Event Centre / Arena Complex Business Case Analysis

EVENT CENTRE / ARENA COMPLEX BUSINESS CASE ANALYSIS

JANUARY 2019

CONTENTS

Executive Summary ...... iii Spruce Grove as an Event Hosting Destination ...... 29 8 Economic Impact Assessment ...... 75 Core Assessment ...... iii Market Opportunities for Event Centres ...... 29 Overview ...... 75 Policy Framework ...... iii Factors Impacting Events Market Growth Potential ...... 29 Range of Measures ...... 75 Range of Uses ...... iv Distinguishing Between Core Commercial Events and Net Impact and Geographic Scale ...... 76 Capital Costs ...... vi Overall Activity and Events at a Multi-Use Sport and Event Centre Accounting for Greater Visitation ...... 76 ...... 30 Economic Impact ...... vii Definition of Terms ...... 76 Broader Utilization of a Multi-Use Facility ...... 31 Funding and Implementation ...... viii Broader Site Development ...... 77 Comparable Event Days for Event Centres ...... 3 3 Comparing Options: Benefit Cost Ratio (BCR) ...... viii Option 1: Twin Pad Arena...... 78 Hotel Development and Market Accessibility ...... 35 Strategic Realities ...... viii Option 2: 2,500 Seat Arena and Community Ice Pad ...... 79 4 Westwind Drive Site Concept Planning ...... 38 Timeline for Implementation ...... x Option 3: 3,500 Seat Event Centre and Community Ice Pad Relevant Context ...... 38 1 Introduction & Background ...... 1 ...... 80 Proposed Concepts for Commercial Build-Out of Westwind 9 Capital Costs Summary ...... 83 Project Background ...... 1 Centre ...... 38 Project Costs ...... 83 Aims and Objectives ...... 1 Distinction Between Concepts ...... 39 Total Project Costs ...... 84 History of Arena Development in Spruce Grove ...... 1 Parking and Traffic Impact Assessment ...... 42 Park and Ride Facility Costs and Land Requirements ...... 84 Report Focus and Scope of Work ...... 2 Parking Demand Assessment...... 42 10 Funding Assessment ...... 88 Limitations of Analysis ...... 2 Transportation Planning ...... 42 Work To-Date ...... 88 Outline of Reporting and Associated Presentation ...... 3 Traffic Impact Assessment ...... 43 Off-Site Levy for Recreation: Considerations ...... 88 2 Core Assessment ...... 6 Land Area Required for Arena Complex ...... 43 Resulting Funding Opportunities and Risks ...... 89 Distinguishing Between Options ...... 6 Comparison of Functional Space Program ...... 43 11 Risks, Implementation & Next Steps ...... 93 Core Differences between an Arena and a Multi-Use 5 Option 1: Twin-Pad Arena ...... 48 Community Sport and Event Centre (MUSEC) ...... 8 Risks Analysis ...... 93 Functional Program and Design ...... 48 Facility / Building Features ...... 8 Process for Delivering the Facility ...... 94 Regional and National Examples of Twin Pads ...... 52 Range of Uses and Events ...... 15 The Traditional Public Procurement Approach ...... 94 Capital Costs ...... 56 Hybrid Facilities to Meet Community Needs ...... 22 Public-Private Partnership Options ...... 95 Operating Performance ...... 56 3 Community Needs & Economic Development Opportunity ...... 25 Efficient Implementation Process ...... 96 6 Option 2: 2,500 Seat Arena and Community Ice Pad ...... 58 Market and Trade Area Profile ...... 25 Potential Timeline for Implementation and Next Steps ...... 96 Functional Program and Design ...... 58 Market and Trade Area Definitions ...... 25 Capital Costs ...... 64 Market and Trade Area Population ...... 25 Operating Performance ...... 64 Appendix 1: Events Review for Arenas: 2,000 to 2,999 Fixed Seats Future Community Needs and Strategic Directions ...... 28 7 Option 3: 3,500 Seat Event Centre and Community Ice Pad ...... 66 Appendix 2: Proposed Westwind Concept Plans and Associated Tax Broad Community Recreation Needs ...... 28 Increment Calculations Functional Program and Design ...... 66 Ice-Specific Needs ...... 29 Capital Costs ...... 72 Appendix 3: Traffic Impact Assessment Memorandum Other Community Needs ...... 29 Operating Performance ...... 73 Appendix 4: Capital Cost Details

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Policy Framework EXECUTIVE SUMMARY Land Use greenfield lands remains a central plank of the City’s growth Core Assessment Westwind Centre is a 58-acre development in the City’s north end at management framework. the junction of the Yellowhead Highway (Highway 16) and Century This report addresses the comparative costs and benefits of 3 options Road. The development site is envisioned to include hotels, The development of a destination gateway at this highly strategic for development: restaurants, residential development and a broad range of individual location was also central to the achievement of the highest and best commercial retail units. use of these lands – commercial development which includes Option 1: Twin-Pad Arena destination uses as well as investment in hotels, meeting and event The Westwind Centre is part of a larger development initiative that venues that contribute to the economic growth and diversification of A twin pad arena facility with limited seating for each rink (500 seats includes Spruce Grove Village Area Structure Plan (ASP) and Pioneer the City. each, subject to final design), necessary dressing rooms including all Lands ASP. The Westwind Centre falls within the Pioneer Lands ASP. requirements for gender specific change rooms, accessibility, and other This is a central metric of any comparison of the 3 options described specifications; additional break-out rooms and concession The development of the proposed arena complex is intrinsically tied to above – which contributes most to the long-term planning goals which opportunities consistent with a community-focused facility. the long-range planning for this area: The original land assembly that successive Councils have supported, and which is now the long-term was stewarded by the City at its expense, subsequent development planning vision for the City. Option 2: 2,500 Seat Arena and Community Ice Pad agreements with the development community, and the broader vision for a mixed-use, mixed-density build-out of these A twin pad arena with a larger seating capacity of up to 2,500-seats for one rink and up to 250 seats for the 2nd rink, including all required Exhibit: Pioneer Lands ASP Development Concept dressing room facilities as per Option 1, additional break-out rooms and function suites, and expanded concession opportunities throughout the building consistent with a larger spectator arena capacity of 2,500 fixed seats.

Option 3: 3,500 Seat Event Centre and Community Ice Pad WESTWIND An event centre based on two pads with seating for 3,500 patrons for one pad, 250-seats for the second pad, full event centre and hosting infrastructure, all necessary functional requirements of both a sports and entertainment venue and community ice venue, with the potential for additional uses to be included in the design.

Additionally, the following items are addressed within this report, in terms of planning for a new arena / event centre facility: x Market Feasibility; x Design and Cost; x Operating Model and Financial Performance; x Funding Analysis; and x Economic Impacts.

Source: Sierra Planning and Management based on Pioneer Lands Area Structure Plan, City of Spruce Grove, 2018.

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Community Facility Needs “lacks the ability to provide efficient year-round programming and size and/or their facilities, to attract a wide variety of special events event hosting capabilities”. (e.g. theatres, auditoriums, conference facilities). An example of this in The 2017 Tri-Region Indoor Recreation Plan, an update to the original Alberta is the EnCana Centre in Camrose – a 2,500 seat venue, where Spruce Grove’s existing large event facility is now 40 years old with a plan developed in 2009, plans for recreation assets within the Tri- concerts and other performances are generally hosted in other venues limited capacity to host larger scale events. With an expanding Region over a 10-year horizon. The previous plan recommended an locally, such as the Bailey Theatre. expansion to the Tri Leisure Centre (TLC), located in Spruce Grove. The population and growing tourism sector, Spruce Grove’s success in the opening of Border Paving Athletic Centre fulfilled a portion of the attraction of larger scale events depends on the development of a new needs identified for gymnastics, meeting rooms and a resource centre, event hosting facility. however, not all the recommended improvements were completed. Broad Range of Uses in an Event Centre (Option 3)

