Five years ago, when what was then called the Abbotsford Sports and Entertainment Centre first opened its doors to the public, there were projections that the $55-million state-of-the-art facility would make upwards of $200,000 a year.
Instead, the arena has lost millions of dollars, not to mention its original anchor tenant, the American Hockey League’s Abbotsford Heat. With no sign that the facility will make money anytime soon, council and mayoral candidates have differing views on what, if anything, can be done to improve the Abbotsford Centre’s balance sheet.
On Thursday, the city announced a new contract with the arena’s operator Global Spectrum (see right). The city says the new contract will save taxpayers $300,000 a year and give it more control over the centre’s operation.
The arena’s deficit for 2013 was estimated at $2.3 million. That wasn’t an anomaly. The facility lost $1.97 million in 2012, $2.83 million in 2011, and $2.6 million in 2010. Those numbers do not include millions of dollars of payments to the now-departed Heat, which had a supply fee agreement with the city guaranteeing the team a break-even budget.
With a new contract in place, Global Spectrum projects an annual city-funded subsidy for the facility of $1.64 million. Meanwhile, efforts continue to land a major tenant for the building.
Neither mayoral candidate is optimistic about the chances that the Abbotsford Centre will one day make the city money.
“It’s possible, but it would be very difficult,” said incumbent Mayor Bruce Banman. Such a scenario depends on many factors, he said, most crucially the success of a new major tenant.
Banman said he “inherited this mess,” but that he was proud of the city’s efforts on the file.
“We have worked very hard to improve the cards we were dealt, and I think the citizens of this city should feel much better now that we have in place a contract that gives us more guarantees and powers than we had previously,” he said. He added that Global Spectrum wasn’t required to renegotiate the deal.
Banman also cited more community use of the facility and the success of various entertainment acts at the arena as positives.
He said it is important for the city to take its time to secure a deal with a new tenant that does not require a subsidy.
Banman’s challenger for the mayor’s chair, Coun. Henry Braun, said he had been advocating for a new Global Spectrum deal since he got on council three years ago.
Braun said the first time he learned that the city had inked a new agreement was when The News contacted him for comment.
“I’m disappointed that council hasn’t received a release,” he said, adding that the city had some leverage to renegotiate its contract.
“I’m pleased that we’re finally there. It’s just too bad it took three years,” he said.
Making the business profitable, though, might not be possible.
“Arenas don’t make money, generally, anywhere in North America. That’s a well-known fact. “
He said a $1-million annual loss may be the best taxpayers can hope for once a new tenant is found.
Braun and Banman have both said the deal to cut ties with the Heat was the right move, despite the $5.5-million buyout cost. Both are also skeptical of any calls to sell the facility.
Braun said the city would likely take a heavy loss.
Banman took a similar position, saying “I’m not sure that that’s necessarily a wise move,” although he said the city should examine any offer that is made.
Some council candidates have also spoken out on the issue. Securing a new tenant is widely acknowledged as a necessity, but there are differing ideas on what else needs to be done to manage the arena.
The AbbotsfordFirst slate say more profitable events need to be booked for the arena. Ross Siemens, one of five council candidates on the slate, said the city should look at appointing a community board to manage the facility, using TRADEX, which is managed by the Tourism Abbotsford Society, as an example. (He spoke prior to the city’s announcement of the new contract).
Siemens also said the operators should look at better partnering with the University of the Fraser Valley. Selling the arena for a reasonable price is unlikely to be easy, he said.
Tina Stewart said the arena must remain accessible to community sports teams and groups.
“I know that it doesn’t pay the bills, but at least it’s being used in a positive way.”
Asked about selling the facility, Stewart said “I think we’ve invested too much in it and with proper management of the building I think we could actually make the building work and make it self-sustaining.”
Stewart and Siemens both said cancelling the contract with the Heat was the right move, and that the city would have lost even more if the team had remained here.
The arena was also labelled one of the city’s biggest fiscal challenges by several candidates in response to a Chamber of Commerce questionnaire.
Dan Bue, Raji Buttar, Gerda Peachey, and Raymond Kobes all stressed the importance of bringing a new money-making tenant to the facility.
Kobes said the city may need to be cautious, “knowing that waiting another year may save us exponentially in the long run.”
Peachey said that if the city cannot find a tenant “good for the public purse,” then it should sell the facility.
Many candidates cited city debt as an issue, pointing particularly to money spent on Plan A, which included the Abbotsford Centre, The Reach Gallery and improvements to the Abbotsford Recreation Centre.
Incumbent Coun. Bill MacGregor positively cited the “long-term reduction in the financial commitment to the Abbotsford Centre.”
On his website, Rick Barkwell called the arena “the elephant in the room,” and added his voice to calls for a new money-making tenant.