Reducing IceCaps Mile One rent by $1M good decision, says St. John's mayor

The St. John's mayor is defending the deal the city cut with the IceCaps hockey team.

St. John's Sports and Entertainment confirms travel subsidy was extended for 3rd year

Mark Quinn · CBC News · Posted: Nov 08, 2017 5:30 AM EST | Last Updated: November 8, 2017

The Mile One Centre receives an annual operating budget from the city of St. John's. (Geoff Bartlett/CBC)

The mayor of St. John's is defending a deal the city cut with the IceCaps after CBC confirmed the hockey team was given a three-year $1,050,000 rent reduction — $350,000 more than the two-year, $700,000 deal that initially sparked outrage in 2014.

The CEO of St, John's Sports and Entertainment sent CBC News an email outlining the arrangement that was made with Danny Williams's American Hockey League team for the last three years it played in the city.

SJSE CEO Sheena McCrate says the IceCaps team was given a travel subsidy for its last three years in St. John's. (Andrew Sampson/CBC)

St. John's owns the Mile One Centre the IceCaps rented for hometown games. The city grants the centre an annually operating subsidy.

Essentially, we reduced the IceCaps rent by $350,000 each year, which resulted in an increase to SJSE's operating subsidy.- Sheena McCrate

"The IceCaps received a travel subsidy in each of their final three seasons at Mile One Centre," wrote Sheena McCrate.

"To be clear, SJSE did not issue a cheque to the IceCaps annually. The travel subsidy was in the form of a rent reduction. Essentially, we reduced the IceCaps rent by $350,000 each year, which resulted in an increase to SJSE's operating subsidy in each of those three years. This brought the total IceCaps travel subsidy from 2014-17 to $1,050,000."

CBC investigated this issue after failed 2017 mayoral candidate and former St. John's mayor Andy Wells tweeted about it.

Try this on for size folks;I just found out that the hockey subsidy was not $700 thou but $1,050,000. <a href="https://twitter.com/hashtag/sjpoli?src=hash&ref_src=twsrc%5Etfw">#sjpoli</a> <a href="https://twitter.com/hashtag/nlpoli?src=hash&ref_src=twsrc%5Etfw">#nlpoli</a> <a href="https://twitter.com/hashtag/yyt?src=hash&ref_src=twsrc%5Etfw">#yyt</a>
—@AndywellsWells

Danny Breen, who was elected mayor in September, says it was not a subsidy and he believes the rent reduction was necessary.

What the rent reduction did is it invested in the economic development of the city and kept the team here for another three years.- Danny Breen

"There is no direct subsidy paid to the team.The whole purpose of reducing the rent was to keep the team here so it kept generating approximately the $3 million a year that it was generating for Mile One," he said.

"I think that if the deal hadn't been made it was pretty clear that the team wouldn't have made it past the next year and certainly the Montreal Canadiens wouldn't have moved their AHL farm team here and that would have driven the subsidy up in those two years," Breen said.

"So what the rent reduction did is it invested in the economic development of the city and kept the team here for another three years."

St. John's Mayor Danny Breen was a city councillor when the rent reduction was given to the IceCaps. (Mark Quinn/ CBC)

The public learned of the two-year, $700,000 rent reduction in 2014 after a city memo about the deal was leaked to CBC News. .

St. John's approves $700,000 subsidy to cut IceCaps costs

Critics said the city shouldn't have approved the lease arrangement at a private council meeting but Breen says that decision, and the subsequent decision to extend it for a third year, had to be done behind closed doors.

"They were legal agreements at the time and it was deemed by the clerk and the mayor at the time that negotiations of leases were legal in nature and decided in a private meeting and certainly announced later that we had extended that lease for the final season," said Breen.

The subsidy the city gave to SJSE for 2017 was just short of $1.1 million dollars.