Given the broader recreation facility needs in the region, the updated Multi-use sport and event centres are flexible and scalable facilities, Plan suggests that a new multiplex/leisure centre is needed rather than Range of Uses and therefore capable of hosting a wide variety of specialized events expanding the existing TLC. that go well beyond those community-focused ‘flat floor’ events hosted in arena facilities. MUSECs are facilities designed specifically to Limited Range of Uses / Events in Arenas (Options 1 & 2) In terms of ice-specific needs, the Tri-Region Leisure Plan indicates that accommodate the detailed requirements of a broad range of ticketed the arenas are booked to capacity during prime times (97% on average) The range of special events that can be held in arena facilities (Options activities and events, including: and additional capacity is required immediately and identifies the need 1 and 2) - even in an arena that has a large seating capacity (Option 2) - for 1.5 additional ice pads by 2021 and 2.5 pads by 2026. The previous are limited and vary considerably from those hosted within purpose- x Sports franchises (typically hockey, and in Canada Plan, developed in 2009, identified the potential need for a spectator built multi-use sport and event centres (Option 3). The events and possibly supplemented by other sports such as lacrosse ice arena (over 2,000 seats). event types held within each facility type are described in detail below or basketball);

and depicted on the following pages. x Musical concerts; Looking beyond the recreation and leisure needs of the community, the City’s Cultural Master Plan (CMP) identifies the need for a smaller To demonstrate this difference, the consultant team has undertaken x Theatrical Shows (Broadway, ice shows, dance and a performing arts venue, such as a small “black box” theatre for use by initial desk-based research into the type and regularity of special range of family entertainment performances; cultural groups, as well as the need for a larger performance facility events held at a sample of 35 indoor sports facilities across Canada that (with 550 to 800 seats). The potential inclusion of a performing arts have between 2,000 and 2,999 fixed seats (akin to a large seating x Sports events and championships (curling, hockey, venue / event space within an event centre facility (Option 3) would capacity arena, i.e. Option 2). Details on the methodology and the band, wrestling/combative, gymnastics); findings of this research are presented at Appendix 1. strengthen Spruce Grove’s vision to become a destination for event x Circuses; hosting by 2035 (see Section 3.3.3), with a variety of spaces usable for The research shows that other than the tenant’s regular and post- a multitude of events under one roof. season games, most of the 35 facilities do not host special events on a x Dirt events (motocross, monster trucks); Economic Development regular basis, irrespective of whether the capacity is at the low or high x Public assembly (religious gathering, graduations, end of this seating range. As such, these venues operate as arenas political rallies, awards ceremonies, etc.); A key objective identified within the City’s Economic Development and are not multi-use event centres. Strategy & Action Plan for 2017 – 2021 speaks to “promoting Spruce x Animal/equestrian events (grand prix, rodeo, bull Grove as an event hosting destination that enhances the experience of Looking at this more closely, the information presented at Appendix 1 riding, Lipizzaner Stallions); our places and space”. This is echoed in the City’s Strategic Plan, which demonstrates that where special events are hosted in venues of this sets a vision for Spruce Grove to become a destination for hosting a size, in the majority of cases these tend to be: x Flat floor events (trade shows, consumer fairs, wide range of events by 2035 and is envisioned to have high-quality boat/home & garden shows, banquets, etc.); and x ‘flat floor’ format; leisure and recreational facilities. Strategic priorities to achieve this x Competitively bid or rotational competitions at the include investing in the required infrastructure to host specific events x cater to the interests of the local community (e.g. regional, provincial and possibly national level. and fostering an environment that attracts the services and amenities rodeos, community fairs, local business expositions, required to host events in the City. etc.); and These are presented below.

The Regional Event Hosting Strategy looks at the potential role that x are seasonal or ad-hoc. The capacity of these buildings does not exclude other, community multi-purpose event facilities have in supporting Spruce Grove’s quality scaled events similar to what can occur in large seating capacity arena of place (Goal One from the Economic Development Strategy). As Moreover, where venues of this size are located in urban areas, our (Option 2) – it enhances that capacity. The main body of the report identified within the Strategy, the City’s existing event infrastructure research has identified that there are often larger or purpose-built details these opportunities. alternative facilities locally which are better placed, by virtue of their

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Broad Range of Events That Can Occur at Event Centres Sports Franchises and Events Live Performance Events ‘Flat Floor’ Events Public Assembly / Civic Events

Sporting Events (Games) Music and Dance Events Expos / Trade Shows Ceremonial Events Hockey Band or Solo Artist Tour Circuit Venue Car Shows Remembrance Day Ceremonies Lacrosse Broadway Musicals Motorcycle Shows Emergency Services graduation days (e.g. Basketball Battle of the Bands Boat Shows Police, EMS, Fire) Curling Orchestra / Instrumental Performances Home and Garden Shows Memorial / Commemoration for local Opera Retail Warehouse Sales dignitaries Ballet / Other Dance Events (e.g. River Dance) Consumer Fairs Civic Awards Ceremonies Tournaments / Championships / Qualifier Agricultural Trade Shows Royal Canadian Air Cadets Ceremonial Review (competitive bid or rotational) Restaurant Trade Shows Parade Family-Oriented Events Technology Trade Shows Citizenship Ceremonies Curling (e.g. World Women’s, Continental Cup) Professional Trade Shows Figure Skating Circuses Travel Trade Shows (e.g. Golf and Travel Sledge Hockey Cirque du Soleil Show) Other Public Assembly Ringette Acrobatics / Aerials (e.g. Cirque Musica Synchronized Skating Holiday Wonderland) Building and Development Trade Shows Large-scale Religious and Spirituality Martial Arts Monster Truck Events Small Business / Entrepreneur Expos Gatherings / Congregations (e.g. annual Boxing Motocross Events Women in Business Expos conferences, festivals, etc). Gymnastics (e.g. Nationals) Kids Entertainers (e.g. Paw Patrol Live!) Food and Drink Expos (e.g. Craft Beer Festival, Indigenous Events (e.g. National Indigenous Volleyball (e.g. 14U Nationals) Magic/Illusionist Shows Food and Wine Expo) Peoples Day, Pow Wows) Dodgeball On-Ice Theatre (e.g. Disney on Ice) Wedding / Bridal Shows Youth Gatherings (e.g. WE Day, Youth New Parents, Baby and Toddler Expos Badminton (e.g. Nationals) Empowerment Day) Woman-focused Shows Pickleball Indoor events themed around other statutory Arts & Crafts Shows (e.g. ‘One of a Kind’) Tennis Animal / Equestrian Events days (e.g. Canada Day) Conventions (e.g. ComicCon, Science Wrestling (e.g. Regional Championships for Rodeo Events Harvest Festivals Rendezvous) Alberta Amateur Wrestling Association) Bull-riding – saddle, bareback riding Holiday Festivals (e.g. Festival of Trees, Sportsmen’s Shows Group Dance / Cheerleading Competitions Calf Roping, Breakaway Roping, Steer Roping, Christmas Market, Winter Carnival) Camping and RV Shows Handball Team Roping, Goat Tying Museum / Art Roadshow Exhibitions Steer Wrestling Sector/Industry-specific Recruitment Fairs Municipal and Services Events Barrel Racing (private corporations) Exhibition/Showcase Games Pole Bending Political Rallies

Harlem Globetrotters Dog Shows and Special Events (e.g. Super Dogs) Public / Community Information Events Wrestling Events (e.g. Canadian Wrestling’s Elite, Lipizzaner Stallions Show Other ‘Flat Floor’ Events Newcomers / ’Welcome to Canada’-themed Legends of Wrestling, Real Canadian Wrestling, Equestrian Show Jumping Competitions events Prairie Wrestling Alliance) Equestrian Dressage Exhibition / Competition Esport League and Tournament Play (e.g. SKL Volunteer and Charity Recruitment / Open Contact Sports (e.g. Boxing, UFC and Mixed- Smashfest, Get on My Level) Days Martial Arts) Banquets Municipality Recruitment / Open Days Extreme-Sports (e.g. BMX, Skateboard, etc.) Other Live Performance Events Indoor Auctions Emergency Services Recruitment / Open Days Flea Markets Alumni games (e.g. AHL, NHL) Stand-up Comedy Shows Polling Day Venue Business Conferences Celebrity Talks / Lectures Corporate Annual General Meetings Public Speakers College / High School Proms Psychic medium/ spiritual shows College / High School Graduations Watching Parties TV commercials / filming location

