Operating costs balloon at Co-op Place

By COLLIN GALLANT on January 27, 2021.

cgallant@medicinehatnews.com@CollinGallant

The operating costs at Co-op Place may be more than three times more than originally projected when the city approved building the major spectator rink seven years ago.

That is according to a city councillor who mentioned the facility this week while questioning the results of an effort to put another local facility under private management.

On Monday, the public services committee heard $190,000 could be saved and programming expanded under an outside operator at the Veiner Centre.

Committee member Coun. Kris Samraj said he was concerned only one finalized package was received and the savings are half of original projections when the process was launched last year.

“It only works when there is a competitive market for whatever you’re trying to privatize,” he said.

“The fact that there was only one bidder here is analogous to that there was only one bidder at Co-op Place.

“The financial performance of (Co-op Place) was terrible and it’s gotten worse every year since. It’s an analogy that occurs to me, whether it plays out like that or not,” he said.

Administrators in the city’s public service division didn’t provide figures Tuesday.

After the meeting Samraj expanded that when council approved the construction and management contract for the event centre in 2013, staff predicted operating costs would not exceed the annual deficit at the Medicine Hat Arena, or about $360,000 per year.

The public has often raised questions about the financial performance of the newer rink that saw an apparent drop in hockey crowds and has boasted relatively few full-house concerts.

It was known as the Canalta Centre until last fall, when South Country Co-op acquired the naming rights in a sponsorship deal.

Last April, the city announced it would not renew its contract with ASM Global, and would internally manage the building that had been closed the month before due to COVID.

Over the years, the facility’s financial results have been mentioned only fleetingly in city budget documents, but only blended projections for the entire parks and recreation division were ever released publicly.

When council approved the $75-million project, its use of ASM (then known as SMG Global) was hailed as a break from city practice, adding facilities without costs.

It was the only bidder and won an undisclosed five-year contract to manage the facility and book musical acts and other events through a related company.

In terms of seniors services, Samraj added that he has no reason to believe the bidder would do a bad job, but felt the case for council approval, potentially next Monday, was weakened by the results of the tender.

Though exact figures were not included, documents state that the cost savings to the city of entering a contract with Calgary-based Kerby Mission to run the centre would result in $190,000 savings over maintaining city operators.

Samraj said that comes after an initial estimate that as much as $400,000 could be saved by having a not-for-profit group run programming.