Committee referred both items to the City Manager, requesting that he consult with the OLG on its ongoing process for the selection of future casino locations in the GTA. The City Manager was also asked to report back to the Committee "on the provincial process and the pros and cons of hosting a commercial casino in Toronto, including projected job creation, revenue to the City, tourist attraction, and social impact."
At the May 14 meeting, the Executive Committee also requested that the City Solicitor, in consultation with the City Manager, report to the Executive Committee on October 9, 2012, on the "appropriateness of, and any ways and means, to facilitate a ban on lobbying by the gambling industry, casino organizations and agencies that regulate gaming". The report from the City Solicitor concluded that a ban is not appropriate and that "the City's current regulatory regime is sufficient to effect transparency."
The November 5, 2012 report from the City Manager responded to the directives of the May 14, 2012 meeting of Executive Committee. The report provides a summary of the provincial government process to license new gaming venues; the municipal planning process; and the pros and cons of various gaming and development options. The report included preliminary analysis of anticipated financial, economic and social impacts.
The Executive Committee authorized the City Manager to conduct public consultations based on the staff report and technical report by Ernst & Young, and report back in March 2013. Direction was also given to report on a temporary casino, establishing a "social contract", and recommendations on preferred locations, size and type of facility and potential revenues from a hosting arrangement.
The issue of a new casino in Toronto has also been deliberated at meetings of Toronto and East York Community Council, Scarborough Community Council and the Board of Health.
Pending decisions made at the City's Executive Committee on April 15, the matter will be considered at a special or regular meeting of Toronto City Council.
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