Tony Battaglia has had a presence in the Hamilton business/entrepreneurial community for decades. His efforts and those of his consortium, to find a way to bring the Royal Connaught back to life, have recently thrown him into the media spotlight- which he is no stranger to. I thought Tony would make a very interesting guest. My instincts were right. Tony has been working on his answers for many weeks; partly due to the holiday season that came upon us and partly due to the fact that he told me that he had so much to say, that it was challenging culling his answers down. He managed to do so and I think you'll find his answers and the questions I put to him, captivating. I asked Tony some pretty tough questions. To his credit, he didn't back down and answered all 11. Here he is- 10+ Tough Questions with Tony Battaglia. (note: When I asked Tony these questions, the outcome of the funding request for the Connaught, was not yet known).
1. Being a businessperson and entrepreneur, can you talk about some of the challenges you’ve encountered when trying to succeed in your business ventures in Hamilton. What is Hamilton doing right, and what is Hamilton doing wrong to support entrepreneurs?
This is a very broad question so I will try to keep my answer related to a geo-political context. Over my 30 years as an entrepreneur I have been committed to doing business in this city. Over that time outlying areas have seen tremendous growth while Hamilton just kept trudging along. The reasons are many but three major ones stand out in my mind. They are: political climate, infrastructure and economic dependence on heavy industry.
The entire Hamilton to Toronto corridor including Burlington, Oakville and Mississauga have blossomed because of the highway access and infrastructure that these cities invested in well ahead of the growth. They were able to accommodate the growth and we were not. A perfect example is the lands surrounding Hamilton’s airport. I agree that 20 years ago, there was no demand for developable land in the area but how much has that changed now? By sitting idle, Hamilton is so far behind the eight ball on this one that it will take another decade before we can begin to see the fruits of the growing airport. The city should have been at least planning and approving the area for development so when the demand came, we would be ready to go. Instead many companies who have been here looking for a home have moved on to Brantford and other areas that were “shovel ready”. This has been a perpetual problem in the city and there are many more examples. We have been so focused on our heavy industry that we never prepared for a more diverse or changing economic base. We always seem to be playing come from behind.
What Hamilton is doing right is finally doing some strategic planning although it will take years to see those benefits. That is if the politicians actually implement the plan and not just shelve it like they have always done.
2. I know you and a consortium have been at it a long time to find a viable application for the Royal Connaught Hotel. The recent turn that this project has taken, has been met with criticism from many. Some maintaining that the call for public money is inappropriate, while others maintain that the prospect of mixed use affordable housing, is not an ideal fit for a building of such historical significance. How do you respond to that?
I know that varied opinions have been expressed on this issue and it is understandable. The Royal Connaught has such a grand history as Hamilton’s premiere hotel that nobody wants to see it change. The fact is, neither do we. We have spent the last 5 years of our time and hard earned money to bring the Grand Old Lady back to life. The sad reality is that the hotel market in Hamilton is absolutely un-financeable. The banks and other big money lenders do not see Hamilton as a viable market for obvious reasons. The truth is that all of Hamilton’s downtown hotels have always struggled to stay afloat. So much so, that they never had the capital to re-invest in improving the properties. This in turn led to a further erosion of the market and the vicious circle keeps going.
Many grand old buildings in every big city have seen the adaptive re-use of older properties so what makes anyone think that Hamilton is exempt. If every building could only be used for its original purpose then I cannot begin to list the number of buildings that would be empty. By adapting older buildings to other uses that make sense, is the only way in which we can preserve these beautiful historic buildings.
There is also a big misperception about our proposal for mixed use rentals. I believe that the problem lies with the name of the government program. Because it is called the “Affordable Housing Program” people think that this is geared to income housing. In fact, the rents offered will only be 20% below market value which would still be un-affordable for people on government assistance. If the name of the program were changed to reflect what the program really is, it would be called the “Rental Housing Stimulation Program.
Downtown needs more working residents to stimulate renewal. This project would have brought over 200 new such residents to downtown. It is indeed a shame that some politicians in this while they pontificate downtown renewal as their agenda, they worked behind the scenes to have the funding derailed by the province.
3. Reflect upon the present city council. What is your confidence level in their ability to transform the city of Hamilton.
My confidence level on this council generating a real transformation is quite low. Firstly, and in fairness, it is not the council that will cause any transformation. That has to come from private investors, business confidence, lenders and residents having a strong belief that Hamilton will be the place to be. Council’s role is to build the infrastructure and create the political environment for that to happen. I have heard far too many politicians espouse that if they are elected, Hamilton will be open for business. I think they believe it but they just don’t know how to do it. There have been some good stimulus programs put in place to do so but with all the in-fighting, grandstanding, stonewalling and passing the buck that goes on at council, nobody I have talked to is gaining any confidence.
Too often this and previous councils have scuttled good projects out of fear and parochialism. If a few of their constituents make a few phone calls against something, they react as though the whole city is against it. They need to have the independence and courage to do what is right for the city, not just what’s right for their political future.