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Capital Costs Total Project Costs Specifically, the 2500 seat arena has a lower floor to bottom of truss height without extra rigging grids which makes it difficult to host any Total project costs are compared for each option, side by side, based Approach major concerts or events that require overhead connectivity for on the costs derived above. In addition to project costs, this table speakers and lights. It will also not have lapidaries and baffles Two contractors with significant experience in the event centre and includes the net land costs associated with the purchase of the imbedded within the trusses and upper concourse walls thus making it arena construction industry were selected to provide preliminary cost required additional land to accommodate both Option 2 and Option 3 acoustically challenging for major concert performances or any events estimates based on the initial design elements created for all three schemes with their required parking supply. The land costs were where sound is a promotional priority. options. established through a process of working with the Joint Venture (JV) developer of the Westwind commercial site, Beaverbrook and One The 2500 seat arena will not have retractable seating along the side Contractors were asked to provide a detailed breakdown of costs by Properties. The cost takes into account the provisions of the original runways and end zones thus limiting the amount of floor space construction division, provide their estimate for General Conditions 2010 agreement between the City of Spruce Grove and the JV for the available for conferences, banquets, exhibitions and tradeshows. and their construction management fee, establish a construction development of the Westwind lands subject to an options agreement. There is no catering kitchen included in the arena design which then contingency as well as providing estimates for insurance and bonding Within these general provisions, the City established the right to retain eliminates the hosting of large banquets/gatherings that require on costs. The purpose of enlisting the opinion of experienced contractors 5 acres of land for the purposes of future development by the City site catering services. is to remove some of the unnecessary design-contingency that often (reflective of the general intent to develop more than a commercial accompanies the preparation of concept plans. shopping environment on the site). Accordingly, the amount of land Finally, the facility is also limited in “back of house” storage areas, required to be purchased for the arena complex and parking (under Included in the cost estimates are construction cost contingency – this normally included in the event centre model to accommodate such Options 2 and 3) is net of the retention of 5 acres. reflects the risks associated with construction costs rising as a result of multi – use components as banquet tables, conference chairs, conference pipe and draping, basketball flooring, etc. In addition, unexpected conditions during construction. As the project moves Based on this, there is an $11 million to $12 million additional cost to required “floor power” for concert equipment and television forward into more detailed design and the design is further developed, building the multi-use event centre rather than develop a large seating production would also not be included in the 2500 seat arena model. the contingency will be reduced accordingly. In addition, a cost capacity arena. THAT IS NOT THE DIFFERENCE BETWEEN 2,500 AND contingency is also included for Furniture, Fixtures and Equipment 3,500 SEATS. THE SEAT COUNT IS LARGELY IRRELEVANT TO THE It is conceivable that an event centre with as few as 2,500 fixed seats (FF&E) given the nature of this significant mix of largely purchased DISTINCTIONS BETWEEN THE BUILDINGS. could be constructed, but this does not represent good value for items for install. Obviously for more complicated sites involving money invested. The price difference would be very little between, The design of the Option 2 facility differs significantly from the Option development of brownfield sites in downtown environments, a essentially representing the cost of the seats and risers for several 3, 3500-seat event centre and community ice rink, and as such, the contingency for extra-ordinary site development costs is warranted. In rows of seats. this instance the Westwind site, and Pioneer Lands in general, are an facility is not able to host the variety and complexity of events that are active greenfield development zone, reducing (not eliminating) the possible within the event centre model. likelihood of unforeseen site-related extra-ordinary development costs. Accordingly, a contingency for site-related costs is not required. Exhibit: Estimated Total Project Capital Costs (Inclusive of Land Purchase (2018$) The approach of the costing exercise is to answer the question: what is this building and site likely to cost to develop? To that end, the detailed analysis which has been undertaken effectively answers this question, including the appropriate use of construction contingency.

Note: Assumes Option 1 is located on Westwind Site.

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The 3,500 option actually represents the minimum that should be Economic Impact The arena / event centre complex is part of a 60.69-acre area built – many communities have developed significantly larger seating development plan comprising office, retail, commercial and residential capacities in their rebuilding programs while others have been more The scales of analysis within this report recognize the reality of impacts uses. Patronage to the facility is linked to broader site development modest for market reasons. However, all have built to a reasonable which transcend municipal borders. Hence, the assessment of which is expected to encompass hotel accommodations and a range of standard recognizing that these buildings are not to be sized to economic impact of the three options (community twin-pad arena, complementary food and beverage, entertainment and retail services current population levels (history shows that more seating is large capacity arena, and multi-use sport and event centre) must be to support overnight and same-day visitation at the facility. This helps required) but are sized to reflect a reasonable seat count for a viewed on a number of geographic scales. The scales of analysis, in localize the capture of off-site benefit. This however is expected only growing community and a building that will be functional for at least general, move from the National, Provincial and region-wide in the circumstance of the development of a multi-use sport and event 40 years. perspective. centre capable of hosting a range of commercial ticketed as well as a broad range of participatory events and other community gatherings.

Exhibit: OHL Arena Capacities Net impact will be greatest for the multi-use event centre and lowest

Capacity Built Seats Replaced for a community twin-pad. Regardless, the most important measure of impact in terms of local economic development is the likely scale of so- London Knights 9,100 2002 4,000 called off-site expenditure from visitors – spending that happens Kitchener Rangers 7,700 1950 plus expansion late because of a decision to visit the facility. This spending has most 1990s / 2000s impact where the person comes from outside the local area but spends Oshawa Generals 5,500 2008 3,625 locally. Again, municipal boundary-specific analysis is not accurate nor Windsor Spitfires 6,500 2008 advisable, but it is important to generally distinguish between impacts Niagara IceDogs 5,300 2014 2,800 which are more likely spending which otherwise would have occurred Erie Otters 5,500 1981 locally and that which is net new to the local area (generally defined). Hamilton Bulldogs 17,500 1985 Guelph Storm 4,540 1998 3,999 Exhibit: Ideal Range of Measures Ottawa 67's 10,000 1966 Sault Ste. Marie 5,000 2006 3,990 Greyhounds Barrie Colts 4,100 1995 Kingston Frontenacs 5,400 2008 3,300 Saginaw Spirit 5,500 1972 Sudbury Wolves 4,600 1950 proposal for 5,800 seats Sarnia Sting 5,200 1998 Flint Firebirds 4,400 1969 Owen Sound Attack 3,500 1983 Mississauga Steelheads 6,000 1996 Peterborough Petes 4,050 1956 North Bay Battalion 4,200 1954 Reno in 2012 Belleville Bulls 4,400 1978 3,700, reno in 2017 Plymouth Whalers 4,000 Brampton Battalion 6,000 Mississauga St. 6,000 Michael's Majors

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Funding and Implementation richness of the assessment and the timing are poorer. The base plan persists if the decision is not to build a new facility. Indirectly, however, for the remainder of the build-out for the Westwind lands which the assumption of lost economic impacts, and widening operating Detailed funding tables are included in the body of the report with represents Phase 3 (Phases 1 and 2 largely complete) involves a lower deficits in older buildings is a proxy for this lack of functionality. order of development, lower assessment value and a quasi- explanations. Distinguishing Option 3 is the uplift created by virtue of Based on the above, the BCR for a 30-year period are as follows: the event centre relative to building an arena. This uplift is significant. industrial/warehousing/showroom form of urban development on large lots. Arguably because this will involve large lots there is every Net Present Option 1: Option 2: Option 3: 3,500 Fixed A multi-use sport and entertainment centre is expected to create a possibility that the density will in fact be lower than currently projected Value (NPV at Twin Pad 2,500 Fixed Seat Multi-Use different, higher order of development compared to the arena option – lower gross floor area, lower assessment and lower taxation. 5% discount Arena Seat Arena Community Sport (Option 2). This is a serious proposition which goes to the heart of the rate) and Event Centre relative value for money associated with the second and third options. It is also the case that the timing of development of both the remaining commercial lands as well as the residential development to the east of PV Total ($41.3 Million) ($56.0 Million) ($67.1 Million) As we have described in previous reports to Council, the ability to the Westwind commercial lands will be lower density, longer build-out Capital Cost generate an uplift in taxation specifically and absolutely because of the and lower taxation. The higher value and faster build-out because of PV Total Net ($4.1Million) ($26.2Million) ($19.4 Million) decisions made to invest in public infrastructure has become part of the event centre (the Higher Order Scenario which is Option 3) Operating the funding strategies for these facilities. Regardless of the draw on provides for a tax increment to help fund the project. (Excl. capital tax dollars as a result of the development itself (and an event centre is reserve) not as significant a draw as residential development for example), the fact that these revenues would not have occurred or their timing PV Capital and ($45.4 Million) ($82.2 Million) ($86.5 Million) would have been delayed, links these revenues to the development of Comparing Options: Benefit Cost Ratio (BCR) Operating the infrastructure. These tax increments are then assigned to the PV Off-Site $124.2 Million $130.6 Million $311.1 Million project as a revenue stream to offset any public debt. The lens of City planning is not a snap-shot picture of 2018 as it relates Economic to the value of the options but is long-term in nature. Impact Benefits Exhibit: Tax Increment Comparison The Benefit-Cost Ratio (BCR) is a single comparison of the shorter and longer terms costs and benefits of each option. Net $78.8 Million $48.4 Million $224.6 Million

