Use hotel tax to fund Whiteout: Pagtakhan

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This article was published 06/06/2018 (2979 days ago), so information in it may no longer be current.

Winnipeg is going to have to decide how to fund any future NHL street parties, Coun. Mike Pagtakhan says, suggesting revenue from the city’s hotel tax might be a good option.

Pagtakhan, a member of Mayor Brian Bowman’s executive policy committee, told reporters Tuesday morning using the Destination Marketing Reserve account may be the way to go for future Whiteouts, as the reserve is funded through the tax charged on hotel rooms — and downtown hotels, bars and restaurants certainly benefited from the nine recent street parties that drew thousands of people a night.

“Off the top of my head, on first blush, it kind of makes sense,” Pagtakhan (Point Douglas) said. “It is within the hospitality industry; there are a lot of benefits to local hotels and businesses and restaurants, so maybe that’s the fund.”

Economic Development Winnipeg revealed Monday it cost $2.2 million to stage the Whiteout parties outside Bell MTS Place during the Winnipeg Jets’ extended post-season run.

City taxpayers and NHL team owner True North Sports & Entertainment Ltd. split the bill — about $1.1 million each — but the team kept all the revenue from beer and food sales (about $500,000) to offset its costs.

City officials said civic departments spent about $962,000 during the street parties and Bowman provided another $120,000 from his office expenses.

The Winnipeg Police Service said it paid out $788,000 in overtime wages. Officials said another $150,000 was incurred by Winnipeg Transit.

The extent of the costs sparked some debate over whether True North should have covered the entire bill.

Kevin Donnelly, True North senior vice-president of venues and entertainment, said Monday the team wouldn’t be involved in such events — and they likely won’t happen — if it was expected to cover all costs associated.

Maple Leaf Sports & Entertainment Ltd., which owns the NHL’s Toronto Maple Leafs and NBA’s Toronto Raptors, covers the entire cost of similar events staged at the Air Canada Centre fun zone, an outdoor square adjacent to the facility. MLSE uses revenue from food and beverage vendors and sponsorships to offset the total.

An outdoor gathering area is also part of the new True North Square development in Winnipeg.

Pagtakhan said the Whiteout parties were a positive event for Winnipeg, and he wants to see more of them in the future.

However, he said, while the provincial and federal government benefit through tax revenue on purchases and wages, city hall doesn’t receive any of that money.

“We definitely want to make sure we have a fund available for these types of things,” he said, adding before council considers dipping into the hotel tax, the hotel industry needs to be consulted.

Bowman told reporters Tuesday the street parties were an investment that provided “tremendous value” to the city, and thanked True North for agreeing to give $1 million to offset the cost.

“The value to putting Winnipeg on the map was significant,” Bowman said, adding the city has limited options to fund such events — and that is one of the arguments to support alternative funding models for city hall.

Bowman said discussions on how to fund future events will be held with Economic Development Winnipeg.

“I’m not going to close doors to what may be possible,” he said. “We learned from this.”

Finance chairman Coun. Scott Gillingham said all city departments are expected to balance their budgets by the end of the year, adding if WPS and Transit are unable to do so because of the unexpected costs from the Whiteout parties, council will have to consider providing them with additional funds, possibly taken from the savings generated by other departments.

— with files from Ben Waldman and Erik Pindera

aldo.santin@freepress.mb.ca