By Dominic Abassi

Events centres in B.C.: annual costs weighed against community benefits

Feb 15, 2017 | 4:29 PM

NANAIMO — As Nanaimo ponders its own $80 million events centre, NanaimoNewsNOW looked at how similar venues in B.C. are performing and what kind of impact they have had on their communities.

The South Okanagan Events Centre (SOEC) in Penticton opened in 2008, with a construction cost of $56 million. The rink itself seats 4,700 for hockey and 6,400 for concerts and is part of a 95,000 sq. ft. complex featuring a trade and convention centre and an older arena.

The rink venue plays host to an average of 65 to 80 ticketed events per year, according to Dean Clarke, the complex’s general manager.

“What’s critical is, is there a proposed tenant for this facility? Is that tenant going to make your city better?” Clarke said. “When I’ve been in these situations and I have seen a proposed hockey team coming to a city, these are once in a generation opportunities and lots of times they’re not taken advantage of.”

The BCHL’s Penticton Vees anchor the SOEC. A perennial powerhouse in the league, the Vees average 2,900 fans over their 25 home game so far this season.

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Clarke said the entire complex, including the convention centre, receives an operating subsidy of about $1.2 million annually from the municipality. That compares with more than $50 million in economic impact and a huge benefit to the “community and quality of life,” Clarke said.

He said a big factor in the overall success of the SOEC is having one management company, Spectra Venue Management for which Clarke is a regional VP, oversee operations of the entire complex.

“To make these events centres work in tertiary communities, all the arrows have to be pointed in the right direction and there has to be a tremendous amount of support…once those financial synergies are created that’s when you really start to see a very excellent economic benefit returned to the community.

“If you have to pay a million dollars for a convention centre and a million dollars for an arena, it starts to get expensive,” Clarke said.

Clarke said with a WHL team and strong community support an events centre could “get itself into the black” within the first two years.

Prince George’s $21.7 million CN Centre broke ground in 1994 and features just under 6,000 seats for hockey and 7,000 for concerts.

General manager Glen Mikkelsen said they typically host between 14 and 20 events per year, outside of WHL games. The city provided an operating subsidy of $895,000 in 2016, which he described as fairly typical.

Mikkelsen said the population of their trading area is around 275,000, calling their venue a “regional centre for events in northern B.C.”

“Saying that, there is only so many entertainment dollars and families. So to be able to produce 80 to 90 events, there’s just not the economic ability for families to be able to support that many events throughout a year,” Mikkelsen said.

He said the WHL’s Prince George Cougars are “critically important” to the centre, for their budget and for the community. He said attendance numbers directly impact the bottom line of the venue.

Mikkelsen said their facility has created civic pride. “In terms of retaining people to live and work and bring up their families…to be able to have this centre that offers this type of entertainment. It makes people want to stay and live here, it’s hard to put a price tag on that. What it’s done for the confidence and character of the community I think can not be understated.”

Abbotsford’s events centre recorded a $1.24 million deficit in 2015. Langley’s mayor said in the Vancouver Sun their venue costs the township between $1 and $2 million annually. However, both of those venues run on different models to what is being proposed in Nanaimo.

As for the harbour city’s proposal, chief financial officer Victor Mema said a business model has been developed that “ensures the chances of a public subsidy are remote.”

He said a “worse case scenario” is a subsidy of $200,000 per year. A ticket surcharge of 9.5 per cent is designed to fill a reserve fund to off-set any potential operation shortfalls, Mema said.

“What you have in the financing plan as it sits now is enough of a buffer that if everything went wrong and this thing required a subsidy in excess of $500,000 to $1 million, that in itself is covered by the revenue stabilization fund.”

A consultant report estimated Nanaimo’s events centre would host between 80 and 130 events per year over its first three years. That is based on having a WHL team as the anchor tenant.

Mema said the business plan for Nanaimo’s proposed project, which has until this point been held under wraps, will be released “shortly.”

dominic.abassi@jpbg.ca

On Twitter: @domabassi