Special Report: Casino

Farr: Global Spectrum, Live Nation will Object to Downtown Casino Development

If Council approves a downtown casino/entertainment complex, the companies the City just contracted to run Copps Coliseum and Hamilton Place will seek a change to their contract.

By Ryan McGreal
Published February 14, 2013

this article has been updated

According to Ward 2 Councillor Jason Farr, Global Spectrum and Live Nation will object strongly to the idea of a downtown casino entertainment complex that includes a performance venue.

The City just signed agreements with the two companies to run Copps Coliseum and Hamilton Place. The City has a separate contract with Carmen's Group to run the Hamilton Convention Centre.

The contact includes a guaranteed reduction in the annual subsidy the City pays to maintain the facilities, but a new downtown casino entertainment complex - like the RockHammer development proposed by a partnership between Carmen's Group, Nick Bontis and LIUNA - would move Global Spectrum/Live Nation to "seek contractual relief" from the guarantee.

In a 12:45 PM news conference at City Hall, Farr quoted an email reply from Frank Russo, vice president of business development and client relations at Global Spectrum. "At no time during the competitive bidding process were we made aware of the possibility of a competitive casino entertainment facility being developed in Downtown Hamilton!"

Farr stated that Brock Jones, vice president of event bookings for Global Spectrum, "believes a casino venue will fundamentally kill the market for entertainment events at Copps and Hamilton Place."

Farr also quoted an email from Riley O'Connor of Live Nation: "Live Nation has not been in any discussions with any potential operators or developers of a casino in the City of Hamilton."

Farr's statement concluded: "This information reinforces the significance of our pending motion (today) as it relates to Flamborough as our optimum casino site."

Councillors are expected to vote today on a compromise motion by Councillor Sam Merulla that identifies Flamborough as the city's chosen casino site, but opens the door to a downtown location if no bids are received to operate a casino there.

Here is the full text of Councillor Farr's statement:

February 14/2013

Press Statement re. CASINO issue

Over the past few days, I have been receiving emails of concern with respect to maintaining Flamborough as Councils priority as a location for an expanded casino in our City. Some of these emails have emanated from the Ward 2 business community whose opinions are of obvious great value to our office.

As you know, last night, the City of Hamilton Council and the Mayor unanimously ratified an operational agreement between Global Spectrum and Live Nation for Copps Coliseum and Hamilton Place. This agreement seeks to ensure a better quality and more frequent quality entertainment downtown and a greatly reduced tax-payer subsidy.

With this agreement, Global Spectrum/Live Nation enters into a 5 year and 10 month agreement with the City of Hamilton guaranteeing that we would reduce the combined annual operating losses of Copps Coliseum and Hamilton Place by a minimum of $500,000 per (full) year.

The concerns expressed by some in our business community, and others, resulted in our Ward 2 office asking the question, how would a casino located downtown impact the future operations of our existing entertainment facilities here?

I reached out to the Vice President of Business Development and Client Relations at Global Spectrum, Frank Russo. This morning, via email, I received a communication that includes these comments from Mr. Russo...

At no time during the competitive process were we made aware of the possibility of a competitive casino entertainment facility being developed in Downtown Hamilton!

You asked me in an email . . . ."if Global Spectrum would welcome such a venue?"   The simple answer is "No!"

Riley O'Connor of Live Nation believes any such new venue "will directly compete with Copps Coliseum and Hamilton Place." 

Global Spectrum's Vice President of Event Bookings, Brock Jones, believes a casino venue will fundamentally kill the market for entertainment events at Copps and Hamilton Place.

If the City approves a casino entertainment venue, Global Spectrum and Live Nation would seek contractual relief for the subsidy reduction we guaranteed.

I hope you can appreciate our position on this. 

Frank Russo, Sr. Vice President
Business Development and Client Relations

In addition to these comments from Mr. Russo. Further, I received this brief communication from Riley O'Connor of Live Nation...

"Additionally Live Nation has not been in any discussions with any potential operators or developers of a casino in the City Of Hamilton."

I feel it gravely important that the public, particularly those who, in the last few days have expressed their support of a Downtown Hamilton Casino / Entertainment complex, understand this position from the City of Hamilton's newly Council appointed operators of our existing Copps Colisium and Hamilton Place entertainment facilities.

This information reinforces the significance of our pending motion (today) as it relates to Flamborough as our optimum casino site.

Thank you.

Councillor Jason Farr

Update: Updated to include the full text of Councillor Farr's statement.