x The Benefit-Cost Ratio is a measure of the expected Benefit-Cost $2,000,000 $2,172,596 benefits of a project relative to the costs, expressed Ratio (BCR) 2.74 1.59 3.60 $1,750,000 generally in monetary terms. $1,500,000 >1.0 = x In a public infrastructure context it is broadly defined $1,250,000 $1,366,601 as all measurable benefits including economic impact. <1.0 = $1,000,000 $1,033,432 x The BCR is based on net present value (NPV) of $750,000 benefits and costs (i.e. discounted value of future Note: Capital costs associated with lifecycle replacement costs is excluded. $500,000 benefits over the project life less discounted costs). Such costs would be proportional to the differences in original capital cost $378,104 between the options $250,000 x A BCR great than (>) 1 = project has value to proceed $- (analytically). Strategic Realities Year 5 Year 10 Year 15 Year 20 Year 25 Year 30 x The BCR is different from risk-assessment which can be Lower Order Option Higher Order Option x A key driver of this project is long-range planning: community part of the adjustment of future individual costs and recreation planning, land use planning, economic development, revenues. social and cultural development; as such this project is not to be The development of a large seating capacity arena in Option 2(Lower x The BCR includes wider economic benefits (those viewed as an alternative solution to the recommendations of the Order Option) does not in the opinion of either the consulting team or which can be measured). Tri-Region Indoor Facilities Plan. This plan meets the needs for the developer stimulate the development of a destination gateway at additional ice in the service area but it does not represent a The resulting analysis is a comparison of financial costs and benefits (or the Westwind location – it stymies it. Accordingly the expected multi-use community recreation concept akin to that envisaged cost avoidance as the case may be). It is not capable of directly development is different in nature – the ultimate gross floor area is not in the plan or typically developed as best practice for community measuring the intangible factors such as the lack of functionality that dissimilar to the destination retail focus under Option 3, but both the recreation in other centres. That particular complex which may

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or may not comprise ice, but will comprise a pool, fitness, other o Option 2 is a large seating capacity community arena; it is capability should be recognized for its true value – the ability to recreational spaces and potential gymnasium and field house not an event centre. This option offers the lowest value generate capital and operating cost savings by avoiding the need possibilities can happen and likely outside of Spruce Grove. The for money of all three options and is the highest risk to build (now or in the future) other types of event space – or at options under review in this report address a significant part of option in terms of operating performance and impact. least withstand more effectively the demands to do so. The the future ice needs of the community but also provide for a This is because the construction is that of an arena, yet it modern multi-use event centre has become an important tool in wide array – more than contemplated in the Tri-Municipal Plan – is likely the operation of it will seek to compete with effective capital and operating resource planning in a number of of other community uses. multi-use event centres. It is very unlikely that a building small and medium-sized communities in Canada, by promoting of this nature can effectively compete, yet its scale is such these venues as both commercial event centres as well as x The project contemplated in either Option 2 or Option 3 is a that it will incur higher costs than a community twin-pad community facilities to be actively used in all four seasons. project with many moving parts as all such projects that arena. Needless to say, in addition this kind of building has been used contribute significant economic development potential do. This because of its multi-use character to anchor major downtown includes not only considerations of feasibility, funding and x The delta between Option 3 and Option 2 in capital cost terms is renewal in a number of Canadian centres – the latest being design, but also site placement and working alongside the only about $11 to $12 million but the implications of the higher Downtown Moncton. As a direct result of the decision to invest developer and establishing a relationship of mutual benefit with investment in the multi-use event centre are considerable: in the downtown with a new multi-use sport and entertainment the prospective major tenant at the facility. o A better performing building – one that is capable of centre, the value of building permits in downtown has spiked. x This project has been advanced to the point of implementation. capturing the market that exists; Sierra Planning and Management undertook such projections in Risks have been identified and strategies are in place to ensure o It provides a much higher economic impact; 2011 before the project was approved as a case study to that the project is designed, delivered and managed effectively o The development of a multi-use event centre can be demonstrate the activity generated by the proposed facility and so that the prescriptions of this business case exercise can be expected to generate an assessment and taxation uplift the potential for spin-off commercial development. These fulfilled. that is legitimately due to the destination hub that the projections have in fact been exceeded by the current planning strategy for the area calls for. projections of building investment planned and committed for x Community recreation plans emanating from the other o In terms of the benefits and costs of the project relative downtown Moncton. surrounding communities are not the alternatives to this project to the other options, Option 3 is far and away the which represents a clearly defined possibility for achieving a x In terms of alternatives to either Option 1, 2 or 3, it is important preferred investment in terms of value for money. While to recognize that development of some nature is required and is number of combined community, planning and economic this no doubt creates greater challenges in developing a development goals for the City and region. an opportunity. Option 1 has clearly lower risks attached to it funding strategy given the delta difference in capital compared to the other options. However, it raises serious x In terms of the options under review, this is a comparison costs, when both the capital and operating costs are questions over the suitability of the Westwind site such that the between an arena complex and a multi-use sport and event considered together in present value terms, the 5 acre increment to be retained by the City should probably be centre: two different building typologies with vastly different difference between Option 2 and Option 3 is even less – used for other purposes. The twin pad option is best suited on functionality. This comparison is not about fixed seating count. about $4.5 million. Indicatively this kind of analysis is cheaper land elsewhere in the City. important even if the specific resulting delta of x Based on the review, each of the projects would, over the course difference may be subject to variation: Option 3 is more x Option 1 as a preferred development plan would not create any of time, represent very positive infrastructure to the benefit and expensive in capital terms but reduces the impact of that solution to problem of spectator events at the aging Grant Fuhr wellbeing of the community – the Benefit-Cost comparison cost through the capacity for more effective operational Arena. The opportunities for the Saints to become more demonstrates such. However, there are important differences revenues and lower operating debt. In addition, the installed in the community and region through the opportunities between the projects: economic impact to the region and the stimulus to that a new facility offer (including a range of hockey school and surrounding lands for higher order development is also other potential sanctioned activities) would be lost. Option 1 is a partial answer to the Tri-Municipal Indoor o apparent in the view of both the consultant and land Facilities Plan requirement for additional indoor facilities. developer. However, it is not the ideal mix of uses in a single complex

and the Westwind site would arguably be the wrong x Option 2 provides a solution to the need to replace the Grant location. This building is not the highest and best use for x In cost avoidance terms, Option 3 has the added value of Fuhr Arena as the primary spectator venue but it comes at a high that site. The recreation plan calls for the building offering a range of spectator and event configurations that blend cost and lower value for money compared to Option 3. location to be considered as being outside of Spruce from the largescale sporting event to a range of community x Option 3 represents the best value for money. Grove. participatory events as well as a range of alternative set-up for community and commercial theatre productions. This multi-use

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Timeline for Implementation Exhibit: Potential Project Timeline

The accompanying graphic illustrates the suggested timeline for the development of the City’s selected project option; a community twin- pad facility, a 2,500 seat arena and community ice pad, or a 3,500 seat event centre and community ice pad. The timeline assumes a public process will be undertaken following the January 14, 2019 session of city council. Specifically, Council will engage with the community in a series of public consultation sessions designed to secure feedback from the citizens of Spruce Grove relative to the three facility options provided by the consulting team. After the public consultation sessions have concluded and staff has collected additional public information, the Spruce Grove City Council will be directed to select the appropriate facility option for development. The project timeline becomes effective when Council has made their decision. For the purposes of this development, the graphic depicts June 2019 as the official start date for the project. Approximately twenty – eight months have been allocated for the completion of the project.

