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UPDATE: Management changes looming at Abbotsford arena

Management staff changes looming at Abbotsford arena.  - File photo
Management staff changes looming at Abbotsford arena.
— image credit: File photo

Days after the announcement that the Abbotsford Heat will be leaving the city – for a $5.5-million contract payout – more changes are in the works for the former Abbotsford Entertainment and Sports Centre (AESC).

Sources indicate the facility’s operating company, Global Spectrum, will move its American staff back to the U.S.

Both general manager Jason Blumenfeld and assistant general manager Jacque Holowaty are from the States.

Dean Clarke, regional vice-president for the Philadelphia-based company, said that as the company looks for ways to cut costs, the “repatriation of Americans is certainly an option and will save us some of our indirect costs.”

At a Tuesday press conference, Mayor Bruce Banman announced the city will pay the Calgary Flames $5.5 million to terminate the remaining five years of a 10-year supply fee agreement, signed in 2009 to bring the Flames’ AHL-affiliate to Abbotsford.

He also said the AESC will now be called the Abbotsford Centre, and the management agreement with Global Spectrum will be renegotiated.

Global is five years into a 10-year deal with the city.

Abbotsford city manager George Murray said negotiations are ongoing and are expected to be completed in July.

Currently, there are few details as to what the new deal with Global Spectrum will entail.

Murray said the city is looking to “be a true partner in the operation of the centre, where financial risks and rewards will be shared (with Global Spectrum).”

Clarke acknowledged that the city has new priorities and strategies.

“We’re supporting what the city wants to do. We want to be there, we want to be seen as a community partner, and we’re trying to achieve a dynamic agreement that helps us generate more revenue and reduce costs.”

The deal with the Heat cost taxpayers about $12.7 million over the past five years, including the $5.5-million buyout.

In addition to those costs, the arena has run a deficit of about $2 million each year since it was built in 2009, with the 2013 subsidy estimated at $2.3 million, including staffing costs.

Murray said most recreation facilities don’t make money, such as the Abbotsford Recreation Centre and the Matsqui Recreation Centre, and the Abbotsford Centre will likely be the same.

The $2 million annual deficit is expected to be lower in the future, as Murray said, “our expectation is that we are going to run a world-class facility at the least cost to the ratepayer.”

He said lowering the arena’s shortfall will involve increased community access, such as hockey and skating events, and more streamlined operations at Global Spectrum.

Murray said there is currently high demand for recreation space in Abbotsford and the city currently buys ice time from Centre Ice, a private facility.

The city is also still paying down the debt incurred to build the facility – approximately $4 million annually, including loan interest and principal. Those payments will continue for 20 more years.

Clarke said that with the anchor tenant gone – and currently no new hockey team lined up for the facility – the arena may be quieter, but he does not anticipate it will lead to an additional loss in revenue for the facility.

Global Spectrum is a subsidiary of the international sports and entertainment firm Comcast-Spectator, and is Canada’s largest facility management company.

 

AESC Timeline

2006

  • Council votes to send Plan A initiative to referendum to approve borrowing of $85 million for three civic projects, including The Reach Gallery Museum, an expansion to the Abbotsford Recreation Centre, and a 7,000-seat spectator arena, accounting for $66 million of the loan.
  • Voter turnout for the referendum is 24 per cent, with 55 per cent in favour.

2007

  • Construction contract for proposed new facility awarded to PCL Contractors Westcoast Inc. , the sole bidder after others withdraw.
  • Underground solvent spill discovered on arena land. Clean-up is $1.8 million.
  • City announces arena property cost more than expected, $10 million instead of $8 million, including tenant relocation cost.
  • Total cost of Plan A projects set at $108 million.

2008

  • Official ground-breaking on the AESC – construction begins.

2009

  • City signs a 10-year facility operations agreement with Global Spectrum, at a base rate of $150,000 per year.
  • City signs a 10-year deal with Calgary Flames’ AHL affiliate team. Agreeement guarantees team $5.7 million annual break-even revenue to play in the AESC.
  • Final cost of Plan A put at $115 million, including AESC.

2009 to 2014

  • Arena attracts a variety of top perfomers and shows, including Kiss, Carrie Underwood and Cirque du Soleil, a number of which were sell-outs.

2014

  • City of Abbotsford renames the building to Abbotsford Centre and announces plan to pursue naming rights and new strategies.

 

Annual costs

  • Approximately $2 million to cover arena deficit
  • About $4 million to pay debt principal ($1.5 million) and interest ($2.5 million) for 25-year loan

 

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