Post by Admin on Sept 24, 2015 17:23:30 GMT
By Vincent McDermott
Wednesday, September 23, 2015 4:55:48 MDT PM
Developers and the municipality showcased their plans to build an arena and parkade, with a four-star hotel attached. But with a $580 million price tag attached and no anchor tenant, the arena proved a hard sell during the municipality’s first public engagement sessions.
On Tuesday evening, ICC president Rick Kozuback and his partners argued the project would revitalize Fort McMurray’s increasingly barren downtown landscape and support the local economy.
Stretching from Franklin to MacDonald Avenues and Main to Morrison Streets, the arena could seat 6,200, although a maximum of 8,000 people could fit with temporary seating. Artist renderings featured a sunken bowl model wrapped with a sprawling glass and steel layer. Retail and restaurant spaces would remain open, even when no events are scheduled.
A neighbouring four-star hotel would be built and managed by a private company. Kozuback says the private sector investment from the hotel alone is approximately $60 million.
Partners from SMG, Northland, and Ernst & Young pitched a project built by, for and run completely by Fort McMurray, with commercial spaces run locally. Maintenance, repairs and operations would be contracted locally.
But many of the roughly 20 residents that showed up balked at the costs. Originally presented as a $406 million project, to be paid off in 40 years. With a parkade, the costs balloon to $580 million, putting council on the hook for annual payments of $14.5 million.
“What is it going to look like in 10 years if we do build this? What is it going to look like in 10 years if we don’t build this? That’s the top question,” said Kozuback.
No hockey team has been secured as an anchor tenant, although presenters said there have been talks with leagues and local businesses about securing a franchise.
“From our perspective, we think the Western Hockey League is the best option,” said Kozuback. “The next step is to put us in a position to go to a hockey league and say that we’ve got a group, how do we get a franchise? They would push us in the appropriate direction.”
The powerpoint presentation was posted online and listed business owners Andrew Boutilier, Dan Fouts and John Wilson as the “Hockey Group,” but did not present. None of those individuals own hockey teams, but Boutilier and Wilson have sat on the Oil Barons’ board of directors.
How low oil prices and a reduced Canadian dollar would impact construction was raised. Others were skeptical of the arena’s chances for success after Shell Place’s inaugural summer proved a financial flop.
Kozuback suggested the sudden availability of cheap labour created optimal construction conditions for Fort McMurray, and promoters like SMG have better connections with promoters and entertainers than the Regional Recreation Corporation.
As for cost concerns, Kozuback said council had the power to adjust the funding model, but said many districts pay off arenas over a 25 to 40 year cycle, naming Allen, Texas as an example.
"There's not many facilities I know of that would be short-term deals," he said. “It’s a matter of belief in the community. Do we believe the community will support a venue that can support quality entertainment? Only the people who live here know better than I do, and I think it will work.”
vincent.mcdermott@sunmedia.ca
