Peterborough memorial Centre renovation

[Bandit]

Bigger, brighter and buzzing with energy, the new-look Memorial Centre had its coming out party Thursday night.

Nov 1, 2003. The Peterborough Examiner

Welcome to the 21st century.

At $11.9 million and counting the makeover wasn't *****, but it was necessary. And while a variety of unfinished final touches dulled the full effect somewhat, Peterborough clearly has a spectacular new upgrade to its most prominent public building.

Seeing what has been accomplished is also a reminder of how shoddy the arena had become and where it was headed.

Long-time Peterborough Petes director Pat Casey was at Thursday's unveiling. Casey recalled that when the building first opened in 1956 it was, next to Maple Leaf Gardens, the most modern, spacious arena in Ontario.

Forty-seven years later the fabled Gardens is about to become a super-sized grocery store. Never fully updated, time and the demands of sports fans and concert-goers passed it by.

But Maple Leaf Gardens was privately owned. Its investors decided it wasn't worth saving and built the new Air Canada Centre, history and sentiment be damned.

The Memorial Centre belongs to Peterborough. People paid for it out of their own pockets as a permanent memorial to local citizens who fought and died for their country. Tearing it down would have been difficult. Replacing it at a cost of $25 to $30 million would have been a stretch.

But something had to be done. The seats were uncomfortably small and couldn't match the sight lines of modern buildings, the washrooms and dressing rooms were outdated, without air conditioning the building was vacant for most of the summer, the old stage was wasted space and most of the physical plant needed replacing.

Rather than try to finance a new building, which many larger Major Junior hockey cities have done, the city compromised on a complete renovation.

Based on what fans saw Thursday night, the final effect will be hardly any compromise at all. Buying a ticket to a sporting event, concert, trade show or festival at the Memorial Centre won't mean missing out on the comforts people expect in brand new facilities.

There are second-floor washrooms and concession stands. Club seats offer a higher level of comfort for those willing to pay for it, and private boxes up the level even higher. The lobby is bigger and brighter, food and beverage offerings will be more varied and easier to get to and there is, or soon will be, a full restaurant.

Also, there is every reason to expect the improvements will generate more events, higher ticket sales and extra revenue. If the projections of a consulting firm that recommended the renovation are met, the Memorial Centre will cover its financing costs and within five or six years be showing a profit instead of costing the community $160,000 a year. Time will tell.

That's not to say everything is perfect. Work is well behind schedule and overtime has been racked up in the rush to meet two previously announced, then delayed, opening dates. There will be extra costs and it will be important to know who was responsible for the delays, the city or the contractor. The new city council elected Nov. 10 should make sorting that situation out one of its first priorities.

Those concerns should be taken care of, but should not detract from the overall project. For less than half of what it could have paid, Peterborough has an impressive "new" Memorial Centre. Congratulations to everyone who helped make it

Copyright The Peterborough Examiner 2003)


The renovated Memorial Centre will likely operate at a deficit despite earlier profit projections, two mayoral candidates said.

At a mayoral debate Wednesday, both Paul Ayotte and Doug Peacock raised concerns about the arena's operating projections and whether they can be met.

Ayotte said the arena will run a deficit, but added it is important to the city and should be supported.

"I expect that both the Memorial Centre and the Wellness Centre will run a deficit but they're important to our community," he said. "I had concerns about it all along. We're going to have to be aggressive to meet those goals."

Ayotte said both facilities contribute to the city's quality of life and pay for themselves in other ways. He also said having air conditioning in the arena will mean more events can be staged there in the summer.

Peacock said the arena's profit projections were based on the assumption that patrons would spend more money on concessions. Since the Shoeless Joe's restaurant has yet to open, Peacock said revenue targets will be hard to achieve.

"I'd be pleasantly surprised if we hit those targets," he said. "The whole Memorial Centre issue has to be looked at more openly."

Peacock said, if elected mayor, he would like to create a new Memorial Centre committee, including business owners, to look at ways to make its operation more profitable.

According to projections, the Memorial Centre's renovations will make the arena profitable in the coming years. This projected operating profit is meant to pay off the debentures the city used to finance its portion of the $11.9-million renovation costs as well as the interest on those debentures.

