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HomeBusinessCity hall council opts to return $500,000 deposit to Formula E promoter, if used for refunds

City hall council opts to return $500,000 deposit to Formula E promoter, if used for refunds

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Bob Mackin

In one of its final moves before the civic election campaign’s official kickoff, Vancouver city council decided to give up the $500,000 deposit paid by the Montreal-based promoter of the cancelled electric car race and festival, on the condition that it use the money to refund ticket buyers, suppliers and/or sponsors.

The 2018-2022 Vancouver City Council (City of Vancouver)

Officially known as Canadian E-Fest, the event was scheduled for June 30-July 2 and it was to include a Nickelback concert, an environmental conference and the ABB Formula E World Championship race.

Promoter One-Stop Strategy Group (OSS) failed to secure all necessary permits to use land around East False Creek, so the event was cancelled in late April. OSS lost its contract in June with U.K.-based Formula E, which did not include Vancouver in the 2023 race calendar.

“Questions about funds being paid or refunded by OSS to ticket-holders, suppliers, sponsors, and/or other potential creditors should be directed to OSS,” said city hall’s July 29 announcement. 

OSS CEO Matthew Carter declined comment when reached by a reporter. He recently said ticket holders would receive refunds, but refused to say when, citing unspecified legal restrictions.

Clauses in the Jan. 26 contract between city hall and OSS, obtained under freedom of information, allowed city hall to keep the full sum.

“It is correct that, according to the Host City Agreement, OSS’s performance security payments were not refundable to OSS, whether the July 2022 event took place or not,” confirmed city hall senior communications specialist Kai-lani Rutland. “However, because the event did not ultimately take place, it was city council’s view that it would be appropriate to return these funds so that they could be applied to refunding and/or paying ticket-holders, suppliers, sponsors and other creditors involved with the cancelled event.

OSS Group’s Matthew Carter (LinkedIn)

The agreement said the city was entitled to draw down on the deposit “at any time and from time to time” to reimburse taxpayers for any and all costs under the agreement. In the event of termination of the agreement due to the promoter’s default, the portion of the deposit intended to subsidize local musicians and as many as 20 car charging stations for community centres was non-refundable.

Had the event happened, the city would have been obliged to return any remaining balance within 180 days after the event. 

OSS was responsible for all costs of producing the event, including city engineering and policing. The choice of summer’s first long weekend meant OSS was also on the hook for city staff overtime costs.

“[OSS] recognizes it is a ‘late-comer’ event that has selected a location and date typically blacked out for new major events; specifically, the downtown core on Canada Day long weekend and has declined recommendations by the city to select a date that is not ‘blacked out’,” said the contract.

Map of the proposed route for the Vancouver Formula E race.

“Furthermore, the organizer recognizes that it was informed that the selection of the Canada Day long weekend could increase costs due to resource constraints and has selected the event dates knowing that risk.”

The parties agreed to “maintain an open book policy towards each other” and provide each other full inspection rights to all records relating to the event. But the financial terms and timelines in the contract were redacted from the copy released by the city hall FOI office, under a section of the law dealing with fear of harm to a third-party’s business interests. The Office of the Information and Privacy Commissioner has consistently upheld the public’s right to see entire government contracts with private companies. 

OSS was also required to create a community benefits agreement. The city suggested that include affirmative action hiring of women in trades and Indigenous people and procuring of goods and services from “social impact and/or equity-seeking businesses.” To measure the community benefits agreement and the tourism and economic impact of the event, the city also required hiring independent third-party monitors to conduct separate reviews. Had Canadian E-Fest gone ahead, city hall ultimately wanted to know whether it aligned and supported council priorities about affordability, diversity, equity, reconciliation and climate change. 

Coun. Michael Wiebe (left) and Coun. Sarah Kirby-Yung in 2018 (Mackin)

In return for all that, OSS agreed to give city hall space for community engagement and fundraising activities with a footprint of no less than 20 feet by 20 feet, “in a location having comparable frontage, visibility and accessibility as that of the organizer’s sponsors.”

Green Party Coun. Mike Wiebe and ABC Vancouver Coun. Sarah Kirby-Yung co-sponsored the April 2021 city council motion to bring Formula E to Vancouver. They did not immediately respond for comment.

The deposit refund announcement came the day after the 2018-elected city council held its last scheduled meeting before the Oct. 15 civic election. 

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