City council got its first look Monday night into how a funding might work for a proposed event centre.
David Woodman of Meyers Norris Penny presented a business/funding model assessment that recommends the city should use a public private partnership and complete a preliminary grant application to P3 Canada by June 30.
But some councillors were worried that recommendation might be moving too fast in light of two public consultation meetings on the proposed $80 million facility. Coun. Paul Pugh said although he thinks there is public support for the project, consultation is needed.
"We have gone through considerable public controversy over major projects in recent years," Coun. Paul Pugh said. "There are a lot of questions out there still I’m concerned about having a deadline one month from now."
But Woodman and city manager Tim Commisso told council that the application doesn’t mean that the project is going ahead. The preliminary process takes over a year before anything is agreed on and Commisso said council would need to give formal approval before P3 Canada would commit funding, which can be a maximum of 25 per cent of the project.
"We are in essence reserving our place. They (federal government) know and we know we have a tremendous amount of work ahead of us," Woodman said.
Woodman presented three funding options to council, with varying levels of public and private funding. The first scenario would see all public funding for the project with a debenture. Coun. Rebecca Johnson said that word is a concern for her.
"As a citizen it says a debenture and a red flag goes up" Johnson said.
But Commisso said that the report was only providing scenarios and that with a $25 million ReNew Thunder Bay commitment, minimizing debt from the taxpayer should be a priority. Along with P3 funding, another $10 million could come from provincial grants and an additional $15 million could come from the private sector.
"We’re trying to be realistic as much as we can but optimistic," Commisso said.
Coun. Andrew Foulds said he wants to make sure that a P3 project would work for Thunder Bay.
"What kind of assurances can you provide that the P3 fund, that these public private partnerships are working for citizens?" Foulds asked. "We want to make sure that we protect the citizens and make sure that they’re not holding the bag financially or environmentally."
Woodman said that P3 Canada, along with the city, province and private investors would do their due diligence.
"There will be tremendous scrutiny on the project no question," Woodman said.
The report shows, based on today’s dollar figures, that the 240,000 square foot facility, including a 50,000 sqaure foot convention centre, could generate $5 million in revenue each year with a $3.5 million operating expense. The estimated base cost of the arena is $63 million with another $11 million required for a convention centre and $6 million for site infrastructure.
Public meetings will be held June 1 at the DaVinci Centre and June 2 at the Italian Cultural Centre. Both meetings start at 6:30 p.m.
