October 15, 1998

To:Emergency and Protective Services Committee

From:Commissioner of Corporate Services

City Clerk

Subject:Application for Relocation of the Delta Mayfair Bingo Hall from 525 Wilson Avenue (Ward 8) to 1860 Wilson Avenue (Ward 6), City of Toronto

Purpose:

The purpose of this report is to outline options available to Council with respect to an application by Delta Mayfair Bingo to relocate a bingo hall from 525 Wilson Avenue to 1860 Wilson Avenue.

Funding Sources, Financial Implications and Impact Statement:

If the bingo hall relocation proposal is not approved, and Delta Mayfair Bingo Hall closes outright, the City's lottery licensing revenues would be reduced by approximately $150,000.

Recommendations:

It is recommended that City Council, in accordance with Provincial criteria and procedures for the establishment of Bingo Halls approve the relocation proposal by Delta Mayfair Bingo.

Background:

The Approval Process

All applications to relocate existing bingo halls must be processed in accordance with the Province's "Criteria and Procedures for Bingo Halls", a copy of which is attached. Under these Criteria and Procedures, the municipal council's role is to review the application and forward its decision to the province. The final decision is made by the Director of the Provincial Alcohol and Gaming Commission.

The applicant must file a copy of the proposal with the municipal council and the Director of the Alcohol and Gaming Commission, place a public notice advertising the proposal in a daily newspaper for two consecutive Mondays, and in a local newspaper, and ensure that the proposal complies with all municipal zoning requirements and by-laws. Respondents are given thirty days in which to comment on, or object to the proposal.

After the 30 day public notice requirement has lapsed, a municipal council may:

(1) Hold a public meeting to obtain further information upon which to base its decision and to allow the applicant and respondents to outline their positions in a public forum;

(2) Require additional information from the applicant to substantiate the proposal or address any of Council's concerns;

(3) Require that the applicant fund an independent market study to be undertaken at the direction of and reporting to Council to determine the impact that a new commercial bingo hall would have on existing halls and charitable licenses. The costs of the study are to be borne by the applicant.

The role of the City Clerk is to ensure that the process followed by the applicant is in compliance with provincial terms and conditions and to assess the benefit of the relocation proposal to the local community.

The Application

On August 21, 1998, the City Clerk's Division of the City of Toronto received an application from Delta Mayfair Limited and an accompanying market study prepared by Kenneth Stroud & Company Ltd. for the relocation of an existing bingo hall from 525 Wilson Avenue to 1860 Wilson Avenue.

The Delta Mayfair Bingo Hall is currently located at the southeast corner of the intersection of Wilson Avenue and Tippet Road in Ward 9. The hall has been in operation since 1988 . The building was last renovated in 1993 and the applicants advise that the building is in need of significant updating, upgrading and repair in order to bring it up to the standard of a modern bingo parlour. The applicants have been unable to negotiate a long-term lease for the facility at what they consider reasonable market rents and feel that without a long-term lease, the costs of renovating the facility cannot be justified. The lease situation, the urgent need to renovate, and other building and parking deficiencies are cited as the reasons for the proposed relocation.

The proposed site at 1860 Wilson Avenue is located approximately 6.3 kilometres west of the present site of the Delta Mayfair Bingo Hall on the north side of Wilson Avenue, just west of Clayson Road in Ward 6. The building was originally built for industrial uses, but has most recently been used as a flea market. The flea market has ceased operation. The facility has a gross floor area of approximately 24,000 square feet with separate smoking and non-smoking areas, and parking for 400 vehicles. The applicants advise that some renovations will be required to upgrade the building's appearance and the parking area lighting. A letter is also on file from the City's zoning staff confirming that the site is zoned for bingo hall use.

The applicant has complied with all Provincial requirements to date, having submitted a complete proposal and published notice of the proposed application in accordance with the provincial Criteria and Procedures. The applicant has also submitted a market study, on file in the Clerk's office, in anticipation of Council's need to determine the impact that the relocated hall would have on existing bingo halls and charitable licenses. Objections have been filed by Keele Street Bingo Country Charities Association, Steeles West Bingo Country Sponsors Association and by two other individual charities, copies of which are attached. The City has also received two written submissions prepared on behalf of Bingo Country by Cadith Entertainments Limited and Price Waterhouse, objecting to the proposal, both of which are on file in the Clerk's office.

The Councillors for Wards 6 and 8 have been consulted on this relocation proposal.

