Don't Cry For Windsor, Councillor Valentinis
So now the Capitol may not be going into bankruptcy.
- Wow!!! This Capitol Theatre saga is getting as complicated as any Elizabethan play I ever studied in high school. It makes Hamlet look easy to understand. However, I have not yet figured out whether it is a Comedy or Tragedy.
- A recent Press Release gives another chance for the distinguished Councillor of Ward 3 to cry out "Why not Windsor?" after he reads this story:
"McGuinty Government Invests $4 Million In London Sport And Recreation Facilities
Key Element In Strategy To Further Boost Jobs And Economic Renewal
LONDON — The McGuinty government is providing $4 million to the city of London to upgrade the North London Optimist Community Centre and the Thames Pool as part of the province’s $190 million economic stimulus plan, Health Promotion Minister Jim Watson announced today.
“Active living is crucial to good health,” said Watson. “Improving these facilities will encourage the people of this community to participate in physical activities and achieve a better quality of life...
The government’s $190 million economic stimulus package is a key component of the plan to foster a stronger workforce and a stronger economy.
Announced in the 2006 Fall Economic Outlook and Fiscal Review, the stimulus package aims to boost jobs and growth through a focus on four key areas:
- Focused training and job services to help job-threatened and laid-off workers find new jobs
- Fast-tracking infrastructure projects to generate immediate economic activity and job creation
- Encouraging Ontario tourism to boost economic activity and tourism-related jobs...”
I can figure out that the Capitol does not fall under this program but if the Province had given us cash for the arena already there might have been some money for the Capitol. The City Treasurer was right when he said that the East End arena would suck up money from other projects.
Back to the Capitol...Can you figure out who is telling us the real story in all of this and who is not. I am having difficulty. Charge, counter-charge...statement, counter-statement. It's not productive; it's counter-productive one might even say if one is trying actually to salvage the Capitol. Let's try and make some sense out of this.
The Mayor, Council and Administration can read the newspaper as well as I. In July, 2006, it looked like the Capitol was doing fine financially. It was "operating $100,000 in the black" but warned:
- "it may not always stay that way, despite cost-saving measures that have been taken.
Hundreds of thousands of dollars" in bingo revenues have been lost because the bingo business has taken a nosedive."
They were right...on September 9, 2006, only 2 months later, we read
- "The Capitol Theatre is struggling financially, projecting up to a $300,000 deficit when the fiscal year ends in June."
Administration's Report also identified on September 25, 2006 that that the Capitol's deficit in 2007 could be $366,650. The City can hardly claim that they did not know 6 months ago how bad the situation was.
Now I have to ask any business person amongst my readers that if you go into your Bank and throw your office keys on the table, does that sound like you are in good financial health! It is saying, "Here take the business, it's yours."
Effectively, isn't that exactly what the Capitol did on January 29, 2007 at the Council meeting:
- "John Funnell, President; and Tom Lynd, 1st Vice President and Acting General Manager, Capitol Theatre and Arts Centre, appear before Council to state that at the Annual General Meeting of the Capitol held on January 23, 2007, a motion was adopted granting approval for transfer of the operating entity known as the Capitol Theatre and Arts Centre, along with current assets of the Capitol to the City of Windsor for the purpose of preserving this community cultural asset."
And Council accepted it by Resolution
- "Council Resolution 01-29-07
That City Council ACCEPT the transfer of the operating entity known as the Capitol Theatre and Arts Centre (Windsor) along with the transfer of all capital and current assets of the organization to the City of Windsor for the purpose of preserving this community cultural asset; and
That the Chief Administrative Officer BE DIRECTED to work with the current Board and staff of the Capitol to bring about an orderly transition and √dissolution of the operation with full √ √that the Board provide full√ disclosure to the Chief Administrative Officer; and further,
That the Chief Administrative Officer BE DIRECTED to perform due diligence on behalf of the City and bring back a report to Council regarding costs associated with the facility, options for it’s future use, as well as suggestions for a new Board, with input from the Arts Council Windsor & Region and the various Theatre/Artists groups who utilize the facility."
Now there seems to be some confusion as to what the City knew and when. I wish the City left their reports online so that you can read them after the Council meetings but of course they do not. So let me give you the highlights of what Administration told Council in their report that was presented at the February 19 Council meeting. It's a lot to read so take your time and I will make comments as you read through it:
- A meeting was held on February 5, 2007 with members of the transition team and Capitol Theatre Board members. The meeting was positive and established a collaborative working relationship. [So far so good. No hint of problems between the parties]
It was also agreed that City of Windsor staff may attend the Capitol Theatre Board meetings as observers only and that regular meetings with the Capitol Board would continue to ensure an orderly transition. [City knew everything]
The Chief Administrative Officer and the Executive Assistant to the Chief Administrative Officer attended the Capitol Theatre Board meeting of February 13, 2007. Financial information presented at the meeting identified the magnitude of the required cash infusion to sustain the Capitol Theatre to June 30, 2007. It was suggested that the Capitol Board submit a letter to the City of Windsor advising the Mayor and City Council of the following: [Financial problem identified]
--Capital Board could wind down operations to facilitate a transition for the operations.
