Saskatoon’s city council has decided to postpone making a decision on the proposed framework for a partnership with a private firm to operate a forthcoming downtown arena district, despite endorsement from the city administration. During a recent council session, a unanimous vote led to the deferral of discussions on the framework until the first quarter of the upcoming year. This surprising move came even after representatives from OVG360, a Denver-based company, traveled to Saskatoon to provide explanations to the council.
Peter Luukko, co-chair of OVG360, expressed optimism about Saskatoon’s potential, stating, “We’re very bullish on Saskatoon,” following a brief presentation by the company’s delegation. However, OVG360 officials refrained from speaking with reporters after the council’s decision.
In a peculiar moment, Mayor Cynthia Block appeared taken aback when no council member proposed a motion to approve the administration’s recommendation regarding the framework. Councilor Robert Pearce suggested postponing the debate until the new year, a suggestion that gained support from the council.
The private partner, OVG360, selected to manage the anticipated arena district, requested modifications to the original framework this year. The revised terms would involve OVG360 contributing $15 million toward the district’s construction, reduced from the initial $20 million. In return, the city would receive a higher percentage of arena profits exceeding $4 million annually. The proposed deal also includes shortening the agreement to 15 years from the initial 25, with an option to extend it for an additional 15 years.
City officials assert that the revised agreement is favorable, with Dan Willems, the city’s director of technical services, stating, “It’s a good deal. We wouldn’t be recommending it otherwise. We’d still be at the negotiation table.”
OVG360 highlighted its extensive experience managing over 300 facilities, including several in Canada like arenas in downtown Hamilton and London, Ontario. However, Trevor Jacek, a board member overseeing the SaskTel Centre arena, and the CFO of the Mid-West Group, criticized the proposed framework. Jacek pointed out the disparity in investment, with OVG360 contributing a small percentage of the construction costs but potentially gaining substantial revenue over the deal’s 30-year lifespan, while the city shoulders the construction risks.
The North Saskatoon Business Association advocated for a one-month delay in the decision-making process on the framework, aligning with the broader support from Saskatoon’s business community for the new downtown arena project.
City officials emphasized that aspects of the agreement could be renegotiated post-approval. Projections estimate the new arena could generate around $6 million in profits in its initial year, a significant increase from the approximately $1.5 million annual profit of the existing SaskTel Centre.
The proposed Downtown Event and Entertainment District, including a renovated convention center at the current TCU Place site, aims to generate $250 million in revenues over three decades to offset the construction debt.
OVG360 assured council members of their commitment to hiring local staff and companies, as well as honoring union contracts, to infuse the arena with the essence of Saskatoon. The project’s progression hinges on securing funding from federal and provincial governments, with an estimated timeline of 18 to 24 months for design work and four years for construction post-funding.
Additionally, council was informed that Tim Leiweke, the former CEO of OVG360 who resigned amid legal issues in the U.S., remains on the company’s board.