New cost estimates from the University of Toronto Students’ Union (UTSU) show that the Student Commons is expected to carry a deficit of over $800,000 in its first eight years of operation, even with a student levy increase of 10 per cent each year.
In early September, The Varsity reported that the Student Commons project would have a deficit of $300,000 in its first year.
Vice-President Internal Mathias Memmel’s executive report for January stated, “Reverse-engineering this mess has taken longer than expected.”
Memmel explained to The Varsity that the UTSU is trying to put together a “viable” business plan, but clarified that “viable” means “enough to avoid bankruptcy.”
He continued, “Even if we pull that off, we won’t be able to do much more than keep the lights on until 2025 or so.”
Previous UTSU administrations planned to run food services at the Student Commons to finance the building operations; over the summer, the UTSU engaged Kaizen, a food services consulting firm, to see if this was possible.
“Based on our analysis, any food service operation would run at a loss,” said Memmel.
Instead of food services, Memmel said that the UTSU is looking into leasing out space to “student services and student-oriented business, which we’ll be able to do without taking space away from student groups.”
Plans for a central student space at UTSG were put in motion in after a referendum took place in 2007, when students voted in favour of a levy to fund the project. The Student Commons will be located at 230 College Street, which is the current home of the John H. Daniels Faculty of Architecture, Landscape, and Design.
Memmel has long criticized the Student Commons agreement, which the UTSU signed in April 2015. Under the agreement, the UTSU is required to pay: a $200,000 yearly licensing fee for 25 years, an operating cost of approximately $200 per square metre of usable space in the building, a building manager, and security expenses.
“If the outgoing executives hadn’t signed the contract on their last day [in] office, I’d want to hold another referendum. It’s not that there isn’t a need for more student space, and student groups would definitely benefit, but students voted for something that’s never going to exist,” he said.
Early plans for the Student Commons had the building located at 100 Devonshire Place, where the Goldring Centre for High Performance is currently located.
“Basically, previous UTSU administrations wanted a bigger building, and now we’re here but no one wanted to put the effort in to actually crunching the number or thinking critically about its operation,” said Memmel.
The union plans to release a Business and Operating Plans by the end of the month. Memmel insisted that the plan will have to be followed to save the project.
The Student Commons is expected to open in the fall of 2017.