A report presented to council last year stated a renovated Memorial Centre would net $82,545 in its first year of operation, after more than $1 million in debt repayments.

Town Ward Coun. Bill Juby, who oversaw the Memorial Centre renovation project for council, admitted the projections were always seen as "optimistic" but said even if the arena doesn't reach its projected revenue goals, it will still be affordable for taxpayers.

"It will be the most affordable debenture the city has," he said.

Juby said 17 of the arena's 24 private suites have been leased. He said he wasn't sure when Shoeless Joe's would be ready to take over concessions or when its restaurant will be finished
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Could Memorial Centre be sold?: City assets sale to balance budget not ruled out:[Final Edition]
JoElle Kovach. Peterborough Examiner. Peterborough, Ont.: Dec 8, 2003.

Tax dollars could be so tight next year that the city's finance chairman hasn't ruled out selling the Memorial Centre or Fairhaven.

During a review of the city's finances at the Otonabee Inn, Saturday, councillors saw a list of about $6.6 million in new expenses they could face when they set a budget, next spring.

Unless they can trim those expenses - which include hiring new police officers and replacing old buses - council will have to dig further into taxpayers' pockets.

City finance manager Sandra Clancy said increasing tax rates by one per cent raises about $630,000 for the city.

But Coun. Paul Rexe, the city's finance chairman, didn't suggest a tax hike.

He asked city staff whether council could sell the Memorial Centre.

He also asked whether the city could sell its share of Fairhaven Home for the Aged. (It belongs both to the city and to the County of Peterborough.)

There's nothing to prevent the sale of the Memorial Centre, said city administrator Ron Chittick. "Except that it's a war memorial," he added.

As for Fairhaven, he wasn't sure.

Councillors did not debate the notions - it was a brainstorming session.

"We're here to throw out ideas," said Mayor Sylvia Sutherland.

Yet she bristled when Rexe asked about selling the arena.

It was built largely with money donated from local companies such as General Electric and Quaker, she said.

Coun. Bill Juby, chairman of the renovations committee, did not mince words when asked about selling the Memorial Centre.

"I think it's the dumbest idea I've ever heard," he said.

City finance director Brian Horton would not say how much the possible shortfall could increase tax rates.

"What it means to the average taxpayer - well, it's too early to tell at this point," he said.

On Jan. 19, Rexe is expected to tell councillors how big of a tax increase to set - if any - as a target.

...

[macphail]

Examiner Staff
Wednesday, February 25, 2004

Editorials - Creating a committee to look into the financial situation at the Memorial Centre won’t do anything to answer public concerns about how much the newly renovated arena is going to cost taxpayers.

A report on the final construction cost and the operating deficit for the past year, on the other hand, would be exactly what people are looking for.

If Coun Bill Juby’s new arenas committee can speed up release of that report it will have served an immediate purpose. And since a preliminary estimate that the centre will be $400,000 in the red on its operating cost for the past year has already been released, getting final details together should be a fairly quick task.

Separate from the operating deficit will be a final accounting of construction costs for what was budgeted as an $11.9 million renovation (including a $1-million overrun). Former community services director Bob Browne had repeatedly said the $11.9 million figure would be met. But he also said talks with the contractor about who would pay overtime costs after the project went four months past its scheduled completion date were not settled. Unfortunately, Browne’s firing two weeks ago has added another layer of intrigue to the Memorial Centre story. The city has refused to say why Browne was let go. And while there is no reason to assume it had anything to do with the Memorial Centre, the timing of his departure – a month after Browne was made interim arena manager and days after he released the $400,000 deficit estimate – has fueled rumours.

While personnel matters are touchy and the privacy rights of former employees have to be considered, the city should clear the air by making a general statement of the reason for Browne’s dismissal; in particular, whether it was related to the Memorial Centre.

But regardless of how that situation plays out, a quick and complete report on the arena’s finances is necessary.