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | x PART A: INTRODUCTION

1 INTRODUCTION & BACKGROUND

1 INTRODUCTION & BACKGROUND Project Background satisfied that it has considered the range of options open to it and can History of Arena Development in Spruce determine the best path going forward. Grove Sierra Planning and Management, together with sub-consultants Perkins + Will and the International Coliseums Company (ICC), have been retained The City of Spruce Grove, dating back before the time of the Agrena by the City of Spruce Grove to develop a business case justification for an Aims and Objectives development, has recognized the need to provide recreation infrastructure event centre / arena complex in Spruce Grove. and sought to do so by working in partnership with surrounding This report builds upon work previously completed by the consulting team The purpose of this study is to examine three alternative scenarios to communities. (with a different architectural consultant), which recommended the provide Council with the appropriate information to make an informed There was, is, and will continue to be, important arguments for developing development of a 3,500 seat event centre with an additional ice pad for decision. The alternatives include: a range of facilities - in the early 1970s this comprised strong desires for a community use. The work carried out resulted in the development of the 1. A community twin pad arena facility with limited seating of 500 pool while others pressed for an arena and curling complex. In the current following reports: +/- seats per pad; planning era, the need to meet alternative demands remains an important x Phase 1: Market Feasibility and Financial Pre-Feasibility 2. A twin pad arena with expanded seating up to 2,500-seats for aspect of future planning in the Tri-Region area. (2015); one rink and 500 seats for the second pad; and A decision to build the Agrena with its seat count was based on a x Phase 2: Feasibility Study (2016); and 3. An event centre based on two pads with seating for 3,500 population of under 5,000 at the time. This speaks to the need to recognize that growth occurs, and the scale of future development needs x Phase 3: Economic Impact Assessment (2017). patrons for one pad, 500-seats for the second pad, with full event centre and hosting infrastructure. to anticipate that growth. This was how the Agrena was conceived. The City of Spruce Grove has already budgeted $56.1 million in the 2019 - The 3 scenarios, further detailed in Section 2.1, provide a useful structure The following table details arena development that has occurred over 2021 Corporate Business Plan for the construction of a new twin-pad arena Spruce Grove’s history: / event centre complex. This initiative is identified under Strategy 2.2.1 of for undertaking the research and engagement necessary for decision the Corporate Plan, which reads “We will be forward thinking and making. Each scenario was assessed in relation to the value for money Exhibit 1: History of Arena Development in Spruce Grove responsible in helping to develop and strengthen the leisure, recreation related to the capital costs, operating deficit, and future economic impacts, and measured against the goals and vision that the City is seeking Agrena – Grant Agrena – Stu Tri-Leisure and sports community through innovative and strategic programs, Fuhr Arena and Barnes Arena Centre (twin- initiatives and infrastructure.” to achieve. This was completed through a review of recent examples under each of the 3 models presented above in terms of their construction Curling Club (addition) pad) As identified in the previous work completed to date, an additional $23 costs, uses, operating successes and failures, and other metrics as agreed Year 1974 1984 2002 million dollars (2016 dollars) was identified as necessary to build a new with the City. Completed 3,500-seat event centre plus 1 additional community ice pad and Population 4,900 11,569 16,532 necessary servicing, parking and other infrastructure on site, bringing the The resulting assessment of value for money is based on a range of factors Spectator 1,259 fixed 500 fixed 298 fixed per total to an order of magnitude of $79 million. including the economic returns from the capital expenditure as well as Seating 200 standing 0 standing pad (596 total ongoing operational support, the implications of the type of building for Capacity fixed) City staff and Council recognized that additional analysis by way of a growing the tourism base in the community, and the ability to stimulate a Additional Project led by - Capital cost business case justification is required in order to rationalize the scale of higher order of development on the surrounding commercial lands. Details Spruce Grove was $28.41 M this expenditure. However, this additional analysis also presents the Agricultural opportunity to recognize the contribution of prior work and move beyond Society (incl. this to establish a range of other options. In short, this report goes farther, funding) deeper and creates more concrete plans such that Council can be fully

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 1

As the community continues to grow, a long-term vision is required to plan Funding Analysis for the next phase of arena development in Spruce Grove, with the development of what will be a 50-year facility (the subject of this report). The existing funding analysis represented a clear strategy of choices and potential sources to meet the capital obligations of the projects. The analysis was based on a number of assumptions. In short, the purpose of this work stream is to translate as many assumptions as possible into Report Focus and Scope of Work reliable sources with limited risk potential. Based on this a new strategy was created through engagement with One Properties Inc. to confirm its In order to provide the required information to City staff and Council, the role as a partner for a development strategy that directly reflects the following details the work streams undertaken to develop this report. potential associated with commercial development around the building. Market Feasibility This report also provides details on the approach to servicing costs, land take, and parking (dedicated versus easement to utilize other parking This includes a comprehensive update of the market analysis undertaken versus other solutions, in consultation with One Properties Inc.). as part of the two previous studies – 2015 Market Study and 2016 Phase 2 Market Confirmation, as well as through a community needs assessment Economic Impacts and market feasibility, re-establishing the range of potential uses / functional elements. This includes undertaking economic impact analysis for each of the three alternative facility scenarios, which will use modelling in place already, and As a result of the above, this report outlines the market opportunities and be adjusted for functional program, scale, capital costs and expected event provides an assessment of the scale of facility required, hosting potential, days, scale of patronage, etc. community and partner needs, and suitability of uses, etc. Engagement with stakeholders was important throughout the process. Design and Costing Limitations of Analysis

This includes an iterative design and ideas process, conducted with a new The contents of this report and its analysis is based, in part, upon a range architectural consultant on-board to provide an alternative perspective on of primary and secondary sources. Sierra Planning and Management facility design. endeavours to ensure the accuracy of all secondary sources of information This report includes an updated functional space program, which considers but cannot warranty the accuracy of secondary source material. In the additional facilities and amenities that reflect community need, and event that secondary source information is inaccurate or incomplete, revisits the footprint, floor plans, elevations, etc. of the facility scenarios. Sierra Planning and Management, Perkins + Will, and International This was informed by the updated market analysis and opportunities work Coliseums Company (ICC), will not be held liable for original errors in data. detailed above. Order of magnitude capital cost estimates have been The report and the information contained within it is prepared specifically prepared and are presented for the 3 options. for the purposes as laid out in this report. Reliance on information and Operating Models and Financial Performance opinion contained in this report should not be extracted in part for the entire report without the permission of Sierra Planning and Management. This includes developing an operating model by establishing an agreed approach to operations – how the facility should function and therefore what performance measures should be expected.

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Outline of Reporting and Associated Presentation

The report is organized into five parts containing eleven sections in total, as follows:

PART A: INTRODUCTION Section 1: Introduction & Background Identifies the purpose and aims of the study, as well as the work streams followed. Section 2: Core Assessment Provides an overview of the three options analyzed as part of this study. The character of these buildings, as well as their form and function are described. Best practice examples of hybrid facilities are also provided. PART B: TRADE AREA UPDATE Section 3: Community Needs and Economic Defines the market area for the proposed facility and presents its demographic Development Opportunity characteristics based on current data. This section also identifies the existing recreational needs of the community based on the outcomes of the Tri-Region Leisure Plan and presents market opportunities for event centres. PART C: OVERALL SITE PLANNING Section 4: Westwind Drive Site Concept Planning Details the context and proposed concept planning for the Westwind Drive Complex, the proposed site of the arenas / event centre. PART D: COMPARITIVE ASSESSMENT OF OPTIONS Section 5: Option 1: Twin-Pad Arena Provides details relating to the design and functional program, capital costs, and operating impacts of a twin-pad arena facility. Best practice examples are also provided. Section 6: Option 2: 2,500 Seat Arena and Details the proposed design and functional program, related capital costs, operating Community Ice Pad impacts, and partner opportunities for a 2,500-seat arena facility and community ice pad. Section 7: Option 3: 3,500 Seat Event Centre and Provides details relating to the design and functional program, related capital costs, Community Ice Pad operating impacts, and opportunities for partnerships for a 3,500-seat event centre and community ice pad. Section 8: Economic Impact Assessment Sets out the range of measures in determining economic impact, including construction, operational, and off-site spending impacts. Section 9: Capital Cost Summary Provides a comparative summary of the three options in terms of capital costs. PART E: FUNDING & IMPLEMENTATION Section 10: Funding Assessment Building upon the funding strategy developed in the previous phases of work, this section of the report identifies a new funding strategy for the balance of the project capital costs. Section 11: Implementation Options & Next Steps The recommendations of this report are presented as are the required next steps of project planning necessary to advance these recommendations.

