Nutcracker ballet funding has councillors' heads spinning
City staff will present a report on why grants were rejected
The city will take another look at its decision not to grant the Canadian Ballet Youth Ensemble (CBYE) about $75,000 over the last two years.
Councillors have voted to investigate past decisions to reject grants related to the charity's annual performances of The Nutcracker. The report will unravel some of the confusion councillors felt during Wednesday's general issues committee meeting.
"I've never heard so many twists and turns in my life," Coun. Judi Partridge said before she and fellow councillors voted for a staff report.
For the past two years, members of the city's grants committee have rejected one-time grants of about $35,000 so the local non-profit could hire the Hamilton Philharmonic Orchestra for its annual Nutcracker performances.
The committee also voted not to give the CBYE Community Partnership Program grants for 2011 and 2012, which amount to about $14,000 each year.
These denials were based in part on a misconception that the CBYE owed back taxes on a property it only rents, the charity's board members said Wednesday.
"We want fairness and equity," said Gary Santucci, spokesperson for the group.
The request for a report "is a recognition that there's confusion that needs to be clarified in light of our 15-year history presenting The Nutcracker."
The issue began in 2011, when CBYE members learned of a new production of The Nutcracker in Burlington, which it predicted would cut deeply into audience attendance at the Hamilton Place performance. The CBYE opted to hire the Hamilton Philharmonic Orchestra to perform live, thus giving the Hamilton production an edge, said board member Gina Gentili.
HECFI senior staff assured the CBYE that its grant request for $35,000 to pay the orchestra would be approved, Gentili said. But councillors turned it down due in part to the unpaid property taxes, she said, and the cost put the CBYE in debt.
The CBYE applied for another one-time grant in 2012 for the same reason, but didn't get approval by the end of the year. Instead, it released a taped version of the 2011 performance, said Belma Diamante, the ensemble's CEO.
The CBYE is now embroiled in a legal challenge with the city over $48,5000 plus interest involved in hiring the orchestra.
The ensemble wants the "reinstatement" of its Community Partnership Program grant request, Gentili told the committee Wednesday. It also wants council to reconsider its funding request related to hiring the philharmonic orchestra in 2011.
The CBYE's building at 145 Main St. E. is owned by an Ontario numbered company affiliated with Diamante. When the grants committee faced the $35,000 request for 2011, the landowner owed about $98,000 in property taxes.
At the time, the ensemble presented a lease agreement saying it was responsible for 100 per cent of the taxes, and the city granted a charitable deduction of 40 per cent on the back taxes, said Larry Friday, director of taxation.
But now, the CBYE is saying it was only a tenant at the building, and shouldn't have been judged for the outstanding taxes.
'We were perplexed'
"We were perplexed by this assessment as the CBYE did not own the property and therefore could not be liable in any way for the property taxes," Gentili said.
Coun. Brian McHattie pointed out during the meeting that if the CBYE wasn't accountable for the taxes, the numbered company shouldn't have gotten the 40-per cent reduction since it's not a charity.
Partridge agreed.
"Can someone help me reconcile those two statements?" she said. "Because they're completely opposed."
Santucci said afterward that despite the lease's clauses, "ultimately it's the property owner that's responsible" for the taxes.
And the company paid the city the outstanding taxes on March 25, he said.
City staff did not factor in the outstanding taxes when it assessed CBYE's grant eligibility anyway, said Rick Male, director of financial services. It weighed the request on other merits.
Incomplete application
In 2011, the CBYE submitted an incomplete application, and in 2012, its application scored only 49 out of 100 for grant eligibility, Male said.
The CBYE has never seen the eligibility criteria, Santucci said.
"We'd like to see how they arrived at the score based on our history and percentage of grants."
The CBYE adds to Hamilton's economy, Gentili said. It has generated about $18 million in economic activity in the last 15 years, and generated $1.2 million for HECFI from 2006 to 2011, she said.
In addition, the community grant CBYE requested accounts for less than five per cent of the box office receipts generated by The Nutcracker, Santucci said.
'I hate rollercoasters'
Coun. Maria Pearson asked for the staff report to get to the bottom of the grant rejection.
"I hate rollercoasters," she said, "and I tell you this one's going up and down today."
The CBYE and Diamante are not strangers to the city's grant process.
In 2008, the city granted $20,000 for a heritage feasibility study on the Tivoli Theatre, which the ensemble and its CEO owned, and $75,455 in 2009 for building stabilization and heating improvements.
City council also approved a $50,000 interest-free loan to retrofit the theatre's roof in December 2009. The loan was repaid in March.
The theatre has since been sold to Diamante Holdings.
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