I very strongly believe that the only way we get real change on council is by doing 2 things. The first is to impose term limits. Nobody should be on council for more than 2 terms especially since our terms now run 4 years. The second is to update the ward boundaries. By creating a boundary map that mixes neighborhoods, we will have wards made up of different demographics. This will go a long way towards changing council members voting patterns because each ward will have constituents of varying social, economic and cultural backgrounds to consider.
4. What is the most profound lesson you have learned as a business person. What advice might you have for those who think big and want to see significant change happen in our city?
I have certainly learned a lot in my 30 years in business. A significant lesson I have learned is that I actually learned more from my failures than from my successes. This only comes from taking risks. The most profound lesson I have learned is to not lose ambition when something goes wrong because it always will. I have found that by maintaining an open mind and positive attitude, when you get knocked down, you usually get back up stronger than before. A lost business deal often turns into an even better one. The bigger the deal, the more likely that it will fall apart, some times more than once. I have learned that each time the deal comes back to life it ends up being a better deal. As the old saying goes, ”seek and ye shall find”.
5. Why do you think the core continues to present such a challenge, in terms of turning to around. What do we need to do?
I think I have mostly answered this in previous questions. In my humble opinion, we need 3 things…people, people, people. New business won’t come if there aren’t more people. More people won’t come if there isn’t more business. This perpetual cycle must be broken so that we can replicate what happened on Locke St. By business people creating a destination that appealed to a niche market (antique shoppers), people started to come. Once they were there, it was nice to walk around and maybe have a coffee or something to eat. Because more people are walking around, it made it a place for entertainment, bars, festivals, sidewalk sales etc. That made it a more desirable place to live which in turn brought more people to the area. That in turn made it feel safer etc. The old cycle of decay has been replaced with a cycle of renewal. The same is starting to happen with James St. N. and the art district. I think you get the point. I think Downtown is pretty safe but it also needs to look and feel safe. This will happen when more people are around. Bring more entertainment first, things like festivals, music in the park, more outdoor cafés. Once more people are around it will be a better place to live and the cycle will start and gain its own momentum.
6. What are your thoughts on the evolution and explosion of the artistic community in Hamilton. Do see this movement as a natural lever to propagate meaningful change in our city?
Absolutely, as I alluded to in the previous question.
7. What advice do you have for Mayor Eisenbeger?
Hang in there baby. I always had respect for Fred back to when he was an Alderman. I can’t think of a mayor in recent memory that has been the problem. The problem has been and continues to be the fractured council. I do think that in his next term he will have to be stronger in out-voicing the constant critics and bullies on Council. Hopefully we will get plenty of new blood for him to work with. People with vision and courage who actually want to take the city forward rather than just fixing pot holes.
8. In a Hamiltonian interview, on the topic of corporate and union donations to municipal elections, the Mayor had this to say “I have no doubt that the majority of special interest campaign contributions are intended to influence. At the municipal level, the concentration of campaign contributions from a single set of interests is extraordinary and the imbalance is systemic. In the 2006 Municipal election nearly half of the money raised by Hamilton candidates came from corporations or trade unions. Of that 77% of the corporate donations and 62% of Union contributions, went to incumbents.”
How do you feel about the Mayor’s thoughts on this?
I have a high degree of respect for his opinion however I do not believe that corporate or unions should be stopped from contributing. Lowering the limits on donations effectively does the same thing. Candidates need the money to run an effective campaign in which they must expose their views on the issues. Without campaigns, most people will just vote for the incumbents even more because they won’t know anything about alternative candidates.
9. How do you fend off criticism that the Connaught was in tax arrears for so long?
I won’t go into a great explanation on this matter. Suffice it to say that Grand Connaught didn’t do anything that a large number of business’s do. We were putting our money towards getting the property re-developed which was more important than keeping the taxes up to date on an empty building with no income. One could argue that City and Province should offer relief in cases like the Connaught because of their significance to urban renewal.
Another overlooked true fact is that the City actually benefits when taxes fall in arrears because the interest they make on the arrears is much more than what they earn on their investment portfolio. As long as the taxes do get paid, which was pretty much a guarantee in our case, the City makes a good return on tax arrears.
10. I think it is only fair to hear directly from you as to how your efforts have had a positive effect on Hamilton. Can you speak to this?
This is a question that almost requires me to boast about my efforts or accomplishments. One might think that because I have been in the media frequently that I would enjoy this opportunity. The truth is that I much prefer to just do what I like to do without fanfare. This is true with business and charitable efforts. On that basis I will just say that I believe it is important for those who can, to give back and it is important for everyone in the community to do whatever they can to make it a better place to live for future generations.
11. What is the culture in Hamilton, in terms of encouraging innovativeness and new businesses?
There are a few big stars in this category. Thank God for Mcmaster, Mohawk, St. Joe’s, HHS and some great corporate citizens like Ron Foxcroft, David Braley and a host of other great citizens. Without their efforts and contributions, Hamilton would be a ghost town. We have probably chased away more business than we have attracted over the last 20 year, mostly over political mishandling. I wish some good journalist would take the challenge of digging up the companies that have moved out and took their good jobs with them. I’m willing to make a bet that a high percentage left because of the cities lack of support and innovativeness.
Thank-you Tony for your interest in Hamilton and your contribution to The Hamiltonian.