Mayor Nolan Crouse is taking exception to the city's first nomination for a dubious national award.
The city was nominated for a Teddy Award, given out annually for the last 14 years by the Canadian Taxpayers Federation (CTF). The awards are intended to highlight examples of government waste at the national, provincial and municipal levels.
It was the city's decision to purchase a Starbucks licence for a concession at Servus Credit Union Place that earned them the nomination, says Scott Hennig, CTF national communications manager and Alberta director. The city authorized $280,000 to pay for construction, equipment and fixtures for the concession. The cost also included the licence fee, the value of which is confidential. It made the move in the hopes of raising more revenue for the deficit-plagued recreation centre.
“The ridiculousness of a civic government buying a Starbucks was enough for us,” Hennig said. “Generally speaking the core services governments provide are police, fire protection and roadway clearing and garbage disposal. Not on that list is providing venti mocha lattes.”
Crouse accused the CTF of spreading misinformation in its news release, saying the city had purchased a licence to sell Starbucks products at a concession at Servus Place, not an actual franchise.
“I'm probably adding information to a story that is spreading missed facts,” Crouse said. “But council didn't authorize a franchise, just the licence. There's a pretty substantial difference.”
Crouse said the Starbucks is just another concession, similar to those it operates at Akinsdale Arena or Fountain Park Recreation Centre — it just has a licence to sell Starbucks coffee and products.
“Most are money losers,” Crouse said of concessions. “The ones at the park, at the pool, they generally will break even or lose money. This particular one is a profitable one so I don't view it as wasteful spending.”
The city projects the Starbucks will eventually rake in annual net revenues of $90,000 to offset Servus Place's annual deficit, which totalled approximately $600,000 in 2011.
Hennig brushed off the mayor's defence.
“I think he's splitting hairs there to a certain extent. I know they don't let you buy a franchise but they have essentially bought the rights to a Starbucks.”
The city posted a statement to its website Thursday in response to the nomination, quoting the mayor as calling the nomination “misinformed and irresponsible.” The statement reinforces the city purchased a licence, not a franchise, and says it is a good use of taxpayer money for reducing the Servus Place deficit. It also states it is not in direct competition with other businesses in Servus and that it consulted with other tenants.
Ray Davidson, owner of the Booster Juice at Servus Place, says he was never consulted.
“I was never told that the City of St. Albert was going to be in direct competition,” Davidson said.
Davidson said he was not upset about the effect on his business, but the way in which the city went about it.
“Again, I don’t think it’s the right thing for cities to be involved in business. They should help business, not be in competition with small business,” he said.
The Starbucks affected Booster Juice business as much as he estimated it would since the concession opened in November. Davidson forecasted a 15-per-cent drop in business and estimates there’s been a 10-to-15-per-cent drop to date.
“But I would rather evaluate it at the end of the year,” he said.
This is St. Albert's first nomination for a Teddy, named for a former federal employee — Ted Weatherill — fired in 1999 for outrageous expenses. The award itself is a golden pig, handed out at a mock ceremony in the presence of mascot Porky the Waste Hater.
The winner in the municipal category, however, was the City of Montreal and its fleet of sidewalk snowplows that were recorded scraping bare sidewalks last December.
“That's a tough one to compete against,” Hennig said.