--What the financial requirements would be to allow for an orderly transition [Administration knew exactly the financial position and no alarm bells were rung]
A next step in the process will be the preparation of an Expression of Interest or Request for Proposals to determine the level of interest from outside organizations to operate and manage the Capitol Theatre. [Global Spectrum or whomever, here you go!]
The transition plan would require the financial assistance of up to $285,000 should the process take until June 30, 2007 to complete. [Oh my, a specific sum was known]
It is Administration’s recommendation that the first payment be used to transfer the general security of the assets to the City of Windsor. [The $50,000 security I assume. Again, no big deal. They contemplate the first City payment dealing with this so why the fuss subsequently?]
To eliminate any ambiguity the Capitol Theatre Board must also clearly demonstrate that their cash flow cannot meet the demands of their creditors. [Administration is talking the "insolvency" definition under the Bankruptcy Act. Again, no panic and the financial details were known]
- Excerpts from February 14, 2007 letter from the Capitol
TO THE MAYOR AND MEMBERS OF COUNCIL
Board members attended a meeting on Feburary 5 at City Hall with the Chief Administrative Officer (CAO) and city staff and the CAO attended the February 13, 2007 Board meeting at the Capitol. The Board expressed concern that the Capitol will be able to make payroll due on February 23, 2007 but will not be able to pay any of the outstanding accounts payable which total $88,502.58 as of February 13, 2007. In addition there is an outstanding loan in the amount of $50,000.00 which is secured by a General Security Agreement and a lease for computer hardware and software which is repayable in the amount of $11,545.51. [Effectively, the Board stated in mid-February that they were insolvent so no big deal]
The attached cash flow projection prepared the City to the end of June indicates an accumulated deficit of $284,218.57 at June 30, 2007. [Financial information was presented]
At the meeting with the Board on February 13 the CAO requested the Board to advise of the earliest date when the Capitol Board could win down operations and requested an estimate of the amount of money from the City which will be necessary to meet the financial needs of the Capitol and allow for an orderly transition and dissolution of the operations per the above resolution. [Everythng is friendly and preparing for an "orderly transition"]
The Capitol Board deliberated on this requres and adopted a resolution that the Board is agreeable to the transfer of the operating entity known as the Capitol Theatre and Arts Centre (Windsor) as early as March 31, 2007 pursuant to Council’s decision in the first paragraph of CR46/2007. This would allow Council to appoint a new board as suggested in the final paragraph of the resolution. Transition on this date would require funding from Council in the amount of $213,000.00. This would allow us to pay all the accounts payable that are outstanding at February 13 and retire the $50,000.00 loan and computer lease. [Full disclosure about the $50,000 security]
It is critical that funding be provided immediately since some creditors have placed holds on accounts and are not advancing further credit. Operations will stop if utilities arrears are not paid and service is cut off. This will also shut down the Chrysler Theatre Box Office which is operating on the Capitol’s server/box office system. Advance of funds to pay creditors and retire the $50,000.00 loan will allow the city to protect its interests with a new General Security Agreement on the assets. This request for and advance should be considered by City Council no later than February 19, 2007 to establish a process for payment of creditors. [City knew the Capitol was insolvent and that money would be used to pay off the security]
This will necessitate an initial transfer of $60,000.00 before the end of Februrary to begin addressing critical payables and establishment of a schedule for payment of the remaining money necessary to allow operations to continue until the established transition date. [Payment to be made of $60,000 and since the $50,000 would be paid off, then the City's amount would rank first]
It all seemed a go with the Council resolution on the 19th and no big problems at Council. The transition seemed orderly and well-planned out. Then for some reason it all fell apart and we got the High Noon drama.
Where the "blank cheque" idea came from , I am not sure either but it makes nice press and makes Eddie sound fiscally responsible.
So can you figure it all out and what it is happening. My best guess as to what is going on:
- The City wants the Capitol to blink and put itself into bankruptcy so the 12 Capitol employees do not become City employees
- I would be interested to know if the City has the legal right to the Capitol building in the event of bankruptcy or is this just a big bluff saying it does, not expecting anyone to question it or contest it.
- Are the Capitol and East End arena now going to be packaged in one nice deal for someone to manage using their own employees, not City employees eg like a Global Spectrum for instance who appeared at Council during an arena meeting
- Whatever happened to the old Salvation Army building and how does it fit into this
Is this what all of this drama and tension is about. Your guess is as good as mine. It will play itself out soon. Just watch and see. After all, Eddie does have a Plan, he always has a Plan as a Councillor once told me.
Wouldn't it be a hoot if the Capitol just decided to carry on seeing as there is a big bequest coming. In fact, the worst thing for taxpayers may be the Capitol's bankruptcy since someone might be able to buy the whole thing for pennies on the dollar from the Trustee and scoop it if the City has no right to the building. Wouldn't that be a huge shock to Council and the Community! Has anyone in Administration considered this?
Where is Shakespeare when you need him to write a play!