Of the two cost items – a final construction bill and the operating deficit – the operating side should draw the most attention. Any overrun on the renovations will be a one-time concern that will have to be dealt with immediately; trouble on the operating side could be a drain on taxpayers for years to come.

Some preliminary attempts to lay blame have already begun. Coun. Paul Rexe has said the previous council, of which he was not a member, is partly responsible because it agreed to go ahead with the project even though some stated conditions were not met. Coun. Juby, who chaired the arena building committee and is most closely identified with the project, now says a professional consultants’ revenue forecast “painted a pretty rosy picture.”

That has turned out to be true – although Juby wasn’t saying it when he was pushing for support for the renovation – but is the consultant to blame?

Stadium Consultants International (SCI) gave the city detailed cost and revenue figures which demonstrated how a renovated arena could generate enough cash to cover $1 million in annual financing costs while also cutting the operating deficit by $83,000 in the first full year, and producing a profit by the 10th year.

However, few of those projections have been met. The food concession contract falls $110,000 short and private box sales are about $70,000 off. Annual income from naming rights, soft drink and alcohol rights and in-rink advertising may also fail to meet targets.

But those “rosy” numbers were tied to explicit advice that a new, entrepreneurial approach to operating the arena was necessary. That should have meant hiring – or contracting out for – a manager with experience at bringing in events, selling advertising and attracting corporate sponsors. It didn’t happen, a mistake that must now be corrected.

As for the estimated $400,000 operating deficit for the past year, Coun. Juby is right when he says performance can’t necessarily be measured on a year when the arena was closed for seven months and a new restaurant opened four months late.

What is needed now is the financial figures that will show whether it really was just an unusual year. Those must include a breakdown of all payments and receipts. Juby’s committee must press to get them out as quickly as possible to the people who pay the bills, the taxpayers. It must also commit to releasing quarterly updates so people will know if any problems are being fixed, or they have taken on the care and feeding of a white elephant.

[Bandit]

City may be on hook for arena OT


By MICHAEL HAMMOND

Thursday, March 11, 2004 - 08:00

Local News - City residents may foot the bill for overtime costs from renovation delays at the Memorial Centre.

Despite the city’s refusal to authorize overtime to Walter Construction Ltd. last summer, Town Coun. Bill Juby said the city and the construction firm are likely deciding who is accountable for construction delays at the arena over the last five months.

“There is a dispute on overtime,” Juby said. “That’s the type of thing there will be negotiations over.”

Juby, who was chairman of the renovations committee last year, said former city community services director Bob Browne told the contractor that no overtime costs would be authorized unless the $11.9-million arena renovation project would be completed by Oct. 2 as originally planned.

“To the best of my knowledge, no overtime was authorized by the city,” Juby said.

The final price tag of the Memorial Centre renovation is now widely expected to exceed the original $11.9-million price tag. The city’s finance chairman Paul Rexe said Tuesday he doesn’t think anyone in the city believes the project will come in on budget.

Earlier this week, two city residents blasted Juby and former city councillor Doug Peacock, also a member of the renovations committee, for hiding information from the public about problems with the project last summer.

Juby defended his role as chairman of the committee. He said he was at the arena every day last summer only as an interested observer. Since he is not an engineer or a contractor, he believed everything was proceeding normally, Juby said.

“I was told, ‘We hit some glitches, but we’ll pick it up in the end,’” he said.

Juby and the previous city council have taken heat for approving the arena project even though three stipulations set out by a city-hired consultant were not met.

Council approved the renovation project even though 65 per cent of the private boxes had not been leased. The second stipulation was that a long-term lease be signed with the Peterborough Petes. That lease was signed later in the year. Finally, council was urged to sign an agreement where the price of the renovations was set in stone, but did not follow through.

Former Northcrest councillor John Pritchard said the previous council should not be blamed for the entire mess, but said some of the criticism is justified.

Pritchard said members of the public were dismissed from the arena renovation committee early in the process once the decision was made to proceed.

“After they got rid of the private sector, the councillors were in total control,” Pritchard said. “Once they got into problems early in the summer, the committee should have said ‘We’re not going to have it finished.’”

Juby dismissed Pritchard’s assertions, saying the members of the public fulfilled their mandate when an architect was selected to come up with a renovation plan.

