UPDATED 8:21 p.m. Tuesday

A public statement on the future of the proposed convention centre in downtown Halifax is set for Thursday, as another hurdle facing the development was cleared Tuesday at city hall.

After some heated debate, Halifax regional council endorsed an agreement with the Nova Scotia government over the centre.

Council already voted in favour of the convention complex in December 2010 and has now approved a memorandum of agreement outlining funding and operating arrangements between the two governments.

Halifax developer Rank Inc. has sent out invitations for “a special announcement” about the planned project. Politicians from all three levels of government have been asked to attend the event at Neptune Theatre at 10:30 a.m.

Council voted 19-5 Tuesday in favour of carrying out the agreement that municipal and provincial staff hammered out.

Councillors Jennifer Watts (Connaught-Quinpool), Jackie Barkhouse (Woodside-Eastern Passage), Debbie Hum (Rockingham-Wentworth), Peter Lund (Hammonds Plains-St. Margarets) and Reg Rankin (Timberlea-Prospect) voted against the agreement.

“A lot of people say that this (convention centre) is not the silver bullet — (that) this is not going to help our downtown,” said Coun. Dawn Sloane (Halifax Downtown).

“This is just one of the things that can help. When you bring in economic drivers such as a convention centre, the spinoffs are unbelievable.”

But it is clear not all councillors are happy about the project moving ahead.

Hum said it’s too big a risk to taxpayers.

“I can’t see moving forward with the convention centre (when) there is no guarantee on the timing of when the commercial, hotel and the other aspects (will be) moving forward on this project,” she said.

“There is no guarantee in here.”

Mayor Peter Kelly cut debate short several times when councillors began speaking out about the merits and pitfalls of the project rather than the agreement at hand.

“We are not redebating going ahead or not,” he said. “That decision has been made by council and the province.”

Council also voted on and approved two other staff recommendations related to the convention centre:

1. It approved putting $40,000 of city funds toward a marketing campaign for the centre. The province is picking up the bulk of the cost of the campaign.
2. Council also voted to ask staff to analyze and report back on municipal uses for the existing World Trade and Convention Centre on Argyle Street. The municipality has an option to buy that building at book value if the province is unable to sell it before the new convention centre opens.

“That has been further refined.  ... There are two other options to purchase the old space,” said Mike Labrecque, deputy chief administrative officer of Halifax Regional Municipality.

The new 115,000-square-foot convention centre is just one portion of the proposed $500-million, 1.2 million-square-foot Nova Centre development.

Rank Inc. will own and operate the rest of the project, including an 18-storey hotel and a 14-storey office building.

The convention centre portion is estimated to cost $159 million, split not quite evenly among the federal, provincial and municipal governments.

“Finance has looked extensively at the financial risk,” Labrecque said. “The broad theme of this is that we wanted to be able to pay for our share of the costs through the tax revenues so that we wouldn’t have to impact other municipal programs and services.”

The province and the city are contributing $56 million each to be paid in the form of a capital lease over 25 years. In the 30th year, they have the option to buy the convention centre for $1.

The memorandum of agreement approved Tuesday allows the municipality to defer 25 per cent of its annual payments for the new convention centre for up to 10 years if the rest of the project isn’t done when the convention centre opens.

“In the event that the revenues don’t match the expenditures, we just want the option to be able to defer a series of payments — not be forgiven payments, but defer them until such time that the revenues catch up and we can pay them back,” Labrecque said.

Under the agreement, the developer has also provided two letters of credit for $2.5 million each that can be used if the construction of the hotel and commercial space do not coincide with the convention centre construction.

Under the agreement, continuing operating costs not covered by convention centre revenue will be shared equally between the municipality and the province.

But the municipality will keep the property tax income it collects from the commercial centre.

“The real property taxes accrued from the whole of the site that go into the reserve aren’t shareable,” Labrecque said.

The province confirmed Tuesday it will meet soon with Rank to finalize project details.

The Coalition to Save the View said council should not have allowed itself to be rushed into considering the memorandum of agreement Tuesday.

“Much has changed in the past 19 months,” Judy Haiven of the coalition said in a news release.

“Victoria, B.C., like Halifax, is a key tourist destination, with a similar population. The Victoria Conference Centre expanded in 2008, but the number of non-resident delegate days at the centre is 16 per cent less than it was before the expansion. This year, Victoria’s taxpayers will have to pay 16 per cent of the conference centre’s operating budget.”

Halifax is likely to see similar losses, Haiven said.

Kevin Lacey, Atlantic Canadian director of the Canadian Taxpayers Federation, attended Tuesday’s council session. He expressed disappointment that voting went ahead on the agreement.

“This is a bad deal for taxpayers,” he said. “The (memorandum of agreement) does not change that. It will remain a bad deal for taxpayers and will likely result in taxpayers paying more taxes than they did before this convention centre began.”

(cmellor@herald.ca)