STTA under fire for rapid closure of Innovation Lab, merger with CATAAlliance

A bailiff’s notice remains affixed to the front door of the Smart Toronto Technology Alliance’s (STTA) Innovation Centre as the landlord seizes assets as compensation for the organization’s broken lease. The STTA hurriedly vacated the premises late last month after deciding the lab was no longer viable, leaving sub-tenants of the building scrambling for space and the organization’s president, its sole remaining staffer, relocated to Toronto’s Rogers Communications Centre in advance of dissolution of the association. The move to shut down the Innovation Lab coincides with the acquisition of the STTA by the CATAAlliance, and it now becomes a division of the well-recognized lobby group that has deep roots in Ottawa’s federal government bureaucracy. Observers and sources in Toronto’s new media community were caught off guard by both the merger and the closing of SMART’s facilities at 74 Fraser Avenue. They’re wondering how nearly $300,000 granted to the organization by the Ontario provincial government, and thousands more in membership fees and event registrations, were spent - or whether anything remains in the way of assets except for the STTA’s members, who now automatically become members of CATA. STTA president Cindy Pearson says the rapid-fire announcement that the association would be subsumed into CATA and the decision to quickly vacate its premises were taken as prudent steps on behalf of the membership. "The Innovation Lab, itself, we had to act prudently in closing it because we were not able to obtain the industry support we required to go forward with it, quite frankly. And what I mean by that is not government funding. It had nothing to do with government funding. It had to do with the tech industry - the significant players in the community - having the resources to step up to the plate and support the initiative by providing the decision-makers and resources necessary to help our SMEs grow," Pearson tells Canadian NEW MEDIA. "If you think in terms of a mini-commercialization centre, you think in terms of what’s really important for entrepreneurs, they need to get in front of decision-makers of major corporations. But, you know, it doesn’t matter what size of business today. They’ve all retrenched. They’re all focused on driving their business. So, as much as the industry was still very, very supportive of what we were trying to do, they couldn’t give us the support that we needed to ensure the success of the project." Pearson says the penalty associated with breaking the lease will be recouped by landlord York Heritage Properties with assets seized from the property and won’t be borne by CATA. She says the landlord has been understanding of the STTA’s position and is working with the association’s sub-tenants to find them space in the area and strike new month-to-month leases with them. Several calls placed by Canadian NEW MEDIA to York Heritage went unreturned. "The decision was made to vacate the space. The first thing that we had to do, of course, was advise the landlord. We advised the landlord. The next step is to advise your tenants. I didn’t have an opportunity to advise the tenants before the landlord advised the tenants. But, I think on the positive side of this, we met with the landlord immediately and contacted the tenants as soon as I learned that the landlord had done so. We are working with the landlord and the tenants to establish alternative space and we’ve been successful in that…The question to all tenants was, ‘is it your desire to remain in the area?’ And if their answer was yes, then working with the landlord and the tenant to ensure the tenant is receiving the same types of benefits that they were receiving being at 74 Fraser." Pearson adds that of the $275,000 granted the organization from the Ministry of Enterprise, Opportunity and Innovation, an undisclosed amount is being repaid under terms agreed to during discussions with government officials (CNM, Feb. 7/03). The group was awarded the cash from the Interactive Digital Media Small Business Growth Fund to support the interactive digital media program, particularly to accelerate the building of a new innovation lab and its technical infrastructure. Money was also to be used to run technical workshops and education seminars, and assist peer-to-peer networking. As for whether there is anything to show for the money spent on the Innovation Lab to date, Pearson is blunt."I think that there are lessons learned from this and the question would be, did we deliver anything? Well, the answer is no. I think we have to look at this from the other side and say, instead of going blindly along in continuing to spend money, we stopped the project. We acted prudently." Questions are now front and centre about the role Toronto’s digital media content industry will play in the much larger CATAAlliance. While gaining a toehold in the Greater Toronto Area (GTA) is a crucial victory for CATA, new media players aren’t sure the national lobby group can represent their most pressing issues. Says one veteran content producer, Pangaea New Media’s Tony Tobias: "Watching the amount of money that rolled into Liberty Village and then segued into SMART Toronto and all of the various stakeholders in the sense of the City of Toronto’s component, and the technology sector - all of those watching this and then seeing this thing after all the years of SMART Toronto having promoted itself as a leader and as a point, it’s sad. Look at the waste of money. The thing is, if you ask yourself, what if in the past five, six, seven years, it didn’t have SMART Toronto in it, would it have made a difference? I don’t mind giving credit where credit is due - if in fact we saw some advancement, if we saw some real differences made now, and then they folded their tent. I really don’t see much difference with regard to the way we’ve been thinking. If anything, it’s been a battle to try to carve off we the interactive media producers’ role as regard to producing content." SMART Toronto has faced difficult questions since it absorbed the Liberty Village New Media Centre just as that organization was about to run out of government money last year (CNM, Nov. 14/02). Since then, an extensive Liberty Village board has become a much smaller advisory board to SMART’s Innovation Lab. Under the new CATA structure, it’s not known if any of the remaining members will join those SMART directors invited to join the CATA board. "There will be directors from the board of SMART Toronto that will now serve on an advisory committee that will ensure that, of course, the voice and the initiatives that are unique to the Toronto tech community are carried forward to the CATA board," Pearson explains. "We’ll have an advisory committee and then from that advisory committee we will have four to six directors who will sit on the CATA national board. And all of this is working toward CATA’s new business plan. We’re the first regional office for CATA and they are working very hard with us to make sure that this is done right and that the needs of the individual region - being the GTA - are serviced." While producers with whom CNM spoke aren’t convinced SMART Toronto can represent their interests, Pearson says that the organization will be a good partner to content-focused groups such as the New Media Business Alliance. She attended a recent meeting of Toronto-area producers gathered to discuss recent cuts to the Bell Broadcast and New Media Fund and says CATA can help bring a strong voice in Ottawa to the table. "There are other organizations that are providing the training and networking opportunities that the sector is supporting. The good work that NMBA is doing (for instance). We’re not out there to duplicate that…What we can bring is the strength and the knowledge and the ability to drive through to government the key messages and the key issues. I think that’s good news. I don’t think that this sector is losing anything." Many observers with whom CNM spoke, however, are left with misgivings about the merger given the secrecy surrounding the closing of the association’s facilities. In the days following the closure, tenants, members and other stakeholders were in the dark about why the facility had been shut down and how the merger with CATA was being structured. The future of OnTarget - a new media education initiative partly owned by SMART Toronto - is still up in the air, for example. Julian Wharton, who was the interim executive director of Liberty Village when it was acquired by SMART, says the perceived secrecy has turned off many in Toronto’s content sector. "You can’t burn bridges because this is a small community. There is only one bridge…That to me is the most disturbing thing - the lack of information."

STTA under fire for rapid closure of Innovation Lab, merger with CATAAlliance

Broadcast | August 28, 2003

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