Pritchard was the sole councillor to vote against the renovation project because of problems he had with the timeline as well as other issues.

Former Otonabee councillor Glenn Pagett said he had problems with some of the consultant’s projections including a prediction that attendance would average 3,100. Pagett also said he was skeptical about a prediction the arena would generate nearly $333,000 in revenues in its first year.

“Everyone was anxious to get the project going,” Pagett said. “We were buying into it based on the fact that we’d recoup the costs.”

At the time, Pagett suggested council impose a penalty clause in the renovation agreement with Walter Construction. Council rejected that idea, since it was reluctant to offer a bonus clause for the arena work being finished early.

Although Pritchard is critical of the renovation committee for being secretive, he said the rest of council deserves criticism for not asking enough questions about the project.

Other members of the renovations committee included former councillors Paul Ayotte and Jeff Leal.

City officials don’t expect to have final costs available until at least this summer. The city and the contractor are involved in ongoing negotiations about the price tag.

A Memorial Centre operating budget is expected to be released in two weeks. The report is expected to show a large deficit, which is a product of construction delays and missed revenues

[Bandit]

Memorial Centre over budget


By MICHAEL HAMMOND

Wednesday, March 17, 2004 - 08:00

Local News - The Memorial Centre renovations could be $2 million over budget, depending on negotiations between the contractor and the city, but city taxpayers will be paying at least $735,000 more.

At a news conference at the Memorial Centre yesterday, the arena’s interim manager Sandra Clancy said the $11.9-million project is $735,000 over budget. An additional $1.3 million in claims have yet to be settled with the project’s general contractor Walter Construction Ltd.

The city council committee overseeing the project did not know about the cost overruns and did not authorize them, Coun. Bill Juby told the news conference.

The Examiner learned a $604,221 construction lien was placed against the arena late last week by Opec Drywall Systems Inc. That means almost $2 million is still owed to subcontractors by Walter Construction.

A lien is a notice a company can file against a construction project manager and a building owner to ensure payment. A lien forces a contractor or building owner to pay unpaid bills before a property is handed over after a project’s completion.

It has also been revealed that Shoeless Joe’s and the city never signed a contract and that only 15 private boxes have been leased, not 17 as the city had earlier announced. An agreement with Molson for exclusive alcohol pouring rights in the arena has also not been signed.

Clancy said the added expenses Walter Construction is seeking include $300,000 in overtime costs. The remainder involves construction delays over the last five months. Final work is expected to be finished in six weeks, officials said.

Clancy would not comment on the specifics of ongoing negotiations with the contractor.

“We can’t provide much more detail at this time and then have them debated in the press,” she said.

The city’s administrator Ron Chittick stressed the city is in a good position in the negotiations, saying he is “fairly confident” the city won’t be left on the hook for any more expenses. He said that in his opinion, the city is not responsible for the delays.

Two city residents lambasted the city for how it has handled the dismissal of former city community service director Bob Browne, who was in charge of the renovation project.

Mayor Sylvia Sutherland told the gathering no comments would be made about Browne’s dismissal.

Christine Jaros, one of six residents seeking the region’s federal New Democratic Party nomination, suggested that Browne was being used as a scapegoat.

“Mr. Browne has not been used as a sacrificial lamb,” Sutherland responded. “It’s very unfair to characterize Mr. Browne as the sacrificial lamb.”

Crescent Street resident Hugh McMillan also pressed the mayor on Browne’s firing.

“All we can think of is he’s carrying the can for this,” he said.

The mayor said the city won’t talk about Browne’s firing to respect his privacy. She said Browne is free to discuss his termination since he has not signed a non-disclosure agreement with the city. Browne has refused to comment.

The city also revealed yesterday that the arena’s 2003 operating deficit will be $432,000, which is $172,000 higher than initial expectations. Clancy said this deficit is the result of the cancelled David Usher concert, smaller revenue totals late in 2003 and overtime paid to Memorial Centre staff to clean the arena for events.

Last year’s operating deficit will be paid for with the city’s surplus from last year. This year’s operating budget will be released April 13, Clancy said.

