Regina mayor explains committee vote in REAL/Brandt agreement

A day after Regina’s executive committee voted to move forward with Brandt’s proposal to buy a portion of the REAL District, Mayor Chad Bachynski is revealing more about what went on behind-the-scenes of Wednesday’s vote.

On Thursday, Bachynski joined the Evan Bray Show to walk through the decision and various factors Regina’s executive committee had to consider in its vote to move the decision forward.

Read more:

• Brandt’s REAL deal set to be scrutinized at Regina City Hall
• Renderings reveal vision for Regina’s Brandt Centre, other REAL facilities
• What’s in the Brandt-REAL deal? Breaking down the agreement

Listen to the full interview, or read the transcript below:

The following transcript has been edited for length and clarity.

EVAN BRAY: Can you help us understand the timeline of this, Mayor? When did this discussion first start taking place? When did you first hear about this?

MAYOR CHAD BACHYNSKI: I guess to start with, this has been in the works for close to six months, and there was an unsolicited proposal from Brandt who, essentially, was looking at it in the context of – and we heard it yesterday – the types of levers that Brandt has to pull being the main tenant with the Pats and the Brandt Centre, taking on the YQR Distillery. He’s looking at it from that kind of perspective. So, coming forward saying, “I want to look at this as maybe taking more on here, so I have more levers to pull.”

So, that was the starting point and that was about six months ago. Council directed administration when they heard that there was an unsolicited proposal, because we had to give direction to admin and these aren’t negotiated in public or anything. It’s a commercial deal. But we gave direction to admin to go away and say, “Okay, we’re giving you authority to go and negotiate this deal to see if there’s something there.” And I was very specific in my direction to say, “Don’t bring this back to council unless it’s a reasonable deal or a good deal for the city.”

Again, a deal is when both parties are successful in it, but make sure we’re going to be successful as a city. And so the timeline was about six months ago where our team went away – not only our team in terms of our our finance folks, our real estate folks and our legal folks – but they also engaged external third party legal expertise that are experts in mergers and acquisitions, and external third party expertise when it comes to property assessment and condition assessment of real estate. That’s where it started. And then we followed the regular process. We didn’t skip any processes in terms of council, because we said, “Yep, we’re gonna bring it, put it, publish on Friday, comes to exec committee for that initial discussion, and then next week, it’ll come to council, now that it’s been recommended by exec committee to come to council for approval.”

And so you knew about this six months ago? Did Council know about this six months ago?

BACHYNSKI: Yep, absolutely, yeah. All of council was briefed, and council decided to give administration the direction to go and negotiate to see if there was a deal to be had from the initial unsolicited proposal.

Because we heard from some, it was almost like an indication of, we just got this the other day. And so what you might have just received the other day is the package with all the details. I get that. You might not have known all the details, but it seems to me like this should not be a shock to anybody on council.

BACHYNSKI: No. And I think maybe some of the narrative was more about the public, more so, just found out about this. And so maybe some of the feedback that some of council were hearing would have been new, right? It’s a big decision that’s in front of us, published on Friday, and then debating on Wednesday. Some folks feel that that’s a shorter timeline. What I would say to the timeline is, I wouldn’t say that this took a long time or a short amount of time. I would say it took the amount of time required for both parties to agree to those terms.

So yesterday, there were a number of delegations that came to City Hall. Many of them spoke in favour, and some of them were what I will call “higher profile” names, but you heard from the board of directors for REAL. What was their take?

BACHYNSKI: I think it was a very pragmatic take. First off, I want to say another thank you to that board. I don’t think this deal would have even been on the table if it wasn’t for the work that that board did. That board, you know, in this last budget cycle, it was one of our only partners that came with a reduction in their operating ask, right? They reduced it by $400,000 over one year. And I know the hard decisions that they had to make over the course of the year to make that happen.

So setting that organization up in a way that they were continually working on, trying to improve, trying to find ways to improve. But there are decades of challenges that they were faced with, and this didn’t come up overnight, but there again, their sentiment was, and, you know, I think Jaime Boldt said it very well, their role as the board and being face to face, without the operational day to day, is to bring forward the risks and what they see as risks for both the facilities, the staff, and, you know, the biggest thing I heard there yesterday was, let’s get some assurance for the staff  if we’re going to make a decision. Let’s make a decision, because sitting in limbo, now that this is a public consideration, will cause more churn if we delay. And so, to make a decision, to give some assurances as to what the path is forward, and then we can start figuring out the details from there.

