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RFD- 3468 Business Items   Item #   10. b.    
Regular Council Meeting Agenda
Meeting Date: 01/14/2019  
Title:    Proposed Arena Complex - Business Case Analysis - Walker
Department: Economic & Business Development  
Strategic Vision Element: This topic relates to all three of the City’s strategic vision elements contained in Council’s Strategic Plan Related Goal: High quality leisure, recreational, commercial and social infrastructure and amenities as well as policies that meet the interests and needs of the greater community are in place and conveniently accessible.

Request for Decision Summary
City Council approved a terms of reference for an Arena Business Case Analysis on May 14, 2018 which included a review of three options for the facility that vary in scope and functional design and have different price points.  The Report is now completed and the results are being presented to Council.   
Proposed Motion
That the Proposed Arena Complex Business Case Analysis presented by Sierra Planning be accepted as information.  

The City started a process in 2014 to look at the feasibility of constructing a Sport and Event Centre as an anchor project for creating a destination centre as part of the Westwind development.  The concept was to take the twin arena project in the City’s long-term capital plan and consider whether it made sense to add event hosting capacity to one of the arenas. 
The City received a $255,000 grant on March 19, 2018 from the Alberta Government as an approved application under the Coal Community Transition Fund.  The application was to review the feasibility of constructing and operating a mid-sized regional Event Centre in Spruce Grove.  The proposed event centre would create a regional destination facility intended to retain and attract events that could not otherwise be hosted in Spruce Grove or the Parkland region. 
City Council approved a terms of reference for the study on May 14, 2018 which included a review of three options for the facility that vary in scope and functional design and have different price points.  All three options are variations on a twin pad arena with different functional elements included.  As such, they represent different configurations of community needs and economic benefits.  

 Contract Award
The contract for the study was awarded on June 8, 2018 to a team led by Sierra Planning Ltd. for $162,500 plus disbursements.  A new architectural group, Perkins & Will, was brought into the process to specifically review the functional design of the facility and consider opportunities to expand the multi-purpose opportunities.  The intent was to step back and take a fresh look at the facility and introduce some new thinking on the design of public spaces.  The lead architect, Don Dethlefs, has been involved in the design and renovation of more than 50 arena and entertainment venues across North America and is recognized as an industry leader in arena design and functionality.     
There are four criteria that have been incorporated into the approach intended to deliver a report that can be used by Council to make an informed decision:
the 3 design options will be based on different functional elements and will be compared in terms of cost and what they can deliver in benefits;    
  • the functional design will consider opportunities for greater community multi-use of the facility;
  • the financial plan should be well-defined and remove potential sources that are more speculative or outside the City’s control; and
  • the footprint should be integrated with the proposed transit park and ride facility. 
Presentation to Council
The consulting team will present the results of the Business Case analysis to Council on January 14, 2019.  The presenters will be Jon Hack with Sierra Planning, Rick Kozuback of International Coliseums Company and Don Dethlefs with Perkins & Will.  The presentation will cover the following items: 
  • Scope and Needs Analysis – includes evaluation of community needs, (e.g., Regional Indoor Recreation Facilities Study, Spruce Grove Minor Hockey submission, Economic Development Strategy and Action Plan, Cultural Master Plan) and commercial market opportunities.
  • Functional Design – the focus has been to find design efficiencies to reduce the size and footprint of the facility, and consider opportunities for more flexible use of the space to accommodate a broader range of community needs.  
  • Financial Performance – the costs and benefits of each of the 3 options including capital and operating costs.  This has required ongoing discussions with the Spruce Grove Saints ownership on their involvement in the facility and with the One Properties/Beaverbrook JV on land transfer costs and assessment uplift.  
  • Funding Analysis - recommended plan for funding the construction and operation of the facility.  

The three options considered as part of the study are:
  • A twin pad arena facility with total seating of 500 seats per pad plus mezzanine viewing; dressing rooms; some break-out rooms and concession opportunities. 
  • A twin pad arena with expanded seating up to 2,500 seats for one pad; 500 seats for the 2nd pad; dressing rooms; some break-out rooms and suites; and expanded concession opportunities.
  •  A full event centre based on two pads with seating up to 3,500 for one pad; 500 seats for the 2nd pad; full event hosting infrastructure; dressing rooms; break-out rooms and suites;  possible cultural spaces; and expanded hospitality services.
Next Steps

Following the report presentation to Council on January 14th, the following steps are recommended in moving toward a final decision along with some tentative timelines: 
  1. Presentation of Project Options to Council – January 14, 2019. Report accepted as information.
  2.  Report by Administration to Council on recommended next steps and public consultation process – January 28, 2019.  Approval to proceed with recommended next steps.
  3.  Meetings with Stony Plain Council and Parkland Council to review project and invite participation in the community components – February 2019.
  4.  Presentation to Council by Spruce Grove Saints ownership and One Properties/Beaverbrook - February 2019.
  5.  Field Tour by Council of Similar Facilities in 3 Other Communities (requires 2 days) – February/March 2019.
  6.  Undertake Public Consultation Process including information sessions, public forums, website and targeted stakeholder meetings.  Start by early March 2019 and Complete by April 30, 2019.
  7.  Report to Council (COW) on Results of Public Consultations and Updated Project Information – May 13, 2019. 
  8.  Decision by Council on Project Options and Direction to Proceed – June 2019. 
Assuming that Council makes a decision to proceed with one of the options by June 2019, this would be followed by detailed design and engineering, selection of a general contractor and negotiations with One Properties for servicing of the site and the extension of Westwind Drive.  Construction would begin by May 2020 and completion of the complex by September 2021.  

The three arena options each entail a different configuration of costs and benefits.  These are presented in the Business Case Analysis including the broader economic impacts in terms of property assessment values, employment and income effects for the Westwind Centre development and Spruce Grove.  A funding strategy is also presented which includes a sensitivity analysis of key variables.  

The 2019-2021 Corporate Plan and Long-term Capital Plan identifies total project funding of $55.55 million with $4 million approved for 2019.  Funding is made up of $23.55 million in MSI grants, $15 million in Partners/Other Grants and $17 million in debt financing.  The funding plan proposed in the Business Case Analysis for the Arena Complex options recommends a different configuration.  
Event Centre Arena Complex Report

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