Update 2: Updated to add a video recording of Councillor Farr's statement, courtesy of livestreaming guru Joey Coleman.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

46 Comments

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By jason (registered) | Posted February 14, 2013 at 13:30:58

I'm waiting with baited breath to see if all the same people who criticized the TiCats for a "private enterprise holding a city hostage" will take the same approach here.

Will GS/Live Nation pull this stunt if someone proposes a new mega-convention centre downtown? Or what about a possible rebirth of the Tivoli with condos/retail etc....?

Even as someone who has never set foot in a casino, I would send GS/Live Nation out the door if they think they can become the latest in a long list of private enterprises in Hamilton who hold us hostage to get their way.

Although these days Hamilton is becoming the Bizarro World. Smart, educated, well-respected community leaders are actually advocating for encroaching on the Greenbelt for a casino. Really? A casino? We're going to set that precedent for Smart Centres and the homebuilders to take to the OMB? A disaster in the making if the province goes along with it.

Comment edited by jason on 2013-02-14 13:31:44

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By alhambra (anonymous) | Posted February 14, 2013 at 15:07:07 in reply to Comment 86300

I think you're missing the point. They signed a contract to run venues. They are suggesting the contract was incumbent on no casino. That might or might not be a good argument but they're not holding the city hostage to any degree. It's no different than any business would do if they buy an operation in expectation of certain conditions being in place.

There is no comparison to the Ticats because that was funded largely by public moneys.

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By ScreamingViking (registered) | Posted February 14, 2013 at 21:52:57 in reply to Comment 86318

There is no comparison to the Ticats because that was funded largely by public moneys.

So were the venues that Global Spectrum/Live Nation will be operating.

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By movedtohamilton (registered) | Posted February 14, 2013 at 15:25:01 in reply to Comment 86318

Here's the "hold-hostage clause":

"f the City approves a casino entertainment venue, Global Spectrum and Live Nation would seek contractual relief for the subsidy reduction we guaranteed."

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By jason (registered) | Posted February 14, 2013 at 16:44:08 in reply to Comment 86321

Wow...that was in the original HECFI agreement?? If so, who the heck at city hall authorized it?
That changes everything in my mind - now puts the onus squarely on council, despite my earlier ramblings about a business holding us hostage.
Still makes no sense to me though...Philly and LA both have multiple casinos, in some cases just a few minutes from arenas and entertainment venues owned by GS/Live Nation.

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By adrian (registered) | Posted February 15, 2013 at 08:40:48 in reply to Comment 86327

I'm guessing this is sarcasm, since this is obviously not in the original HECFI agreement. It's the text of the email to Jason Farr from Frank Russo.

This discussion is a little off-base, in my opinion:

I'm waiting with baited breath to see if all the same people who criticized the TiCats for a "private enterprise holding a city hostage" will take the same approach here.

Threatening to leave town altogether, like the Ticats did, is not the same thing as indicating you will seek to renegotiate a portion of a contract.

They signed a contract to run venues. They are suggesting the contract was incumbent on no casino.

Nowhere in the article does it say this. Global Spectrum says they "would seek contractual relief for the subsidy reduction" if a downtown casino goes forward. They understand they are bound by a contract to reduce subsidies, but are saying that they would seek to renegotiate that part of the contract.

Typically, any contract can be renegotiated by the parties in the contract for any reason at any time. The question is whether or not the renegotiation would be successful. In this case, one possible argument would be that they were not given all of the relevant information they needed to make an informed business decision. This understanding may also be reflected in the original contract.

Here's the "hold-hostage clause"

It's not a "clause", it's a message that warns of a possible attempt to renegotiate a portion of the contract.

a threat of legal action is not holding someone hostage

It's also not really a "threat of legal action". Typically I would consider "legal action" in this context to be a lawsuit. No one is saying (at least in the article above) that they will launch a lawsuit.

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By alhambra (anonymous) | Posted February 15, 2013 at 12:27:00 in reply to Comment 86344

Sure contracts can be renegotiated but it requires both parties to receive a benefit - what's the city's? You certainly can't unilaterally renegotiate a contract.

The legal action is implicit because it's the only possible recourse GS/LN has. The only basis for that legal action would be some clause that the contract was incumbent on no competing venues being approved.

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By jason (registered) | Posted February 15, 2013 at 09:40:32 in reply to Comment 86344

So, Farr is just making things up? I heard a quote from the guy that Farr quoted as saying "I had no clue about his presser and am not sure what quote of mine he used".

My comparison to the Ticats is absolutely valid. They threatened to leave town if they didn't get the stadium where they wanted. These guys are threatening to renege on a contract unless we promise to not allow someone else to develop a privately funded entertainment enterprise in our downtown.
In both cases, it's a private operator trying to hand-cuff our attempts at city-building for their own gain. Don't let your opposition to a casino and support of a WH stadium cloud the underlying principles that are being misused for personal gain in both cases.

