Penticton has been discussing the future of its older arenas for more than two years, as an injection of funds will eventually be needed to either repair or replace the dated buildings.
In 2017, a task force recommended that Penticton get rid of one of its older arenas, turn another into a “dry-floor, multi-use sports facility” and replace both aging rinks with a new double ice-sheet arena, a proposal that the city estimates would cost over $37.1 million.
The city got a gas tax grant of $6 million to support the arena upgrades.
But now, time is running out for Penticton to figure out how it is going to fund the rest of any arena upgrade project it decides to pursue — or give up the money.
The Union of B.C. Municipalities, which administers the grant, put a condition on the $6 million that requires Penticton to have all its funding for the arena project in place by the end of March.
This week, Penticton city council will be considering a staff recommendation that the city give back the grant.
“Although it may be difficult to give up a grant with a $6-million capital value, the due diligence for this project isn’t complete,” the city’s director of recreation and facilities, Bregje Kozak, wrote in a report to council.
“It would be irresponsible to make budgetary decisions without a detailed funding strategy that is understood and supported by the community.”
Arena issue up for debate
Indeed, the question of exactly what to do about the city’s older arenas is still an active issue up for debate at city council.
The task force recommendations to remove the ice sheet from Memorial Arena, turning it into a dry-floor fieldhouse space, get rid of McLaren Arena and build a new arena with two rinks is estimated to cost $37.1 million.
There is also the possibility of repairing the existing arenas so they can continue to be used for more than a decade — or council could do neither and come up with its own solution to the arena issue.
“One thing we know for sure is that there is significant investment required into either existing or new facilities in order to maintain current service levels going forward,” Kozak wrote.
“The challenge before us is when to invest? We can continue to provide bare minimum annual investment to ‘keep the lights on,’ knowing that, eventually, this will be unsustainable.”
Kozak went on to tell council that it also had the option to repair or replace the arenas.
“We can also plan for a more significant investment in order to extend the life of the facilities and ensure uninterrupted continuity of service levels for 10 to 20 years. Or we can take it to the fullest extent to replace existing facilities and convert Memorial Arena to a multi-use, dry-floor space, which would address the long-term needs for arenas,” Kozak wrote.
Penticton council is expected to discuss the arena options at its Tuesday meeting.
Cost-benefit analysis
A cost-benefit analysis done by a private planning company, which completed a report on the city’s arena situation, concluded that Penticton would be better off to adopt the task force recommendation rather than stick to the “status quo.”
The report concluded that while the short-term capital costs of building a new arena would be much higher, the city will eventually need to replace the aging arenas.
It also noted that if the current arenas were simply maintained, they had a far worse potential to generate extra income than a new arena and dry-floor space. The report went on to say that the economic impact of keeping the old rinks as is would be “very low and declining” compared to the “very high” economic impact of building a new arena.
Grant funding
Kozak’s report said the city applied for the $6-million grant it is now looking at returning despite the project still being “in its early stages” because of a recommendation from the arena task force.
The grant rules allowed for the funding to be used till 2024 so Kozak said the task force “felt that there would be enough time…to confirm details of the project and seek any electoral or other approvals that would be required.”
“However, the grant administrators also recognized that the arena project was in early states…they were skeptical about the city’s ability to fund the project and placed a condition on the grant accordingly,” Kozak wrote.
This is how the city ended up in its current situation, contemplating giving back the grant because it likely can’t meet the requirement to get all the money for an arena upgrade project in place by the end of March.
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