Costing the multiplex

If the city plans it right, a new mutliplex would cost the same amount of money to operate as the Fort William Gardens, said the city’s manager.

Tim Commisso will present city council with preliminary funding and business model options for the proposed 6,500 seat arena and 50,000 square foot convention centre. The report will also recommend applying to the federal Build Canada public-private-partnership – or P3 – fund, which has a June 30 deadline.

The $1.2 billion fund will pay up to 25 per cent of public-private projects like the proposed multiplex. Commisso said getting senior levels of government on board is key.
"We’re starting to look at how this project potentially could be supported by the federal and provincial levels," Commisso said.

Finding the right business model is also key. Similar projects cost municipalities anywhere from $300,000 to $2 million per year to run depending on how the sites are managed.

Commisso said he believes if the right model is found, the city would pay up to $600,000 or about what it costs to operate the Fort William Gardens.

With a 40-date anchor tenant, Commisso said early estimates show $5million in revenue with a $3.5 milllion operating cost, but he cautioned that those numbers are preliminary.

"We’re still dealing with a lot of estimates a lot of assumptions," Commisso said.
Private partnerships with meaningful involvement are also necessary to get the federal funding. That would come in the form of design, finance, operations or building the facility.

Commisso added that he thinks the city could find $15 million from the private sector beyond naming rights, which could net millions more.

"At this point right now somewhere in the range of 10 to 15 per cent we think is reasonable from the private sector," Commisso said.

"The key to this project really is the extent to which the project can be built or constructed without debt or minimizing debt."

Mayor Keith Hobbs agreed.

"We’re not going into debt to do this I’ll tell you right now," Hobbs said. "That’s at least my spin on it. We’re not going into debt to do this but I think it’s very important for Thunder Bay as a community to have a legacy like this."

Hobbs hopes members of the public tell the city what it wants during two public meetings on Wednesday, June 1 and Thursday, June 2.

"It’s not something that we’re going to rush into," he said. "I’m already hearing that we’re not going to consult the public well it’s out there so I’m inviting the citizens of Thunder Bay to come out in numbers, mass numbers. Tell us what you want. Tell us how you want it to look, how big you want it, where you want it how much you want us to spend."

Commisso said if funding was approved, it would take at least four years for the project to be completed.