One of the biggest secrets around Vancouver city hall is what HootSuite Media Inc. is or isn’t paying to use a 33,000-square foot civic building at 5 East 8th Ave.
The tech star, which provides free and paid systems to manage Twitter and Facebook accounts, moved from the Downtown Eastside to Fairview in fall 2012 after inking a lease deal with the Vision Vancouver majority city council. Mayor Gregor Robertson has been crowing (and Tweeting) often about the owl-mascoted company (which was all the rage down in Austin, Texas at the SXSW festival earlier this year). Robertson would rather be at a Tweetup than a media scrum or (heaven forbid) subjected to a one-on-one interview with certain rabble-rousers.
When it comes to the financial terms, Robertson and company’s beaks are glued shut. Yes, this is the same Mayor who promised transparency and accountability.
City hall does not want to show the financial terms to Freedom of Information requesters. There is a chicken little, sky-is-falling paranoia in the Vision Vancouver nest, where it’s feared that publishing the dollar figures would lead to ruination of HootSuite and city hall. The Office of the Information and Privacy Commissioner is investigating.
B.C. Pavilion Corporation tried a similar tactic to hide transactions with its B.C. Place Stadium tenants, Vancouver Whitecaps and B.C. Lions, but it eventually relented. It is foolish for city hall to play the same game.
City hall bought the building in March 2000 for the Vancouver Police, which moved out July 2011 to the Cordova Annex and the former VANOC building at 3585 Graveley. Council approved renovations to the Annex for $4.55 million, which were supposed to be financed from the proceeds of the sale of 5 East 8th.
The building went on the block, but all offers were declined because not one was considered market value. The civic real estate office didn’t give up. HootSuite’s agent CBRE made a May 15, 2012 offer with a late-July expiry. City council met behind closed doors on June 27, 2012 and gave thumbs up to HootSuite. The report (but not the minutes from that meeting) was finally and quietly slipped onto the city hall website on Nov. 15 when Vision Vancouver thought nobody was looking.
“Although this is not an immediate sale, this proposal does provide an income stream to the city, plus a potential sale in the next three years at a sale price that reflects fair market value of $9.3 million, plus repayment of unamortized Tenant Improvement costs within 20 days of the date that the Option to Purchase is exercised.”
Is the city counting its chickens before they’ve hatched? Remember when city hall claimed it would reap $170 million from the sale of Southeast False Creek land to Olympic Village developer Millennium? The Olympic Village went into receivership on Nov. 17, 2010 and city hall later claimed it would lose $48 million.
HootSuite’s initial five-year lease began Dec. 1, 2012 with options for two additional five-year terms. The report said HootSuite was given a three-month rent holiday through Feb. 28, 2013. The dollar values of the rent, taxes, costs, security deposit and fees for 71 secured, underground parking spaces are all secret. HootSuite was even allowed to sublicence “any or all of the parking stalls without the consent of the landlord.”
HootSuite CEO Ryan Holmes and his company “shall have an option to purchase” the building by Nov. 30, 2015. HootSuite apparently has the resources to buy it outright — the private company announced $165 million in funding in August, via Insight Venture Partners, Accel Partners and OMERS Ventures.
I checked with city hall’s communications department on Nov. 15 and confirmed that no such sale has occurred; the HootSuite nest is still owned by the people of Vancouver.
One more thing. Vision Vancouver-censored Freedom of Information documents below not only conceal the monthly payments by HootSuite to city hall, but the documents also keep secret the monthly payments from city hall to HootSuite (in U.S. dollars, no less!).
City hall is a HootSuite customer. It uses the company’s Enterprise Package that some sources say retails for $1,499 per month or $17,988 a year.
But the Vision Vancouver-controlled city hall doesn’t want you to know how much or how little it is paying HootSuite with public funds.
UPDATE (Jan. 21, 2014): The mystery was finally solved on Jan. 21, 2014, when City of Vancouver released the contract, showing a monthly rental rate of $47,149.50 (or $17 per square foot) in year one rising to $61,017 per month ($22 per square foot) by year five.
The contract is below.
It was released hours after Glen Chernen, leader of the upstart Cedar Party, held a news conference at the party’s Dunbar storefront headquarters about his battle to obtain the contract and how the Office of the Information and Privacy Commissioner intervened. Meanwhile, I am battling for city hall to disclose the lists of monthly payments by HootSuite to city hall and vice versa, to find out how much is really changing hands and whether citizens’ interests are being respected.