I elect councillors and a mayor to make city-building decisions for my city. Whether they get them right or wrong, isn't the point. It's their job to make them. It's not the job of a private enterprise to try to hijack the process to benefit their own back pocket.

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By alhambra (anonymous) | Posted February 14, 2013 at 15:32:31 in reply to Comment 86321

a threat of legal action is not holding someone hostage. Most likely it's just a political exercise to influence council's opinion, but I don't see anything wrong with it. They want to do the best for their business.

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By movedtohamilton (registered) | Posted February 14, 2013 at 15:43:54 in reply to Comment 86322

I understand your viewpoint, but can't agree with it. There seems to a be a long history in Hamilton wherein companies either have a very cozy relationship with politicians, or they are adept at "out-smarting/end-running them". Decision-making here has layer upon layer of irrationality and influence-peddling.

Funny how private enterprise wants government to keep out, but only when it suits their interests.

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By alhambra (anonymous) | Posted February 14, 2013 at 15:59:20 in reply to Comment 86323

put it this way - if your neighbour wants you to cut your tall weeds they may tell you they want to file a by-law complaint. That's perfectly within their rights. They may not have a case and then they will lose but they never held you hostage.

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By jason (registered) | Posted February 14, 2013 at 15:14:33 in reply to Comment 86318

I personally don't buy it. Unless they specifically brought up the issue of a casino way back during negotiations, it's a moot point, just like the Tiv or House of Blues is a moot point. If council was dumb enough to sign a contract that was clearly incumbent on no casino, then you're right - they own this mess.

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By Ryan (registered) - website | Posted February 14, 2013 at 16:11:49 in reply to Comment 86319

It seems clear to me that their issue is with a high profile downtown venue attached to a casino-based entertainment complex in which the city has a direct financial interest. IANAL but that makes perfect sense to me.

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By Conrad664 (registered) | Posted February 14, 2013 at 13:33:12

Quote the e-mails and read it carefuly they had no idea of a casino complex but did they stayted that they were againts it

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By jason (registered) | Posted February 14, 2013 at 13:35:21 in reply to Comment 86302

That's not the point. If their business plan is so weak that a casino can ruin it, they have bigger problems. They can say the same thing if we ever decide to modernize and drastically expand our convention centre.
I'm tired of organizations like the Ti-cats et al thinking they can play games with us to get their way. And frankly, Hamilton might make all sorts of decisions that they "are against". Nowhere in their agreement was veto power over city hall.

Comment edited by jason on 2013-02-14 13:36:14

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By Conrad664 (registered) | Posted February 14, 2013 at 13:37:06

If its going to be at Flamborough built it elswere go make it bigger in Brantford

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By jason (registered) | Posted February 14, 2013 at 13:42:25 in reply to Comment 86304

I agree, although then we lose the $4.5 million per year.... maybe it's time to cut our losses. Although from what I can tell, there isn't a single person in Hamilton opposed to a casino. Even the group with those 'NO' flags on their cars have all stated they support a Hamilton casino.

So, I'm guessing you and I would be in the minority in suggesting it go to another city.

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By AnjoMan (registered) | Posted February 14, 2013 at 17:24:46 in reply to Comment 86306

I would prefer ultimately that there be no Casino. The concept of governments benefiting from addicted gamblers (to the tune of 36% of total Casino revenue) is abhorrent to me.

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By twenty bucks (anonymous) | Posted February 14, 2013 at 14:09:55 in reply to Comment 86306

4.5 million a year is like twenty bucks a year on your tax bill. I'd gladly pay $20 to say no to a casino.

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By Conrad664 (registered) | Posted February 14, 2013 at 14:09:33 in reply to Comment 86306

Well do you know anyone that whould spend millions in a farmland biuld it were the pan am stadium was sup to go

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By Conrad664 (registered) | Posted February 14, 2013 at 13:42:08

Global bring in an NHL team and you won`t have a problem

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By Conrad664 (registered) | Posted February 14, 2013 at 13:52:10

Oh and one more thing ... how long has this been going on for ... the city staff should of told global and livenation this way befor they took over and they couyld of back out or shut there mouths

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By jason (registered) | Posted February 14, 2013 at 13:56:44

Is there anything else we should mention to GS/Live Nation before they take over our facilities?? Are they aware that the Vranich's had floated an idea for a House of Blues concert hall in Hess Village? Is that allowed? What about a massive new entertainment complex proposal that someone might bring forward as downtown continues to grow. Should we tell them "thanks but no thanks, GS/Live Nation won't allow this"?

