The venture proved costly for taxpayers, but how will it impact the community if Abbotsford’s 7,000-seat arena is without an anchor tenant for an extended period of time?
Mayor Bruce Banman acknowledged in an interview Wednesday what the commissioners of the AHL, ECHL and WHL have already told The News – it’s highly unlikely a major junior or pro hockey team will call Abbotsford home during the 2014-15 season.
“It would take extraordinary circumstances at this late juncture to be able to get any commissioner from any league to OK a team for next season,” Banman said.
“I’d love to have something for folks next season, but it just didn’t pan out that way.”
The City of Abbotsford paid $5.5 million to terminate the last five years of the Heat’s 10-year supply fee agreement to play out of Abbotsford Centre, which guaranteed the team a break-even budget of $5.7 million annually.
The Heat’s total shortfall between 2009 and 2014 is expected to be approximately $7.2 million once the final numbers for the 2013-14 season are tallied.
In recent years, Abbotsford Centre has run an annual deficit of about $2 million (in addition to the shortfalls incurred by the Heat), with the facility’s deficit for 2013 estimated at $2.3 million.
Banman downplayed the notion that the arena’s revenues would shrink in the hockey team’s absence.
Part of the plan for the arena’s future is to open it up to community user groups, and Banman said the city is hearing from groups which want to rent the ice. Without the hockey team, there will also be more available dates for entertainment, he said.
“Both Ticketmaster and Global Spectrum will be doing their best to help bring us entertainment, and we’ll see what pans out in that,” he said. “We will work very hard to find things to bring into this building.”
Asked for a detailed breakdown of the Heat’s revenues and costs as they related to the arena, the city declined, stating those numbers are held by Global Spectrum, which is under a third-party contract to manage the facility. But Katherine Jeffcoatt, the city’s director of communications, said all hockey-related revenues, including concession and sponsorships, are included within the Heat’s supply fee.
Several sources indicate the absence of an anchor tenant will have a wider economic impact beyond just the facility’s bottom line.
In January 2011, a study presented to city council by consulting company Grant Thornton International stated the arena generated an economic impact of $24.3 million in 2010 and created the equivalent of 305 full-time jobs.
The report didn’t break down the Heat’s share of the economic spin-off, but it did note that the hockey team accounted for 70 per cent of the arena’s total attendance in that year.
In a subsequent interview, Lane Sweeting, whose Fraser Valley Sports and Entertainment group operated the Heat, said the hockey team accounted for “well over half” of the facility’s economic impact.
“The economic impact (of not having an anchor tenant) is going to be quite severe,” Sweeting told The News this week. “It’s a significant amount of salaries that are gone from this marketplace.”
Sweeting added that the hockey team paid about $7,000 per game to the arena to cover overhead. Based on 41 home games in 2013-14, that represents $287,000.
Local non-profit groups will also be affected by the Heat’s departure.
Over their five seasons in town, the Heat generated nearly $1 million for non-profits, according to figures supplied by the hockey club. That includes 50/50 draws ($444,069), Heat Foundation grants for youth-focused charities ($161,693, including an estimated $60,000 in upcoming 2014 grants), and a program which allowed groups to re-sell Heat tickets as a fundraiser (potential profits of $392,770).
Almost $600,000 was generated in the last two seasons, largely due to a change in the fundraiser program which saw the non-profits’ take increased from a flat $3 fee per ticket sold to approximately 50 per cent of the retail rate.
Trevor Bamford, president of the Abbotsford Minor Hockey Association (AMHA), said his organization netted in the neighbourhood of $25,000 annually via the Heat 50/50.
That money supported development initiatives, including extra ice time for the younger age groups, and the AMHA’s benevolent fund, which helps kids who otherwise can’t afford to play.
“It’s sizeable enough that it will have an impact,” Bamford said. “We have to go to the business community and look for sponsors.”
The Heat were also major supporters of SafeRide Home, a local program which provides free transportation for young people who might be impaired, bullied, or in danger.
Program director Doug McKellan said that SafeRide Home, operated by faith-based organization Youth Unlimited, collected roughly $20,000 over the past four years via Heat grants and fundraisers.
They put out an appeal last week, indicating that the program could be scrapped if they aren’t able to come up with funds to replace what came from the Heat. An average of 50 teens use the service every weekend.
McKellan said he frequently took groups of at-risk kids to Heat games, and praised the hockey team’s work with non-profit groups.
“I appreciate that (Heat president) Ryan Walter really wanted to be involved in the community in Abbotsford,” he said. “He really had a heart for the community.”
Banman said the impact of not having an anchor tenant next season will be “minimal” in terms of the economy and non-profits.
“In the short term, we’re going to feel some pain,” he said. “But in the long term, I would expect that it will actually be better.”
Part of Banman’s optimism stems from his belief it will be easier to sell naming rights to the arena without the stigma of the Heat’s unpopular public subsidies.
“We need to be honest about some of the negativity that was surrounding that,” he said. “What I’ve heard is, people are embracing the entertainment side, but it was the Heat deal that was the most troublesome.”
Banman said the city has “a couple irons in the fire” on the naming rights front, though there is no deadline to get a deal done.
He’s also “very confident” that the city will be able to attract an anchor tenant for the 2015-16 season.
“We have had a few phone calls already,” he said, declining to go into further detail. “It’s not from a particular league – it’s been from various leagues.
“This is a very great marketplace for many different leagues, and we’ll see what happens. I’m very confident that something the public can embrace will be in place for that season.”