The letters exchanged between the City of Prince George and the Northern Development Initiative Trust over the past year about the hotel project next to the public library provide a behind-the-scenes glimpse at what happens when bureaucrats and politicians with competing agendas begin butting heads over pots of money and who controls them.
The letters and related documents show the trust expressing serious concerns with the city's efforts to revive the hotel project.
After work finally began in 2013, the project ground to a halt in early 2014, its bare foundation and exposed rebar forming an embarrassing eyesore on the downtown landscape for more than two years.
Work finally resumed this past July after local developer Rod McLeod found some new partners to back the $35-million effort.
One of those partners was the City of Prince George, willing to bet millions of dollars of public money on the new hotel.
Not only did the city want to empty a business revitalization account containing more than $3 million being held by the trust, local government sought an additional $1.7 million in NDIT support.
Following a recommendation from staff, the trust's board of directors denied that request for more money last February.
"Staff is concerned with...the magnitude of funding being invested in a hotel project that already has a track record of failure," said the briefing notes to the board. "Staff are also concerned about the ability for the Trust to recoup funds from the hotel project should it fail financially a second time. In the event of a default of tax payment by the land owner, the City is not required to pass on any type of payment to the Trust."
As for that existing pot of money, NDIT staff admitted "the Trust has no control over the magnitude of grant or type of development - those specifics are controlled at the discretion of the City of Prince George, meaning that all of the funds available could be disbursed for a single project or disbursed over multiple projects."
Before this ask, the city had made a handful of small dips into the account to encourage several projects.
Now it wanted to spend the whole amount - and then some - on one single development.
Talk about putting all the eggs in one basket.
And then it got worse.
To calm the anxious folks at the trust, the city, through an email from planning and development manager Ian Wells, promised "not to apply for any additional NDIT funding for 10 years commencing in 2017."
In other words, the city was so dedicated to this project that it was willing to tie the hands of the mayor and councils elected in 2018, 2022 and for part of the term for the 2026 council when it came to accessing economic development money from NDIT. Implicit in the vow is the preposterous belief that the hotel is the only project worth spending this money on over the next decade.
It's one thing for a mayor and council to borrow money over a 10 or 20-year term for a major public infrastructure project like a pool or public but it's quite another thing to spend both today's and tomorrow's economic development money backing a single private development.
Never mind the inconvenience forced on the future elected and bureaucratic leaders of Prince George unable to access NDIT funds until 2027.
What about the worthy local businesses and their owners with valuable projects that could use the benefit of these funds over 10 years? Sorry, mayor and council in 2017 decided the Marriott hotel was more valuable than all of your projects combined.
This is where the value of the arms length relationship NDIT has with local government came in handy.
The trust was formed 10 years ago to manage the $185 million it received in seed money in perpetuity, not to blow the cash out the door on the pet project of local governments of the day.
By its very nature, NDIT looks for safe bets, where it will be paid back in due course on what amounts to an interest-free loan to foster business activity.
Emptying an incentive account solely for the hotel is questionable at best. Throwing in dollars set aside for future city councils to support future business development in Prince George is a horrible mistake.
-- Managing editor Neil Godbout
