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1 Report to Rapport Au: Finance and Economic

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1 Report to Rapport Au: Finance and Economic 1 Report to Rapport au: Finance and Economic Development Committee Comité des finances et du développement économique 5 September 2017 / 5 septembre 2017 and Council et au Conseil 13 September 2017 / 13 septembre 2017 Submitted on August 22, 2017 Soumis le 22 août 2017 Submitted by Soumis par: John Smit, Director / Directeur Economic Development and Long Range Planning / Développement économique et Planification à long terme (613) 580-2424, 13866, [email protected] Ward: CITY WIDE / À L'ÉCHELLE DE LA File Number: ACS2017-PIE-EDP-0030 VILLE SUBJECT: Ontario Regulation 81/12: Municipal Requirements for the Establishment of Rideau Carleton Raceway as a Gaming Site OBJET: Règlement de l’Ontario 81/12 : Exigences municipales relatives à la création d’un site de jeu à l’hippodrome Rideau-Carleton REPORT RECOMMENDATIONS That the Finance and Economic Development Committee recommend Council approve: 1. The establishment of the Rideau Carleton Raceway (4837 Albion Road) as a Gaming Site, by resolution, in accordance with requirements set out in Subsection 2(2)3.ii of Ontario Regulation 81/12, as described in this report. 2 2. The process for the municipality to seek public input into the establishment of the proposed Gaming Site at Rideau Carleton Raceway (4837 Albion Road) in accordance with requirements set out in Subsection 2(2)3.i of Ontario Regulation 81/12 , and as described in this report. 3. That the City Clerk and Solicitor be delegated the authority to provide the Council approval and public input to the Ontario Lottery and Gaming Corporation in the form required by the Province of Ontario. RECOMMANDATIONS DU RAPPORT Que le Comité des finances et du développement économique recommande au Conseil d’approuver : 1. la création d’un site de jeu à l’hippodrome Rideau-Carleton (4837, chemin Albion), par résolution, conformément aux exigences du sous- alinéa 2(2)3)ii) du Règlement de l’Ontario 81/12 figurant dans le présent rapport; 2. le processus de consultation publique mené par la municipalité sur la création du site de jeu envisagé à l’hippodrome Rideau-Carleton (4837, chemin Albion), conformément aux exigences du sous-alinéa 2(2)3)i) du Règlement de l’Ontario 81/12 figurant dans le présent rapport; 3. la délégation au greffier municipal et avocat général du pouvoir de transmettre à la Société des loteries et des jeux de l’Ontario l’approbation du Conseil et les observations du public, sous la forme exigée par la province de l’Ontario. BACKGROUND Rideau Carleton Raceway Limited ("RCR") has operated the Rideau Carleton Raceway Entertainment Centre and Standardbred Racing since 1962. As a result of a Minister’s Zoning Order, OLG slot machines have been permitted at the Rideau Carleton Raceway (RCR) since 1998. At this time, the Rideau Carleton Raceway employs 540 people, and the City of Ottawa received $4.7 million in revenues from RCR in 2016. Since 2000, the City of Ottawa has received $66.1 million from RCR in accordance with the City of Ottawa’s revenue-sharing agreement with the Ontario Lottery and Gaming Corporation, which is the provincial government agency that conducts and manages gaming facilities in Ontario, in addition to its other responsibilities as set out in the Ontario Lottery and Gaming Corporation Act, 1999. 3 In 2010, the Government of Ontario directed the Ontario Lottery and Gaming Corporation (OLG) to complete a comprehensive review of the province’s lottery distribution network and land-based gaming facilities. The result was a report called, Modernizing Lottery and Gaming in Ontario, released in March of 2012. The OLG then initiated a three-step competitive process to select private sector companies and/or consortia to develop or redevelop gaming operations in 29 designated zones in Ontario. The Ottawa Area Gaming Zone, being Zone E4 which includes most of the City of Ottawa, and the United Counties of Prescott and Russell (City of Clarence-Rockland) (see Document 2). Only one gaming entertainment centre was permitted in each zone. The process timelines followed by the OLG were as follows: 1. Request for Information (RFI): published May 17, 2012, and closed July 4, 2012; 2. Request for Pre-Qualification (RFPQ): released on June 2, 2016 and closed August 4, 2016; and 3. Request for Proposal (RFP): released October 22, 2016 and closed February 9, 2017. Ottawa City Council considered a number of reports, and made a number of decisions regarding the City of Ottawa’s participation in the OLG’s process and site selection, including contribution agreements (one a replacement agreement for the slots at the RCR and another for a future expanded facility following the RFP process), for a gaming facility within the City of Ottawa, as follows: 1. October 2, 2012 - Finance and Economic Development