The city plans to jointly manage Co-op Place and the Esplanade Theatre but a report shows the new arena has not met expectations for revenue over the past six years.--NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
City Hall has released a report on how it plans to jointly manage Co-op Place and the Esplanade Theatre as major entertainment venues in Medicine Hat, but information also reveals how the hockey rink has failed to meet expectations over the past six years.
Operations during the past two years – when it was managed by the city, rather than a private operator – were hamstrung by the pandemic, it states.
Health measures limited crowds, and uncertainty kept concert acts off the road, but portions of the report state revenues predicted when the rink was built in 2015 failed to materialize.
Leah Prestayko, manager of the community development department, which now manages the rink and Esplanade Theatre, made the presentation.
“The decision (to take over management) was made in response the COVID-19 restrictions,” she said, reading from presentation highlights.
“Challenges related to market support and attendance were occurring prior to the pandemic … that underscored the need to examine the cost structure and sustainability.
“The path forward for the foreseeable future at that time (in early 2020) was to significantly reduce the number of entertainment events at the venue, reduce capacity and overhead, and concentrate on the main tenant.”
The city is now resetting how many events it predicts will be held as the economy recovers from the pandemic, will staff and promote the facility in tandem with the Esplanade and schedule events between the two depending on size, said Prestayko.
Combined the two facilities require $3 million in taxpayer support (the difference between revenue and expenses, including non-event costs at the arts centre), but administrators say they have reduced that by 10 per cent in the short term by streamlining the two venues’ operations.
Members of the public services committee who heard the report supported the move to seek cost savings from a single ticketing system (Tixx.ca), and sharing staff and promotional efforts.
“It (city management) is my preference,” said Coun. Alison Van Dyke, one of seven councillors elected to a first-term last October.
“Some assumptions were made (in 2015),” said committee chair Ramona Robins. “I’d like to see this sort of report come back to committee more often.”
Department level management reports are done monthly and flow through council’s audit committee every four months, though only an overview by division is made publicly available.
Monday’s report revealed that the Event Centre lost $780,000 in its first full year of operation in 2016, while the Medicine Hat Arena lost about $300,000 in 2015. That older facility was used as a benchmark to approve the new build, with council members and administrators promising better results in a modern building.
The report cites the reason as fewer events with smaller crowds than first predicted at the facility, which has 5,500 seats for hockey and up to 7,000 for concerts.
A poor economy and fewer major touring acts are also blamed for losses that worsened each year, rising to $1.28 million in 2019. The management proposal by SMG Global (later known as ASM Management) predicted a $37,000 loss in the fourth full year, essentially predicting a break-even year.
That is a lofty expectation in the sector of major sports venues in smaller Canadian centres.
The report also details operational losses between $1.2 million and $1.7 million per year at the Enmax Centre in Lethbridge, a $600,000 annual loss at the Swift Current i-Plex and a $1.2 million loss at the Moose Jaw’s Mosaic Place.
“Regardless of the model, these facilities are typically tax supported,” said Prestayko.
Figures specific to Co-op Place were not broken out for 2020 and 2021, but combined Esplanade and Co-op Place results show the combined loss was nearly $4.5 million in 2020, then $2.7 million in 2021 as business conditions improved.
Those include non-theatre operations at the Esplanade, including museum, art gallery, archives and instructional offerings, such as art classes and day camps for children.
The net loss is predicted to rise again to $3.7 million this year as costs of operating return to normal.