One of the other things that I know a number of people have asked – and I see a couple of texts on the text line saying – was there any thought in when Brandt came forward and said we would like to make this deal, was there any thought in throwing it out there to see if there’s anybody else, or is that bad business practice?

BACHYNSKI: One hundred percent, that was a conversation and consideration. And when council was faced with giving that direction to administration, to consider a one-off, unsolicited proposal that was part of the discussion. One, is there any other proponents, which, again, the only way to know absolutely 100 per cent for sure is to go out and do an RFP?

But the other consideration is, this is a unique proposal, and one of the challenges I kind of alluded to it before, with the current setup is that – and Shaun Semple talked about this yesterday – the levers that he has to pull, for example, in the Brandt Center, for the Pats, is only the tickets. He doesn’t have food and beverage, he doesn’t have sponsorship. There’s a lot of things that he doesn’t have control over.

And so, when you talk about the experience and the investment and the ticket prices and all these things, when you only have kind of one lever to pull, you don’t have a lot of wiggle room there, and how you manage that. So, there’s a unique nature to this, where any other third party proponent that comes in, it creates kind of the same dynamic that we have now with the city and REAL owning that portion of those arrangements.

And then when you talk about him taking on the YQR (Distillery) on top of that, you know, he’s already got a considerable vested interest, interest of the main tenant of the Brandt Centre. He’s looking at the YQR Distillery now and so it started to look like there’s likely not another proponent. And again, we’re weighing the risks and the pros and the cons, but there’s likely not another proponent that could come and do the same thing that that Brandt is proposing to do.

If someone was very, very interested, I would have expected, myself, to hear from somebody, and we haven’t. In fact, we had some folks come and speak that, I would say, have the capacity, the financial capacity yesterday that said they’re not interested.

The discussion, though, around another business, another person maybe being interested in doing this, you did get, unsolicited, a call from a local business family – the Hill family – saying we’re not interested. Is that right? Is that accurate?

BACHYNSKI: Yeah, that’s correct. Roseann Hill (Blaisdell) came and actually spoke as a delegate yesterday and and spoke in favor of this proposal and to affirm that they’re not interested.

I mean, the Hill family are a big part of the keeping the (Saskatchewan Roughriders) going. They have done a lot there. So, I mean, there’s some credibility to that. So in terms of process going forward, this now has been referred by a 7-4 vote yesterday to council next week. What actually happens at Council then?

BACHYNSKI: Essentially, it can be the same discussion, or, executive committee, when we refer something to council, essentially it would be put on the consent agenda. First, I highly doubt that that will stay there, because if there’s a delegate that registers, or if a council member has more questions or thoughts that they want to speak to, it, it’ll be pulled off. So what will likely happen is that we will have further discussion and questions around this proposal before ultimately taking a final vote to move forward with the agreement, and then it’ll be approved if that’s what happens.

Unions respond to REAL District purchase proposal

The Retail, Wholesale and Department Store Union (RWDSU), which represents about 700 REAL employees, put out a statement in response to the City of Regina’s executive committee decision on Wednesday.

“Employees of REAL are understandably nervous about what the changes may bring to the Campus,” union representative, Bernie Olynick, said in the release.

The release noted that the potential new employer through the deal “acknowledges successorship rights which means that all such employees will be transferred to Brandt and Brandt will assume the existing collective agreements as the successor employer.”

RWDSU noted that two collective bargaining agreements, one with REAL and one with Compass (Levy) Group Canada, currently cover workers in “virtually all aspects of the operations on the Campus,” according to the statement.

The union stated it has not been involved in any official discussions or meetings held between REAL, Brandt or the city.

“Regina Exhibition Park is a jewel and has served Regina and the Province well for decades,” the release stated, quoting Olynick.

“RWDSU has no other comments at this time, pending further details.”

–with files from 980 CJME’s Geoff Smith