Supersized casino story
"Abnormal in the extreme," is how Doug McArthur, SFU professor of public policy describes the length of time it took PavCo to select Paragon Gaming. MLA Spencer Chandra Herbert says, "The sequence of the events was exceptionally fast for government." Both say a secretive, flawed process has resulted in the provincial government and a Nevada-based gaming company gaining a chance to expand gambling in Vancouver three times over. And some city officials say they aren't at all convinced that this is what the people of Vancouver need and want.
"This is a complete stall tactic. A delay tactic. There’s no reason for them to do this. I don’t know if they are trying to hide something, given that the deadline is looming. I’ve been asking for this information since last spring," he said.
"I need to see the RFEI [request for expression of interest] and the RFQ [request for quotation], because they might have written them in such a way that there could only be one bidder," Chandra Herbert said.
Minister Krueger, who is now Minister of Social Development, did not respond to VO's request for comments by publication time.
The evaluation process
In the spring of 2010, PavCo announced a 70-year lease agreement with Paragon Development Ltd. for two acres of BC Place west side lands. However, the gaming company was notified of its selection as a preferred proponent on June 29, 2009.
The selection of Paragon Gaming and an entertainment resort, including the casino and two hotels, was based on who submitted the best proposal for the property, one that would best suit the stadium, Crosley said.
“[This means] anything that would add to the area, that would create a synergistic effect to the stadium and would help the stadium and its business.”
In a standard land deal, the government starts the process by putting the land on the market and asking bidders to set out uses, bid price, and terms and conditions, said SFU professor McArthur. "In the tender call, the government would set out any terms and conditions it expects to be met."
"Abnormal in the extreme," is how McArthur describes the length of time it took PavCo to select Paragon Gaming.
The three-step process involving the preparation of tender documents, followed by the public announcement of calls for proposals and finally the return of proposals by bidders can take up to one year, he said. "It would not be unusual."
The BC Place project took 16 weeks, Crosley said.
The selection process for a bidder for the RCMP E Division Headquarters Relocation, a P3 project, lasted over two years. On February 6, 2008 advance vendor notification was issued and on April 22, 2010 the project agreement was signed.
"The average length of a procurement process [for a public-private partnership], from the release of the request for qualifications (RFQ) to financial close (signing of the project agreement with the Preferred Proponent) is 14 - 18 months," Katie White, Senior Communications Consultant for Partnerships BC, a government-owned company that oversees public-private partnerships in the province, wrote in an e-mail to VO.
A necessary move
Paragon Gaming, the BC Place casino developers, own the Edgewater Casino at Plaza of Nations, but their lease expires in 2013. Had they not received the 70-year lease agreement for the land at BC Place, Paragon would have had to find another home for Edgewater, renew their lease, or the casino would have had to cease operations.
"This casino relocation is necessary because Edgewater Casino's lease with the City of Vancouver at its current location ends in 2013," wrote a senior public affairs officer from the Ministry of Public Safety and Solicitor General, the ministry responsible for gaming, in a e-mail to VO.
Solicitor General Rich Coleman declined an interview with VO.
At the time PavCo was receiving proposals, everybody knew that Paragon would need to move the casino, Chandra Herbert said. There’s only one casino license available in the city, he pointed out. "This seems to suggest to me that there’s a strong likelihood that PavCo knew they would apply."
When asked if Paragon would have moved to another location without the BC Place development, Tamara Hicks, Director of Corporate Affairs and Communications for Paragon, said, "Paragon is not the owner of the Edgewater lands and is subject to a lease that expires in 2013."
If the casino development had been a public-private partnership, it likely would have been subjected to a very different evaluation process. The selection of a preferred proponent for the expansion of Surrey Memorial Hospital involved a competitive selection process overseen by a fairness adviser.
This is standard practice for Partnerships BC, said Dave Ingram, Executive Director of Public-Private Partnerships for Fraser Health Authority.