Last November, HootSuite reached a deal with the City of Vancouver to keep the headquarters for its rapidly expanding company in Vancouver. Presumably, the company was growing too fast for its Gastown office and needed to find new digs in the Lower Mainland. Quite likely, though it’s not confirmed, the company was considering moving its nest outside of a city called Canada’s most expensive office market.
But, ultimately, HootSuite was to stay in Vancouver. When the deal was announced, celebratory press coverage noted that the city and HootSuite came to a deal for the company to occupy (with an option to buy) a recently vacated Vancouver Police Department office in Mount Pleasant. While the building is assessed at $9.6 million, neither party specified how much the social media company would pay to lease the premises, though the city assured its new tenant would pay “market rent”. Journalist Frances Bula did some asking, and a commercial real-estate broker speculated it would be in the $1-million-a-year range.
Not satisfied with the media’s lack of investigation, I decided to try and FOI my way to the answers. I don’t have anything against the company, but I just thought it would be a fair question to ask about the deal the two parties had reached.
I sent a query to city hall’s FOI department asking what HootSuite is paying in leasing costs for the office, for any information about a cost-benefit analysis done before granting HootSuite the lease, and which party initiated the request. For good measure, I also sent an FOI query to various provincial departments asking for information on perks, benefits, or grants the company might get.
Within a few days I got a response back from the province. It was a humourless and plain document informing me that any information regarding a deal the province makes with a corporation is considered private and protected under the Privacy Act:
Please be advised the records you requested are withheld in their entirety pursuant to section 21.2 (Disclosure harmful to business interests of a third party).
This email from the province was rather foretelling of what I’d get back from the city.
Months after my initial request to the city’s FOI department, I got a response back in the form of a nearly 300-page PDF. Glancing through the first few pages of the document, I noticed a disclaimer stating that some of the contents of the document had been redacted under the Privacy Act.
When I skimmed through the document, I realized just how much of the document had been redacted.
Although an FOI analyst at city hall had gone through email accounts and archives and had diligently collected conversations between the likes of Sadhu Johnston, the deputy city manager; Darren Houser, a supervisor in the city’s real estate department; Wendy Stewart, of the city’s communications department; and various executives at HootSuite, including CEO Ryan Holmes, about the leasing of the building to the company, all information about the cost-benefit analysis of the deal is redacted as is the actual amount HootSuite pays.
Some things are revealed in the series of exchanges:
- Negotiations began in the summer of 2012.
- There was considerable discussion about if the building could be rezoned.
- The lease was approved in late June by a majority (though not unanimous) of votes in an in-camera city council meeting.
- According to Wendy Stewart, the mayor took great interest in the progress of the deal.
Why is it that this conversation between HootSuite and the City of Vancouver was private?
Vancouver has lost a number of prominent business tenants—Mayor Gregor Robertson’s former company Happy Planet is one of them—to other cities in the Metro area. Considering the jubilant tone of the press release that announced the deal, HootSuite was probably close to being added to that list.
Did Hootsuite receive a perk or benefit (like a preferential lease rate) for committing to staying in the city? What was the cost-benefit analysis of keeping the business within Vancouver? Have other companies tried to arrange similar deals with the city? Was HootSuite picked over a company in a different sector that had also applied for occupancy of a city-owned building?
These are some of the questions left unanswered by the lack of disclosure by the city. If the taxpayers subsidize the operations of a business, it’s in the public’s interest to have the nature of these subsidies disclosed.
It’s wrong for the government to pick winners and losers by giving certain companies or entire sectors perks, benefits, or grants, and not disclosing to the public how the money was spent. If the social media bubble eventually bursts, taking HootSuite with it, city hall will be in the unfortunate position of holding a losing bet.