Fans cheer on the Medicine Hat Tigers at Co-op Place in a December game. The city is adding to the operating budget for the arena as well as the Esplanade but says going alone is still a money saver.--NEWS FILE PHOTO
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The city will add $263,000 to the budget to run Co-op Place and the Esplanade as a joint unit, but administrators say the whole budget is still less costly and better focused than bringing in a private-sector contract to manage the venues.
The large spectator arena opened in the fall of 2015 under the management of SMG Global to operate the building and book entertainment.
After several years of increasing shortfalls however, the two sides parted ways at the start of the COVID-19 pandemic in 2020, and the city took over operations.
Now, the building is seeing more fans and requires staff to build on the recovering operations at the facilities, said city managers.
“We re-examined how the facility would be operated and reorganized resources between Co-Op Place and the Esplanade … to better co-ordinate between the facilities, become more attractive to promotors and offer additional programming,” said Leah Prestayko, the city’s manager of community development, which oversees operations now.
She said a review of the changes show city management has shrunk losses, compared to contracting it, her office is doing a good job and in general, use of the facilities is growing.
That’s occurring without paying management contracts to a third-party contractor.
Financial results or the 2022-23 operating season at the rink show that combined with the Esplanade Theatre, expenses totalled $11.2 million against revenue of $7.2 million.
That shortfall of close to $4 million, including non-revenue generating units like the city archives, is $444,000 less than the 2019 operating year when adjusted for inflation.
Public services committee chair Coun. Ramona Robins said improving financial results should be supported, and the plan doesn’t add fees for patrons.
The added costs are also lower than the difference in the operating margin, she said.
“We’ll have improvements to service levels, but this isn’t an overreach,” she said.
Coun. Andy McGrogan voted against the change, along with Coun. Shila Sharps.
“I’ve never been fond of a city getting into business,” she said, while McGrogan and others expressed concern the amendment was coming after a general set of budget amendments was dealt with in December.
A new two-year budget will go to a vote later this year.
“I wonder if it’s early, I’d like to see how the hockey season winds up and maybe have it in our 2025 budget,” said McGrogan.
Coun. Robert Dumanowski said budget amendments after one month “pained him.”
“But I’ll support this because I believe that we’re on the right track and trying to do as god a job as possible,” he said.
According to figures presented to committee in December, total attendance at the building peaked in the 2016 financial year at 260,00 visits, but declined to about 230,000 in the final “pre-pandemic year” in 2019.
This past year, cumulative attendance sat at 216,000 at Nov. 30, and was expected to set a new high mark despite fewer concerts and non-hockey events than under third-party managers.
It did benefit from the addition of several WHL playoff games and a large religious convention, which will again be hosted in 2024.
Prestayko said the department was being more selective about offerings and that led to better response from the ticket buying public.
In total 2.5 full-time positions would be created, bringing the total to 9.5 positions in a variety of full- and part-time roles, including additional hours for arts programming.
The plan would add a box-office “specialist” and back up part-time positions to support kitchen and concession co-ordinators.
That staff co-ordinates 170 non-permanent night staff and volunteers.
“We have millions of dollars of food and beverage revenue, and ticket sales, and we’re trying to protect that,” said public services division head Brian Stauth.
One manager oversees 170 casual staff in food and beverage, including 70 alone on game nights.
Stauth also said any new contract operator would likely require some financial guarantees.
The city’s contract with SMG included that the city cover any losses by the company, later named ASM. Those payments grew from $780,000 early on to nearly $1.3 million per year near the end of the relationship, said Prestayko.
