UCCU Complex upgrades higher than planned, return on investment not to be impacted: town

 

By Ron Giofu

 

Renovations at the UCCU Complex to accommodate the Amherstburg Admirals Jr. C franchise have come in higher than anticipated.

However, according to director of recreation and culture Dean Collver, the increase should not change the projection that the town will realize its return on investment in year two of the five-year tenancy agreement.

Collver reported to town council the dressing room upgrades and the plans to construct a press box were sent out in separate request for proposals (RFP’s). The former did not present an issue, budget-wise, Collver noted.

“The dressing room portion of the project came in aligned with the expected budget with the low bidder, Matassa Construction, being assigned the work,” Collver stated in his report. “This project has been completed.”

The dressing room project was tendered with the lowest one accepted and the cost being approximately $16,000, stated Collver.

Price issues arose during the tendering process for the press box, he added. Collver said tenders were “unexpectedly high” for the press box construction.

“Even after revisiting the details of the project with an architect and reducing the expectations considerably, a $15,000 to $20,000 variance to the original scope is expected,” Collver reported to council. “Ensuring that the stairway access to the press box meets building code is the major reason for the variance.”

Collver stated that administration “has created an addendum to the original RFP with adjusted expectations indicated on the associated architectural drawings,” adding that a revised RFP has been reissued to a pair of bidders that originally tendered on the project.

The recreation and culture department aimed to increase the scope of the total project budget from $44,000 to $64,000.

“The funding source for all Jr. C related upgrades to the (UCCU) Complex has been the business case presented by the presence of a Jr. C team at the complex and the five-year tenancy agreement that was signed in April of this year,” stated Collver. “The initial return on investment for the town was projected to occur in the second year of the agreement and this does not change despite the increase to the scope of the project budget.”

Under the original financial model that allowed for $44,000 in upgrades, the town would turn an overall loss of $9,538 in year one into a $25,284 gain in year two. By the fifth year, Collver projected an accumulated financial gain to the town of $129,210.

In the updated financial model allowing for the revised $64,000 cost of upgrades to the UCCU Complex, the town would take a $29,358 hit in year one but at the end of year two the town would be in the black by a total of $5,284. The updated financial model projects an accumulated financial gain to the town of $109,210 by year five.

The first-year net cost to the town will be borne by the operating budget, he stated in his report. All revenues under the business model will also be captured within the ongoing operating budget, Collver added.

“The Amherstburg Admirals have been consulted throughout this process and are in concurrence with the updated plan including reductions in expectations for the final press box design,” Collver reported to council.

The hope, he added, will be that the relationship with the Admirals will be longer than five years and thus will create even more revenue for the town. He re-iterated the $64,000 cost would still be paid off in year two and result in lower projected revenue by year five but still see the town make over $100,000 total by that time.

Councillor Carolyn Davies wished there was some way of “getting back some of that money” through creating other revenue as a way to “soften” the blow of spending an additional $20,000. Collver noted the ice rates are locked in through bylaw and there is a signed contract with the Admirals’ ownership that has to be adhered to.

Mayor Wayne Hurst said there is an agreement with the Admirals’ ownership that can’t be ignored.

“You can’t skate around it,” said Hurst. “It came in $20,000 above what we anticipated. It’s just going to reduce (the five-year projection) from $129,000, that’s all.”

The additional cost in year one will be charged to operations at the UCCU Complex with director of corporate services Val Sequeira stating there will be monthly updates coming “for where we stand.”

“We can’t lose sight of the bottom line,” added Councillor John Sutton. Sutton also noted the contractual obligations with the Jr. C club and that the agreement will “make money in the long run.”

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