I tire of private enterprise thinking they can run our city. It's City Hall's job to run the city. Some decisions will be ones they like, other ones they won't. Deal with it.

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By movedtohamilton (registered) | Posted February 14, 2013 at 13:57:53

Did Global Spectrum/Live Nation sleep in late on the morning of the Rockhammer press conference? But they did get to their blackmail class later that day.

Comment edited by movedtohamilton on 2013-02-14 13:58:18

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By conrad664 (registered) | Posted February 14, 2013 at 13:58:09

Oh and i find thoses statments BS if Global and live Nation had a problem they whould come and make a live statment on t.v somewere

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By Partnered (anonymous) | Posted February 14, 2013 at 13:58:38

Didn't the RockHammer folks talk about partnering with GS/LN on bringing acts to their venue? Maybe they should have asked them about it first. Right after asking Mission Services if they wanted to partner on bringing relief to the new gambling addicts from a downtown casino.

Someone please stick a fork in this pudding of fail.

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By conrad664 (registered) | Posted February 14, 2013 at 14:00:46

Oh man it too frigging bad im working ... cuz il be down there face to face with these so called councils

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By woodhead (anonymous) | Posted February 14, 2013 at 14:11:14 in reply to Comment 86312

Maybe it's time you got face-to-face with a grade six English teacher

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By Conrad664 (registered) | Posted February 14, 2013 at 14:46:47 in reply to Comment 86315

Like i said befor woodhead says it all

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By 666 (anonymous) | Posted February 15, 2013 at 07:21:56

Copps has lost millions over the years and should be torn down to make room for the new casino!

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By Conrad664 (registered) | Posted February 15, 2013 at 08:47:35 in reply to Comment 86341

Global and Carmens should get togegher there is a guy in Edmonton who owns the OILERS thats looking someone to biuld a new arena complex with a Casino in DOWNTOWN eDMONTON

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By Cops (anonymous) | Posted February 15, 2013 at 08:32:35 in reply to Comment 86341

Ugh, don't give them any ideas!

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By Conrad664 (registered) | Posted February 15, 2013 at 07:47:28

Lol i knew something like this was going to happend , Sam and Jason both put there foot in there mauth`s

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By George (registered) | Posted February 15, 2013 at 09:02:16

Isn't this just more private business saying that a casino will be a black hole and suck money out of the city, hurting local enterprise, and in this case, city owned facilities?

casiNO!

Comment edited by George on 2013-02-15 09:53:49

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By highwater (registered) | Posted February 15, 2013 at 09:22:17 in reply to Comment 86347

Yup. Somehow it's ok for private enterprises who believe they will profit from a casino to lobby for it, but it's not ok for a private enterprise that the casino will harm to take actions to protect itself.

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By jason (registered) | Posted February 15, 2013 at 09:44:35 in reply to Comment 86349

personally I'm not a fan of this line of thinking. It's the same one the mayor pulled out when he flipped back to NOT supporting a WH stadium - he said that the surrounding retail/dining/entertainment development at a new stadium would poach from downtown businesses. No, it will add to the downtown and enhance the downtown business community. There's a reason Locke St is booming even with gobs of food stores and competing coffee shops. Density, variety and more business is always better for a street, neighbourhood, downtown, than less. The weak ones are weeded out, the ones offering good product not only survive, but thrive.

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By highwater (registered) | Posted February 15, 2013 at 10:37:12 in reply to Comment 86351

You do realize there is a fundamental difference between the way casinos operate vs. other forms of retail/restaurant/entertainment establishments, don't you?

Comment edited by highwater on 2013-02-15 10:45:34

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By jason (registered) | Posted February 15, 2013 at 11:26:26 in reply to Comment 86353

absolutely. However, I still believe in the principle of our city leaders making the decisions, good or bad. I'm not a fan of private interests trying to twist our arms to get their way. Nor am I a fan of city hall being timid and not making the choices we elect them and pay them to make. Some decisions I won't agree with, others I will...but I believe in the proper process both ways.

Comment edited by jason on 2013-02-15 11:26:39

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By Noted (anonymous) | Posted February 15, 2013 at 21:29:16

In the wake of Farr’s announcement, differing takes on his comments began to surface, first from Mayor Bob Bratina. At the end of Thursday’s meeting, Bratina stated that Farr’s comments “may have put the whole process at risk” and were based on “misunderstanding.”....

Global Spectrum vice-president Frank Russo refused to speak to The Spectator Friday. Instead, his office said all inquiries should be directed to Bratina’s chief of staff, Peggy Chapman.