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2 CORE ASSESSMENT

2 CORE ASSESSMENT Distinguishing Between Options

Three alternative scenarios were considered as part of the core assessment:

Option 2: 2,500 Seat Arena and Community Ice Pad Option 3: 3,500 Seat Event Centre and Community Ice Pad Option 1: Twin-Pad Arena A twin pad arena with expanded seating of up to 2,500-seats for one pad An event centre based on two pads with seating for 3,500 patrons for one A twin pad arena facility with limited seating for each rink (500 seats each, and up to 250 seats for the second pad, including all required dressing pad, 250-seats for the second pad, full event centre and hosting subject to final design), necessary dressing rooms including all room facilities as per Option 1, additional break-out rooms and function infrastructure, all necessary functional requirements of both a sports and requirements for gender specific change rooms, accessibility, and other suites, and expanded concession opportunities throughout the building entertainment venue and community ice venue, with the potential for specifications; additional break-out rooms and concession opportunities consistent with a spectator capacity for 2,500 fixed seats. additional uses to be included in the design. consistent with a community-focused facility.

TWIN PAD ARENA EXAMPLE 2,500 SEAT ARENA EXAMPLE 3,500 SEAT EVENT CENTRE EXAMPLE

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Exhibit 2: Program Space Comparison of Options

COMMUNITY TWIN PAD MODEL 2,500 SEAT ARENA MODEL 3,500 SEAT EVENT CENTRE MODEL x Twin Rinks x Twin Rinks x Event Centre scaled for multi-purpose uses x 2,500 fixed seats in main arena / 250 seats in community ice x 500 fixed seats in each community pad rink x 3,500 seats with 950 retractable seats x Normal Meeting Room x Meeting Room (100-person capacity minimum) x Auditorium/multi-use flex space x Parking (+/- 100 per rink) x Parking x Tenant space

INCLUSIONS INCLUSIONS x Adjacent hotel with conference facilities x Parking x 2 NHL regulation ice surfaces x 2 NHL regulation ice surfaces x 2 NHL regulation ice surfaces x 500 seat capacity in each rink (subject to final design) x Main arena maximum floor space 85’ x 200’ x Main event centre maximum floor space 110’ x 240’ x Small meeting room/warm up room x 2,500 fixed seating bowl/3,600 capacity with floor seating x 3,500 fixed seating bowl/5,000 capacity with floor seating x Snack bar/concession x 250 seat capacity in second ice surface x 250 seat capacity in community ice surface x Skate rental space and skate sharpening x 2 meeting rooms with capacity to open into 1 large space x 4 concessions in main event centre x Administration office x 4 concessions in main arena x Areas available in concourses for food and beverage carts/kiosks x Upper level viewing area with conference space x 1 snack bar/concession in second ice surface x Catering kitchen for large gatherings in event centre x Approximately 200 parking spaces x 12 dressing rooms (includes one large room option for visiting x Auditorium/multi-use flex space x Space for workshop/storage AJHL teams.) x 12 dressing rooms x Zamboni combined; storage for glass, snow removal x 2 referee rooms/flex rooms x 2 party/meeting rooms in community ice facility equipment, etc. x Box office x 2 Star/Green rooms/flex space x 12 dressing rooms x 1 large team room (Saints) to include dressing room, player x Staging and storage expanded space at back of house x 2 referee/officials dressing rooms lounge, coach’s office, training area, equipment and laundry room and storage area. x Rigging, lighting and power for performance events x Men’s/ladies’ washroom (one each) x High performance training centre (optional)

DETAILS DETAILS x 4 sided and center hung scoreboard with video display and x Sound room (figure skating) - Include as part of timebox sponsorship panels x Main tenant (Saints) dressing room and team area as per Option 2 area x Administration offices x 12 Luxury suites x Additional parking spaces of 220 with Transit Station x Multiple restrooms (4) in main arena and community ice rink x Loge boxes and club seats (2) x Premium seat level lounge and exterior balcony x Larger back of house workshop and storage areas than twin x Expanded audio/visual displays and sponsorship panels pad (advertising) x 521 parking spaces x Box office x Additional parking of 220 with Transit Station x Administrative offices x Team store (optional) x Team offices (optional) x 635 parking spaces x Additional parking of 220 with Transit Station

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 7

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KŶĞŽĨƚŚĞŵĂŝŶŐŽĂůƐŝŶƚŚĞĚĞƐŝŐŶŽĨĂDh^ŝƐƚŽƉƌŽǀŝĚĞƚŚĞŽƉĞƌĂƚŽƌ ŝŶĐůƵĚĞĚŝŶƚŚĞϮϱϬϬƐĞĂƚĂƌĞŶĂŵŽĚĞů͘ ǁŝƚŚƚŚĞŐƌĞĂƚĞƐƚĨůĞǆŝďŝůŝƚǇĂŶĚŽƉƉŽƌƚƵŶŝƚǇƚŽŵĂǆŝŵŝǌĞƚŚĞ͞ĞǀĞŶƚ ǀĞŶƚĞŶƚƌĞƐ;KƉƚŝŽŶϯͿ ĐĂůĞŶĚĂƌ͘͟&ƵŶĚĂŵĞŶƚĂůƚŽƚŚĂƚŝƐƚŚĞĂďŝůŝƚǇƚŽƋƵŝĐŬůǇĐŚĂŶŐĞĨƌŽŵŽŶĞ ĞǀĞŶƚŽƌĨŽƌŵĂƚƚŽĂŶŽƚŚĞƌ͘ŶĞǆĂŵƉůĞŽĨĂƉƉƌŽĂĐŚĞƐƚŽĐŚĂŶŐŝŶŐĞǀĞŶƚ dŚĞƌĞĂƌĞƐĞǀĞƌĂůĐŽŵƉŽŶĞŶƚƐƚŚĂƚĨŽƌŵƉĂƌƚŽĨĂƚǇƉŝĐĂůŵƵůƚŝͲƵƐĞƐƉŽƌƚ ĨŽƌŵĂƚƐ;ŝĐĞƚŽĐŽŶĐĞƌƚĂŶĚŝĐĞƚŽĚŝƌƚĞǀĞŶƚͿŝƐƉƌŽǀŝĚĞĚďĞůŽǁ͘ ĂŶĚĞǀĞŶƚĐĞŶƚƌĞ;KƉƚŝŽŶϯǁŝƚŚϯ͕ϱϬϬƐĞĂƚƐͿǁŚŝĐŚĂƌĞŶŽƚĨŽƵŶĚǁŝƚŚŝŶ ĂƌĞŶĂĨĂĐŝůŝƚŝĞƐĞǀĞŶŝĨƚŚĂƚĂƌĞŶĂŚĂƐĞǆƉĂŶĚĞĚ;ůĂƌŐĞĐĂƉĂĐŝƚǇͿƐƉĞĐƚĂƚŽƌ /ŶĂĚĚŝƚŝŽŶ͕ǁŝƚŚŝŶDh^ƐƚŚĞƌĞĂƌĞŽĨƚĞŶĂŶĐŝůůĂƌǇƐƉĂĐĞƐ;ŝ͘Ğ͘ǀŝĞǁŝŶŐ ƐĞĂƚŝŶŐ;KƉƚŝŽŶϮǁŝƚŚϮ͕ϱϬϬƐĞĂƚƐͿ͘dŚĞƐĞĨĞĂƚƵƌĞƐŝŶĐůƵĚĞ͕ďƵƚĂƌĞŶŽƚ ĚĞĐŬƐ͕ĐůƵďůŽƵŶŐĞ͕ĞŶƚƌĂŶĐĞŚĂůůƐ͕ĞƚĐ͘ͿĂŶĚͬŽƌĚŝƐƚŝŶĐƚŝǀĞƐƉĂĐĞƐ;ŝ͘Ğ͘ ůŝŵŝƚĞĚƚŽ͕ƚŚĞĨŽůůŽǁŝŶŐ͗ ĨůĞǆŝďůĞĂƵĚŝƚŽƌŝƵŵƐƉĂĐĞͿƚŚĂƚĐĂŶďĞƵƚŝůŝǌĞĚŽŶƚŚĞŝƌŽǁŶĨŽƌƐŵĂůůĞƌŽƌ ƐƉĞĐŝĂůŝǌĞĚŐĂƚŚĞƌŝŶŐƐ͕ĂĐƚŝǀŝƚŝĞƐĂŶĚĞǀĞŶƚƐďƵƚĐĂŶĂůƐŽĂĐƚĂƐĂ x ŶŽƉĞŶƚǇƉĞƌŽŽĨƐƚƌƵĐƚƵƌĞĐĂƉĂďůĞŽĨĂĐĐŽŵŵŽĚĂƚŝŶŐƐŚŽǁůŽĂĚƐ͘ ĐŽŵƉůĞŵĞŶƚĂƌǇƐƉĂĐĞƚŽƚŚĞĂĐƚŝǀŝƚŝĞƐƚŚĂƚŽĐĐƵƌŝŶƚŚĞďŽǁůĂƐƉĂƌƚŽĨĂ /ƚŝƐĐŽŵŵŽŶĨŽƌƐƉĞĂŬĞƌͬůŝŐŚƚŝŶŐůŽĂĚƐƚŽďĞŝŶƚŚĞϱϬ͕ϬϬϬʹϳϱ͕ϬϬϬ ůĂƌŐĞƌĞǀĞŶƚ͘ ůď͘ƌĂŶŐĞĂŶĚƚŚĞƐĞŶĞĞĚƚŽďĞĞĂƐŝůǇĂŶĚƋƵŝĐŬůǇƐƵƐƉĞŶĚĞĚĨƌŽŵ ƚŚĞƵŶĚĞƌƐŝĚĞ;ƚǇƉŝĐĂůůǇͿŽĨƚŚĞƌŽŽĨƐƚƌƵĐƚƵƌĞ͘ĐĐĞƐƐƚŽƚŚĞ ƐƚƌƵĐƚƵƌĞƚŚƌŽƵŐŚĐĂƚǁĂůŬƐŝƐĐƌŝƚŝĐĂůĨŽƌƐŚŽǁƐĞƚƵƉ͕ĨŽƌƐƉŽƚůŝŐŚƚ ůŽĐĂƚŝŽŶƐĂŶĚŐĞŶĞƌĂůŵĂŶĂŐĞŵĞŶƚŽĨƚŚĞůŝŐŚƚŝŶŐĨŽƌƚŚĞďƵŝůĚŝŶŐ͘

