Sam Reynolds: City of Vancouver’s HootSuite deal shouldn’t be kept secret
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.
Apr 8, 2013 at 4:51pm
"$4.55 million was allocated from the Capital Financing Fund for building improvements." That sounds to me like Vancouver potentially gave Hootsuite a sweetheart deal on the lease, then paid millions more upgrading the company's new headquarters.
Apr 8, 2013 at 5:14pm
"If the taxpayers subsidize the operations of a business, it’s in the public’s interest to have the nature of these subsidies disclosed."
Please check into RBC and all financial sector companies. Tax Payers subsidize all sorts of private for-profit companies. To make this piece more balanced and less anti-internet look at traditional industries and their tax payer subsidizes.
Apr 8, 2013 at 5:23pm
"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."
Coincidence, that the recently vacated #VPD Vancouver Police Department in #DTES 312 Main St near Hastings is being pushed by Mayor Robertson's Vision Gov't as a central part of the city Digital Strategy. To give the building away for free or $1 and subsidize tech corps through Taxpayer$$$$ as as a VENTURE CAPITAL HUB
Are Police Chief Jim Chu or the Police Union playing any part in this SWAP? We in the DTES want this site for Social Housing and Community Space
We do not want further Gentrification and Displacement
We not want #DTES to be turned into a subsidized make believe wanna be Silicon Valley an Endless Pit for TaxPayer$$$$ we want Justice Dignity Equality Housing and a Real Local Economy that benefits the Majority low Income People of the DTES.
Here's what a manager from HootSuite had to say about #DTES before #HootSuite left and i would add we asked for apology but was not given one by Employee or HootSuite.
@evebelanger77 Last day in #DTES office,I will probably miss the midget prostitute the most. Smell ya later Eastside literally
@nannylula @Leonashanana @evebelanger77 @invoker Shame not so easily disappeared – Wait&Watch • @p0stcap @_c_n_ too pic.twitter.com/E3QoggSD
Boycott #hootsuite 4 poor bashing RT @evebelanger77: Last day in #DTES office, I will probably miss the midget prostitute the most...
Apr 8, 2013 at 7:22pm
There are appallingly glib moments in this article, which does not benefit from balanced reporting. While there are several one-sided statements made, the one I take immediate exception to is Mr. Reynolds' repeated insinuation that HootSuite was on the verge of leaving Metro Vancouver when the company was enticed back to the fold by a rental deal. Statements such as the below are easily refuted with a quick Google search; Mr. Holmes, HootSuite's CEO, has long been a proponent of staying in -- and benefiting the economy of -- Vancouver.
Mr. Reynolds' statement: "Considering the jubilant tone of the press release that announced the deal, HootSuite was probably close to being added to that list."
Nov 2011 Globe & Mail article which avers Holmes' commitment to the City of Vancouver -- and there are numerous others: http://www.theglobeandmail.com/report-on-business/careers/careers-leader...
Apr 8, 2013 at 7:35pm
Homeless Dave: How will we fund expensive renovations to public buildings to turn them into social housing, community centres, etc. if there are no companies in the city employing taxpayers?
I'm pretty sure your requests to the foreign owners of downtown condos for support for building homeless community resources will fall on deaf ears if they're the only property owners left in the city.
Cities around the world deliver perks and tax credits to lure and retain desirable employers -- which Hootsuite most certainly is. I'm not even sure it's true (I don't know) that this has been done here... but if the opportunity presents itself, it should be.
The dogpile of hate heaped on Hootsuite over the last 4 days by mostly local people really should be examined. Tall Poppy Syndrome Much?
Let's wait until Hootsuite staff are driving around in Ferraris and buying all of Dunbar before we start organizing the Night of the Long Knives.
Apr 8, 2013 at 8:20pm
A homegrown local company achieves international success, and we all en masse try to tear it down?
Just another example of Vancouver eating its young.
Apr 8, 2013 at 9:29pm
What if Hootsuite was planning on moving to, say, Burnaby. It's outside Vancouver city proper but in Metro Vancouver and arguably still contributing to the economy of Vancouver.
Apr 8, 2013 at 9:51pm
I can't decide if Mr. Reynolds is upset about the sweetheart deal or if he's insulted that his FOI was so redacted. Or maybe he's just really that naive.
Of course a deal was reached! Of course exceptions are made! Of course concessions are given! Or should we believe that even the monopoly that is the exalted Canucks operates on a level playing field with other entertainment businesses and even other sports teams in the city? What about the film industry? Biotech firms? Of course they are given breaks. Sorry, but this just seems like a journalist reaching for a story that's not really there.
I think that government generally acts in ITS best interest - and gasp! - not in the best interest of each and every taxpayer. The city saw the tax dollars and spin offs and made a deal. Good for them. Talent is mobile. If Vancouver didn't come to the plate, Burnaby or Surrey would have. HootSuite is in a strong position and played their hand well. Are the details kept secret? Yes. Why? Maybe so the next big firm looking for a deal doesn't know what HootSuite got, allowing the city to negotiate the next deal from scratch without showing their cards up front.
I understand that The Straight likes to stir the pot and encourage debate - fair enough - but come on guys, let`s put a little more thought into who you allow to speak for you. I guess you got your wish though. The fact that I felt compelled to comment on such an obvious issue is proof enough that you won.
Apr 8, 2013 at 11:48pm
Please Georgia Straight do not start running articles by this grinning fascist. Everything I've ever read by him reeks of deference to Conservative power and shameless sucking up to corporations. He's a junior Harper-in-training, except even more smug somehow.
Apr 9, 2013 at 7:57am
This article could have been 150 words long and it would have been readable. That's instead of having to read a long-winded tale about how Sam Reynolds did an FOI and couldn't confirm anything.
"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."
Since when did "presumably" and "quite likely" belong in journalism?
I just lost some respect for The Georgia Straight for publishing this without axing most of it.