Paragon of haste

Ian Reid

Posted: Feb 9th, 2011

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Paragon Gaming's Scott Menke flipping cards in a photograph by Peter Hoist

“Stop the expansion of gambling that has increased gambling addiction and put new strains on families,” promised the BC Liberals during the 2001 elections.   A decade after the BC Liberals took power their 2001 campaign promise to “stop the expansion of gaming” lies bloodied and broken in the ditch along with promises like providing “open and honest government” and “making children the number one priority.”

There’s no better example than Vancouver’s newest casino project on the BC Place lands, announced by the Premier himself one year ago.   The $450 million deal is a partnership between BC Place and Paragon Gaming, a privately held Las Vegas gaming company that owns the Edgewater Casino at the Plaza of Nations, just south of BC Place Stadium.

It’s a deal that significantly expands gaming in the City of Vancouver and robs citizens of the development levies and amenity contributions that pay for civic services. And it was done with all the hallmarks of a political deal a la BC Rail.

In an eight-page advertising supplement on January 29 in the Vancouver Sun this week, Paragon Gaming claimed the city would receive $23 million in revenue from the casino expansion.

The $23 million figure is pure PR. It's based on two things: property tax and gaming revenue that by law must go to the city (Gaming Control Act). The property tax portion (6-7 million) is an estimate and that would be paid by any development, casino, residential towers, horse barns, whatever. And the $17 million in gaming revenue is a projection, based on the projected revenue figures for the casino. If Paragon doesn't make their projections they won't contribute the $17 million, because the formula is based on a percentage of the actual revenues not projected revenues. And the current Edgewater casino has never met its revenue projections, falling short in some years by up to 50%.

Here's a story from 2005 about that. As reported by the 24Hrs Vancouver: "On a muggy July morning before a long summer break, Vancouver city councillors opened their staff reports to find their city's revenue projection short almost $2.5 million.
"…The city had been relying on a $7.0 million windfall in revenue from the newly-opened Edgewater Casino along False Creek. Instead, competition from other municipalities saw the casino pull in only $5.4 million, and the city found itself in the awkward position of debating how to help the casino jack up its profit.

Unseemly Haste

The Liberal government announced the deal with Paragon Gaming in the spring of 2010 but the actual decision was made months earlier on May 22nd, just days after the May 2009 election. That’s when the BC Pavilion Corporation (PavCo), the crown corporation responsible for BC Place, picked Paragon as the winner of one of the shortest proposal calls for a project this size on record.

The quickstep timing of PavCo’s proposal call alone raises significant questions about the deal. The process began March 6, 2009 with a call for expressions of interest in developing the lands adjacent to BC Place. On April 20th the two lone proponents were invited to respond to a request for proposals. The whole process took less than 11 weeks.

Eleven weeks to put proposals together, find financing, review city planning documents, determine allowable uses, conduct market studies, configure the site, set up partnerships, determine financial viability. And that’s just on the proponent side.