/dzK&^WZh'ZKssEdEdZͬZEKDW>yh^/E^^^E>z^/^ͮ:EhZzϮϬϭϵͮϴ Arena: Building Features + Events

Eastlink Event Centre, Clarenville, NL

• 2,240 seats (hockey) • Opened in 2009 • Advertised as venue for non-ice events, including concerts, expos and festivals • Typically hosts local community-scale events (e.g. local theatre productions, small expos and trade shows, etc.) Arena: Building Features + Events

EnCana Arena, Camrose, AB

• 2,500 fixed seats • $29 million (2007 expansion) • Events are focused on hockey - Camrose Kodiaks (lead tenant) • Facility rarely hosts non-ice special events (Performance Centre in Camrose typically hosts major events and concerts)

Woodstock District Community Complex, Woodstock, ON

• 2,000 fixed seats • $12 million (1996) • Events are focused on hockey - Woodstock Navy Vets (lead tenant) MULTI-USE SPORT AND EVENT CENTRE / 3,500 SEAT CAPACITY BUILDING FEATURES

CAA Arena (formerly Yardman Arena) Expansion, Belleville, ON

• Originally 3,217 fixed seats, increased to 4,400 fixed seats + 500 non-fixed (4,800 likely official capacity) • $21 million / 40 year solution • Olympic ice reduced = bottom and top loading circulation Events Hosted in Past Year Attendance (approx.) • New northern wing – best seats in the house Price is Right Show 2,500 • Roof truss / floor to truss height a compromise Fan Fest 1,500 • Lower ceiling height interferes with sight lines • No retractability of seating Dancing with the Stars 1,200 • Type of events thus far are oriented to flat floor Boxing Event 1,400

RV Show $10,000 in revenues

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 11 MULTI-USE SPORT AND EVENT CENTRE / 3,500 SEAT CAPACITY BUILDING FEATURES

Meridian Centre, St. Catharines

• 5,300 seats • Opened in 2014 • $50 Million Capital Cost • 360 degree seating with retractable seating to enlarge flat floor capacity • Higher floor to ceiling height • Retractable jumbotron

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 12 MULTI-USE SPORT AND EVENT CENTRE / 3,500 SEAT CAPACITY BUILDING FEATURES

Coca-Cola Coliseum WFCU Centre, Windsor (formerly Ricoh), Toronto • 6,500 fixed seats • Removable seating on this • Large floor space allows for much larger mid-sized event specialized events to occur Leon’s Centre, Kingston, ON centre enabled a definitional multi-use opportunity Tribute Centre, Oshawa, ON

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 13 MULTI-USE SPORT AND EVENT CENTRE / 3,500 SEAT CAPACITY – SCALABLE FACILITY BUILDING FEATURES: COMPLEMENTARY FLEXIBILE SPACES

Flex / Auditorium Space

Club / Viewing Lounge

Lobby / Circulation Space

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 14

Range of Uses and Events Broad Range of Uses / Events in an Event Centre (Option 3) Limited Range of Uses / Events in Arenas (Options 1 and 2) Multi-use sport and event centres are flexible and scalable facilities, and therefore capable of hosting a wide variety of specialized events that go The range of special events that can be held in arena facilities (Options 1 well beyond those community-focused ‘flat floor’ events hosted in arena and 2) - even in an arena that has a large seating capacity (Option 2) - are facilities. MUSECs are facilities designed specifically to accommodate the limited and vary considerably from those hosted within purpose-built detailed requirements of a broad range of ticketed activities and events, multi-use sport and event centres (Option 3). The events and event types including: held within each facility type are described in detail below and depicted on the following pages. x Sports franchises (typically hockey, and in Canada possibly supplemented by other sports such as lacrosse or To demonstrate this difference, the consultant team has undertaken initial basketball); desk-based research into the type and regularity of special events held at a sample of 35 indoor sports facilities across Canada that have between x Musical concerts; 2,000 and 2,999 fixed seats (akin to a large seating capacity arena, i.e. x Theatrical Shows (Broadway, ice shows, dance and a range Option 2). Details on the methodology and the findings of this research are of family entertainment performances; presented at Appendix 1. x Sports events and championships (curling, hockey, band, The research shows that other than the tenant’s regular and post-season wrestling/combative, gymnastics); games, most of the 35 facilities do not host special events on a regular basis, irrespective of whether the capacity is at the low or high end of this x Circuses; seating range. As such, these venues operate as arenas and are not multi-use event centres. x Dirt events (motocross, monster trucks); Looking at this more closely, the information presented at Appendix 1 x Public assembly (religious gathering, graduations, political demonstrates that where special events are hosted in venues of this size, rallies, awards ceremonies, etc.); in the majority of cases these tend to be: x Animal/equestrian events (grand prix, rodeo, bull riding, x ‘flat floor’ format; Lipizzaner Stallions); x cater to the interests of the local community (e.g. rodeos, x Flat floor events (trade shows, consumer fairs, boat/home community fairs, local business expositions, etc.); and & garden shows, banquets, etc.); and x are seasonal or ad-hoc. x Competitively bid or rotational competitions at the regional, provincial and possibly national level. Moreover, where venues of this size are located in urban areas, our research has identified that there are often larger or purpose-built The capacity of these buildings does not exclude other, community scaled alternative facilities locally which are better placed, by virtue of their size events similar to what can occur in large seating capacity arena (Option 2) and/or their facilities, to attract a wide variety of special events (e.g. – it enhances that capacity. A comprehensive list of potential events that theatres, auditoriums, conference facilities). An example of this in Alberta can be held at a multi-use sport and event centre is provided in Section 3.3 is the EnCana Centre in Camrose – a 2,500 seat venue, where concerts and of this report. other performances are generally hosted in other venues locally, such as the Bailey Theatre.