Committee, Report ACS2012-CMR-OMC-0021 City of Ottawa’s Response to Ontario Lottery and Gaming Corporation Request for Expressions of Interest; 2. October 10, 2012 - City Council 3. November 6, 2012 - Finance and Economic Development Committee, Report ACS2012-CMR-FIN-0046 Execution of a Municipal Contribution Agreement with the Ontario Lottery and Gaming Corporation (OLG) 4. November 14, 2012 - City Council 5. July 9, 2013 - Finance and Economic Development Committee, Report ACS2013-CMR-FED-0003, City of Ottawa Participation in OLG RFP Process 4 6. July 17, 2013 - City Council 7. August 26, 2013 - Finance and Economic Development Committee, Report ACS2013-CMR-FED-0004, City of Ottawa Participation in the Ontario Lottery and Gaming Corporation (OLG) Request for Proposal Process 8. August 28, 2013 - City Council 9. October 1, 2013 - Finance and Economic Development Committee, Report ACS2013-CMR-FIN-0039, Execution of New Municipality Contribution Agreement with Ontario Lottery and Gaming Corporation (OLG) 10. October 9, 2013 - City Council Each of these reports and decisions were predicated on continued gaming at the Rideau Carleton Raceway. With specific reference to the City of Ottawa Participation in the OLG RFP Process, City Council on August 28, 2013, approved the following recommendation: That City Council direct the Mayor of the City of Ottawa to inform the Ontario Lottery Gaming Corporation (OLG) that the City will take part in the OLG’s RFP process as a "host city" for a gaming facility on the understanding that the only location acceptable to the City of Ottawa for an expanded gaming facility is the current location at the Rideau Carleton Raceway, with the current allocation of 1250 slots and the approved expansion for 21 gaming tables. On May 15, 2017, OLG announced the results of its RFP process, and that it had selected HR Ottawa, LP (known as “Hard Rock Casino Ottawa”) as the service provider for the Ottawa Area Gaming Zone. The Hard Rock Casino Ottawa partnership consists of HR LP Investor Inc. (owned by Hard Rock International) and RCR Investor Inc. (owned by Rideau Carleton Raceway Holdings Limited). The gaming facility would be located at the Rideau Carleton Raceway (4837 Albion Road). The announcement also indicated that HR Ottawa would take over day-to-day operations at the RCR in fall 2017. It further noted that HR Ottawa is planning to undertake, at some point in the future, a multi-phase construction process to transform the current OLG Slots at Rideau Carleton Raceway to an upgraded entertainment and gaming destination in Eastern Ontario. HR Ottawa noted in the announcement that they “plan to potentially invest more than $320 million to create an electrifying, integrated entertainment destination, leading to the potential creation of more than 1,900 construction-related jobs and 2,000 direct and indirect ongoing jobs and opportunities 5 for the Ottawa community”. This future potential expansion is not currently before FEDCO nor Council. With respect to current operations at the Rideau Carleton Raceway, in March 2011, City Council approved the addition of 21 gaming tables to the facility as a two-year pilot project. Council approved the zoning for this addition on June 22, 2011. Although approved, the OLG, operator of gaming at OLG, did not install gaming tables. HR Ottawa has advised staff that they will be taking over operations of the Rideau Carleton Raceway in mid-September, under the existing zoning and that a formal letter would be submitted to have a report brought forward to FEDCO and Council to address the requirements of Ontario Regulation 81/12. That letter, dated August 18, 2017, is enclosed as Document 1. Staff has advised that the planning approvals are in place for HR Ottawa to begin operations of the RCR, and proceed with the additional gaming tables not yet installed. The introduction of the 21 gaming tables permitted under the current zoning are expected to result in increased revenues for the City. However, the mandatory regulatory approvals are not yet in place. More specifically, these include the municipal actions listed under Subsection 2(2)3.i and Subsection 2(2)3.ii of Ontario Regulation 81/12: Requirements for Establishing a Gaming Site (“O. Reg. 81/12”). These two actions are as follows: 2 (2) 3. In the case of a proposed gaming site to be established at premises in a municipality or on a reserve, i. the municipal council or the council of the band, as the case may be, seeks public input into the establishment of the proposed gaming site and gives the Corporation, in writing, a description of the steps it took to do so and a summary of the public input it received; and ii. the municipal council or the council of the band, as the case may be, passes a resolution supporting the establishment of the gaming site in the municipality or on the band’s reserve and gives a copy of the resolution to the Corporation.
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