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Council rules out ‘status quo’ from Hamilton Waterfront Trust’s future

City politicians ask staff to study dissolving agency and bringing operations into city fold

Thestar.com
March 23, 2023
Teviah Moro

The “status quo” for the Hamilton Waterfront Trust isn’t among the mix as the new city council pursues a fresh approach to the harbour.

That involves studying the arm’s-length agency’s dissolution with the city taking over its functions.

Staff and consultants will also look at blending the trust and city into a “joint model” that splits duties.

“We’re not looking at carrying on the Hamilton Waterfront Trust as sole operator of the assets and the sole governor of the assets,” Coun. Cameron Kroetsch said Wednesday.

City politicians voted to follow that direction led by Kroetsch, who also serves as chair of the trust’s board.

Mayor Andrea Horwath, meanwhile, cautioned against ruling out a “similar option” to the existing model before exploring successful waterfront entities in other cities.

“I think it would do us a disservice to truncate this conversation just to get something done,” Horwath said, adding, “This is big-picture-thinking time.”

The waterfront trust was created in 2000 to steward development to connect Hamiltonians to the harbour.

Starting out with roughly $6.3 million in funding, the agency went on to undertake a series of projects, including harbourside parkland, the waterfront trail and amenities like Williams Fresh Café at Pier 8.

The trust has earned praise, but also city scrutiny amid financial struggles and concerns about transparency.

For instance, in 2017, the trust raised eyebrows for owing the city hundreds of thousand in tax arrears.

The next year, council voted to buy out its 45-year lease for the former Discovery Centre and its parking lots for $3 million, minus what it owed in unpaid taxes.

Overall, the trust has helped rejuvenate the harbourfront from a “toxic dump” into “a jewel in our crown,” said Horwath, but added the agency is now at a “turning point.”

Likewise, Coun. Tom Jackson said “there was a time (when) nobody would have wanted to even go down to the waterfront,” noting its value was “nowhere near” what it is nowadays.

Nonetheless, Jackson also warned a previous look at dissolving the trust to bring it under the city’s purview some years ago presented a financial “downside” to local taxpayers.

City staff said they couldn’t disclose that figure because it had been discussed in camera at the time.

The city must give the agency 12 months of notice upon deciding to terminate it, according to a deed of trust, which can be amended.

The agency is at a crossroads with harbour redevelopment wrapping up, calling into question its continued role as a manager of capital projects there.

Its leadership is also in flux, with longtime executive director Werner Plessl retiring last year and board members calling it quits. Mary Ann Cuthbert is interim executive director.

Meanwhile, the city has tapped consultant KPMG to examine the trust’s financial viability and offer advice if the organization opts to wind down.

On Wednesday, KPMG representatives summarized the pros and cons of three options: transferring the trust’s assets and operations to the city; outsourcing its duties to another entity; the status quo or a hybrid model.

Their report also discussed feedback from municipal staff and trust members that found a “difference in opinion” when it comes to the agency’s transparency.

All “expressed financial sustainability as a barrier to continued” operations.

However, the feedback also asserted the city “retains the ability, but not the capacity, to absorb Trust operations.”

City staff echoed that concern and didn’t include pursuing the trust’s dissolution and a city takeover among its recommendations.

In addition to questions of operational capacity, there’s a “lack of alignment” of services, including those like the café that focus on hospitality, suggested Mike Zegarac, general manager of finance.

But Coun. Brad Clark argued the city has the “wherewithal” to handle the trust’s services, including experience with food services in arenas.

With the trust employees in mind -- there are roughly 100 during peak season -- the city should indicate that it will “backstop” them if their employer closes shop, Clark said. “They’re hearing the debate, too.”

Zegarac couldn’t say when exactly staff might return with a “road map” of the process ahead but suggested they could offer council a report at the end of this year or in early 2024.

The general issues committee decision awaits final approval at council next week.