In an email distributed to councillors Friday afternoon — again from Bratina’s office — Russo said any venue larger than 1,200 seats would hurt its business. The management agreement between the city and Global Spectrum/Live Nation states the city cannot support any entertainment venue larger than 3,000 seats.

“Neither Global Spectrum nor Live Nation have any opinion with respect to a Casino per se,” reads the letter. “Our remarks were only in the context of opposing a competitive entertainment venue that we understood may be a component of an overall casino development.”

http://www.thespec.com/news/local/article/888227--who-said-casino-hurts-entertainment-industry

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By movedtohamilton (registered) | Posted February 15, 2013 at 22:08:48 in reply to Comment 86387

I had a plan to build a 1201 seat music venue. There goes that idea, down the drain.

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By Mogadon Megalodon (anonymous) | Posted February 16, 2013 at 11:03:17

"The management agreement between the city and Global Spectrum/Live Nation states the city cannot support any entertainment venue larger than 3,000 seats."

Presumably other than the 19,000-seat venue covered by the management agreement. Another argument against the idea of the Pan Am Stadium's viability as a concert venue. As GS/LN suggests, there just isn't that much disposable income in this market. (One of the inherent trade-offs of life in a "small town big city," perhaps.)


…when the numbers for Metro Vancouver's overall economic performance for the lost half of the Vancouver Canucks hockey season are eventually tallied, an honest analysis is likely to conclude the lockout's impact was either negligible, non-existent or - most likely of all - slightly positive.

Because that's what thorough analyses have shown to be the case time after time - professional sports franchises tend not to boost a local or regional economy, but rather to drag it down a bit.

Brad Humphreys of the University of Alberta in Edmonton was a pioneer in this kind of research, as co-author of a widely cited study in 2000 that looked at U.S. cities hit by work stoppages in pro sports. The findings, he tells me, hold true on both sides of the border.

Even though the study is a few years old, "I don't think we'd find anything different now," he said. "I don't see anything in today's economy that would change it."

The study looked at employment earnings for employees in four different types of occupations, and found their collective earnings rose slightly when their cities' professional sports teams were idle. Other researchers have since looked at other indicators - for example, changes in the sale of taxable goods or the occupancy rate in hotels during work stoppages - and they've reached similar conclusions.

The reason is, when you think about it, pretty obvious. When people can't spend their money on pricey sports tickets, they spend it on other stuff instead.

http://www.vancouversun.com/business/lockout+good+Vancouver+economy/7794246/story.html

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By Voice Of Fire (anonymous) | Posted February 18, 2013 at 08:31:36

Why do those many "artists" that can't actually sell their stuff have so much to say?If we stop all or at least most of the arts grants, dole outs, prizes,subsidised housing and other hidden handouts, maybe some of these troughers will get an actual job.Rumor has it that the threat of an actual paying job downtown scares the hell out of them.Two hundred million private investment in our city cannot be stoped by a loud group of welfare recipients.Live your dreams, but not on my dime, get up and hustle when the alarm goes off.

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By RenaissanceWatcher (registered) | Posted February 19, 2013 at 22:45:51

On "The O Show" on Cable 14 television tonight, Loren Lieberman broke an "exclusive" story that a complaint was filed with the Integrity Commissioner today against Councillor Jason Farr. Mr. Lieberman did not say who filed the complaint. He did say that it relates to the contact Councillor Farr had with Global Spectrum representatives and what Mr. Lieberman called a "misrepresentation" of Global Spectrum's reply during Councillor Farr's news conference just before the Special GIC meeting on the casino issue on February 14, 2013.

Comment edited by RenaissanceWatcher on 2013-02-19 22:46:39

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By Ryan (registered) - website | Posted February 20, 2013 at 13:57:56

The Hamiltonian has published the text of the letter Global Spectrum sent to Council last week to clarify their position on a downtown casino/entertainment complex. Highlight:

such a venue would clearly compete with Copps Coliseum and Hamilton Place and would clearly threaten our ability to achieve the subsidy reduction we guaranteed the City. It will also threaten chances of the City receiving any further savings as part of its seventy percent (70%) share of additional subsidy reductions.

This is exactly consistent with what Councillor Farr communicated in his press conference.

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By Conrad664 (registered) | Posted February 21, 2013 at 10:01:58 in reply to Comment 86536

Ryan why is it at the end of council meeting on the 14 of feb the Mayor pointed out that Carmens and Globle both confrem there was nothing wrong

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By highwater (registered) | Posted February 21, 2013 at 10:28:57 in reply to Comment 86579

Why does the Mayor point out a lot of things at council meetings?

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