Comments:

Delta Mayfair Market Impact Study

The market impact study prepared by Kenneth Stroud & Company Ltd. focused on the impact of the relocated Delta Mayfair Bingo Hall on the other bingo halls in the area - namely Steeles West Bingo Country, Finch Bingo Country and Keele Bingo Country. The study included a patron survey of four bingo halls (Delta Mayfair, Steeles West, Finch and Keele), analysis of demographic data for the study area, interviews with key participants in the bingo industry, and an analysis of data on bingo hall attendance and income. Although the study was not done at the direction of Council, it does address the critical components that would normally be addressed be contained in an independent market study.

The major finding of the study was that the proposed relocation would not negatively impact Steeles West or Keele Bingo Country, but that it would reduce the number of patrons attending the 1:00 p.m, 7:00 p.m. and 10:00 p.m. time slots at Finch Bingo Country by an estimated 10%. The study concludes that the 1:00 p.m., 7:00 p.m. and 10:00 p.m. sessions would be negatively affected by the 10% loss of patrons, but for the most part, would remain profitable. A further analysis shows that a 15% loss in patrons would place many of the sessions at Finch Bingo Country in a loss position. The argument is made, however, that the charities at Finch Bingo Country will continue to receive proceeds, over and above bingo proceeds, from ancillary gaming events such as Super Jackpot, Nevadas and Superstar.

The study concludes that the relocation of the Delta Mayfair Bingo Hall is appropriate even though approval of the relocation will reduce the net proceeds to charities at the Finch Bingo Hall. This is based on the opinion that denying the relocation would result in the outright closure of Delta Mayfair Bingo Hall and eliminate all bingo fundraising opportunities for the 37 charities operating there.

Price Waterhouse Study

The Price Waterhouse study is not a market study, but a financial analysis conducted on behalf of Bingo Country. The study shows the reduction in net charity profit at five Bingo Country halls that would result from a 5%, 10%, 15% and 20% reduction in attendance. The study concludes that there is a strong indication that the proposed relocation would result in reduced charity profits at one or more the of the five Bingo Country halls included in the study.

Cadith Entertainment

The submission by Bingo Country (Cadith Entertainment) analyzed the annual impact on gross bingo hall charity receipts in the five Bingo Country Halls most affected by the relocation of Delta Mayfair. Using an across the board figure of a 10% reduction in attendance, the total reduction in annual charity receipts at the five Bingo Country halls would be $1.8 million.

Analysis

The provincial "Criteria and Procedures for Bingo Halls" require that the following principles be applied in reviewing a proposal to relocate a bingo hall:

a. that there be fair and equal access to the charitable gaming marketplace;

b. that charitable organizations have the opportunity to maximize lottery fundraising dollars while recognizing the impact on other charitable organizations currently conducting bingos;

c. that decisions respecting new bingo halls be made in the best interests of the local and regional communities where the proposed bingo hall is to be located; and

d. that there be public input into the decisions concerning proposed new bingo halls or relocations of existing bingo halls.

Keeping these principles in mind, the following is an analysis of the options available to Council:

Option 1 - Approve the relocation.

Approval of the relocation of Delta Mayfair will enable the 37 charities currently operating out of Delta Mayfair to continue to raise funds through bingo events. However, based on the analysis provided in the Market Study, approval of the relocation will impact on the profitability of sessions at the Finch Bingo Hall and, ultimately, reduce the amount of bingo proceeds at the hall. Based on a sample analysis of the 1:00 p.m., 7:00 p.m. and 10:00 p.m. time slots at Finch, an estimated 40% of the time slots would operate at a loss or on a break even basis as a result of the Mayfair relocation. It should be noted, however, that in the current situation, some of the sessions at Finch are already operating at a loss. Thus, the Mayfair relocation will put additional pressure on Finch to eliminate less profitable sessions, and to consider upgrading the hall facility to attract additional patrons.

Option 2 - Not Approve the relocation.

Delta Mayfair has stated that it will likely close if the relocation is not approved, leaving 37 Delta Mayfair charities without the ability to fundraise through bingos. If Delta Mayfair closes down outright, the 37 displaced charities would be placed on the unified City of Toronto waiting list for time slots in bingo halls across the City. This waiting list currently stands at 135 charities.

Conclusions:

Based on the above analysis, and recognizing that any decision made regarding this relocation will impact on charities conducting bingos, the priority must be to maximize access to fundraising opportunities to as many charities as possible. It is therefore recommended that Council adopt

Option 1 - Approval of the Delta Mayfair Relocation proposal.

Contact Name:

Barbara McEwan

Director, Legislative Services

392-4373

Novina Wong Margaret Rodrigues

City ClerkCommissioner, Corporate Services