The construction delays have also affected two important revenue streams for the arena, the mayor admitted yesterday.

When asked by The Examiner about the concessions contract with Shoeless Joe’s restaurant, Sutherland said no contract has been signed with restaurant owner Bob Marek. The mayor said Marek has balked at paying a $50,000 deposit to the city. Although there is a memorandum of understanding between the restaurant and city, Sutherland said the city might have to consider another caterer if Marek declines to sign a contract.

“It’s not standard fare to have a memorandum,” Sutherland said. “For a while, I thought we had a contract. I want to ensure the public we will have food services. We’ll have to look at temporary caterers if Mr. Marek doesn’t want to sign a contract.”

Marek could not be reached for comment yesterday.

Marek previously said he expected to lose about half of the projected $1.1 million in concession revenues due to construction delays. Chittick would not say how much the city expects to lose as a result of delays with the concession stands and Shoeless Joe’s arena restaurant.

“I’m not sure what percentage we’d be looking at,” he said. “It is a significant reduction.”

The arena has also suffered from slow private box sales. Juby, chairman of the city’s arenas committee, said the reason only 15 of 24 boxes are leased is local groups were reluctant to commit to the cost when construction dragged on. Some have bailed out since committing to boxes.

“We were higher than (15 boxes) at one point,” Juby said. “I think the boxes will be more attractive once the facility is fully operating.”

The city’s next large undertaking will be the $14-million Wellness Centre, a project the mayor said yesterday will be both on time and budget.

Like the Memorial Centre, there will be no bonus paid to the contractor if the work is done early, she said. Likewise, there is no penalty for finishing late.

[Bandit]

Memorial Centre deficit puzzles politicians


MICHAEL HAMMOND

Thursday, May 27, 2004 - 08:00

Local News - Although city officials insist the Memorial Centre will not break even, former city councillors say the story has changed.

A 2002 Stadium Consultants International report suggested the arena’s renovations would help generate new revenue to pay for the $11.9-million project.

Although it was assumed the renovated arena would eventually reach a point where it no longer ran an annual deficit, taxpayers will likely have to foot the bill for an annual loss, some politicians say.

Town Coun. Bill Juby, the city’s arenas committee chairman, said the 2002 report presented “a best case scenario.”

But several former councillors are surprised the arena is no longer expected to support itself over time. Renovations were approved with this goal in mind, they said.

“I think we were going to be close to a self-supporting project in the years to come,” said former Otonabee Ward Coun. Glenn Pagett.

At Tuesday’s committee of the whole meeting, the arena’s interim manager Sandra Clancy told councillors the arena would not break even. Councillors approved a near $650,000 loss this year at the arena.

The facility is expected to lose $450,146 next year and $301,401 in 2006.

Former Northcrest Ward Coun. John Pritchard, who opposed renovations, said former councillors were “pretty darn naive” to believe the arena would eventually break even.

“It was quite a job the consultant did on the rest of council when they indicated they were going to make some money,” he said. “Some put their heads in the sand.”

Pritchard and former Town Ward Coun. Margeree Edwards were both skeptical of the revenue projections.

In 2002, Edwards suggested council figure out how much it would cost to run the newly renovated arena.

“I just don’t want to go into this blind,” Edwards had said.

Reached yesterday, Edwards said too little emphasis was placed on the arena’s average $165,000 annual loss. Even with new revenues from private boxes, improved concessions and increased attendance, the arena is not able to break even, she said.

“It was always anticipated it would lose money,” she said. “But it’s far more than I would have liked to see.”

Not every former councillor agrees with that the annual losses are inevitable.

Former Ashburnham Ward Coun. Doug Peacock, a member of the arena renovations committee, said a plan was developed specifically to reach the break-even point over time.

“There was a definite plan put together that had a financial pattern ... where we would be able to break even,” he said. “That was the key reason why council supported this project.”

An update on the final cost of the renovation project is expected next month. The project is $735,000 over budget while another $1.3 million in outstanding claims have yet to be settled with the project’s head contractor, Walter Construction Ltd.