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 15 ARENA FACILITY / 2,500 SEAT CAPACITY

Minor Hockey Games Roller Derby Events Local Craft Fairs

Small Trade Shows Adult Hockey Games Small Rodeos Graduation Ceremonies

Battle of the Bands Movable Playgrounds Wrestling Events

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 16 MULTI-USE SPORT AND EVENT CENTRE / 3,500 SEAT CAPACITY SPORTING / SPECTATOR EVENTS

Hockey Games / Tournaments Karate / Martial Arts Events

Wrestling Meets / Championships Curling Tournaments

Boxing / Mixed Martial Arts Events

Dance / Cheer Events

Gymnastics Events Basketball Games / Tournaments

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 17 MULTI-USE SPORT AND EVENT CENTRE / 3,500 SEAT CAPACITY LIVE PERFORMANCE EVENTS

Live Theatre / Broadway Musicals Professional Bull Riding / Rodeo Events Music Concerts

Ballet Performances

Circus / Cirque-du-Soleil On-Ice Theatre / Performances

Orchestra Performances Equestrian Events Children’s Entertainment Shows

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 18 MULTI-USE SPORT AND EVENT CENTRE / 3,500 SEAT CAPACITY ‘FLAT FLOOR’ EVENTS

Esport League / Tournament Play

Business Conferences / Expos Award Ceremonies / Banquets

Agricultural Trade Shows University Science Rendezvous

Food & Drink Festivals Boat Shows

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 19 MULTI-USE SPORT AND EVENT CENTRE / 3,500 SEAT CAPACITY PUBLICSEAT ASSEMBLY CAPACITY / CIVIC EVENTS

Commemorative Ceremonies Political Rallies / Debates

Military / Emergency Services Ceremonies

Youth Empowerment Events

Indigenous Events / Ceremonies Polling Day Venue

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Small College Graduation Small School Graduation: Half-House High School Wrestling Championships: Seating Retracted

High School Graduation Public Skating High School Basketball on Ice Cover

Community Yard Sale Local Rodeo Events High School Volleyball: Seating Retracted Community Theatre

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Hybrid Facilities to Meet Community Needs Town Toyota Center K.C. Irving Regional Wenatchee, Centre There are a number of hybrid venues that combine local / community Washington Bathurst, New needs with a broader need for high quality spectator facilities and which Brunswick cater to the needs of the touring events industry. The following highlights x Opened in 2008 best practice for hybrid facilities within North America. x $52.8M Capital Cost x Opened in 1996 x Main spectator x $21M Capital Cost facility with 4,300 x Main spectator seats and club space Silverstein Eye facility with 3,500 x Conference facility seats, 24 private Centres Arena x Team store / boxes (formerly Independence specialty concession x Sports hall of fame Events Centre) x Community ice x Community ice Independence, facility with 500 facility Missouri seats and dressing x Walking track x Opened in 2009 rooms x $50M Capital Cost x Main spectator facility with 5,800 seats, includes 25 suites, 2 party suites, club seating Prospera Place Langley Events Centre and lounge area Chilliwack, British Langley, British x Community Columbia Columbia recreational ice facility with 536 x Opened in 2004 x Opened in 2008 seats, includes x $20.3M Capital Cost x $57M Capital Cost dressing rooms x Main spectator x Main spectator and skate rental facility with 5,000 facility with 5,000 shop seats seats x Meeting rooms x Community Centre x Tap and Grill Facility with x Community ice fieldhouse and facility gymnasiums x Banquet Hall x Event lounge x Sports Medicine Clinic x Gymnastics Centre

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PART B: MARKET & TRADE AREA UPDATE

3 COMMUNITY NEEDS AND ECONOMIC DEVELOPMENT OPPORTUNITY

3 COMMUNITY NEEDS & ECONOMIC DEVELOPMENT OPPORTUNITY Exhibit 4: Population for Trade Area and Surrounding Market Market and Trade Area Profile Market and Trade Area Population Population data gathered from the 2016 Federal Census, together with Market and Trade Area Definitions Locality Population the City of Edmonton’s Municipal Census 2016 (which provides a ward- Parkland County (2016 Census) 32,097 As identified in the 2015 Market Feasibility Study, the primary ‘Trade Area’ by-ward population breakdown for West Edmonton) identify that as of for an event centre/arena in Spruce Grove is assumed to comprise the tri- 2016, the Census Divisions captured within the Trade Area and broader Spruce Grove (2016 Census) 34,066* regional geographic area of Spruce Grove, Stony Plain and the eastern Market Area had a population of 83,352 and 854,900 respectively. This Stony Plain (2016 Census) 17,189 portion of Parkland County. data is presented in the adjacent exhibit. Sub Total: 83,352 The potential market capture area for a commercial event centre (the Updates to the Population Data since 2016 ‘Market Area’) has been established to be far larger and encompasses Stony Plain Indian IRI (2016 Census) 1,690 The City of Spruce Grove’s 2018 Municipal Census identifies that the parts of the City of Edmonton and the Capital Region that are within a Calahoo (2016 Census) 85 population of Spruce Grove has grown to 35,766 residents (an increase reasonable (30-minute) drive time of the Westwind site in the City of Onoway (2016 Census) 1,029 Spruce Grove. This includes the following settlements: of approximately 5% from the 2016 Federal Census data (34,066)). Devon (2016 Census) 6,578 x The City of St. Albert to the north; Moreover, using Environics forecasts obtained through ESRI Business St. Albert (2016 Census) 65,589 Analyst software, the Market Area is estimated to have a 2018 x The Town of Devon to the south; and population of circa 950,000, however, the population cannot be broken West Edmonton (City of Edmonton, 2016 Municipal Census) down by ward and/or by Census Sub-Division. Ward 1 71,340 x The western portions of the City of Edmonton. Ward 2 74,211 Differences to the City’s ‘Retail Trade Area’ A map of the defined Market Area is shown on the following page. Ward 3 72,113 At this point, it should be emphasized that the population of the Ward 5 71,679 ‘Market Area’ defined above is larger than that of the ‘Retail Trade Area’ Ward 6 72,367 used by the City in its 2017 Retail and Office Market Analysis. In the Ward 8 67,365 City’s analysis, the ‘Retail Trade Area’ is identified as having a population of approximately 138,000 and has been delineated with the Ward 9 104,943 purpose of identifying the primary and secondary retail areas from Ward 10 60,170 which retail sales are most frequently and likely to be sourced and Ward 12 102,389 generated. This includes the smaller communities such as Sangudo and Sub Total: 771,548 Mayerthorpe to the Northwest along Highway 43, and Entwistle and Total: 854,900 Wildwood to the West along Highway 16. To the east, the ‘Retail Trade

Area’ only extends to Highway 60, whereas the potential market Source: Statistics Canada 2016 Census and the City of Edmonton 2016 capture area for a commercial event centre extends to include the Municipal Census population of West Edmonton. This reflects the wider interest and attraction of attendees that could be generated for unique special *Note: The population of Spruce Grove, according to the 2018 City of Spruce events. Grove Municipal Census is now 35,766. For consistency in reporting, we have used Statistics Canada data where possible.

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Exhibit 5: Market Area Definition

Bon Accord GibbonsGibboGibbo

Morinville

30 minutes

SpruceSp Grove Edmonton Stony Plain Sherwood Park

Parkland County

Beaumont

Source: Sierra Planning and Management, using 2018 data from Business Analyst (ESRI)

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The following observations are made on population growth trends and Exhibit 7: Comparison of Historic Population Growth Rates Exhibit 6: Change in Population Density (population / sq. km) in forecasts for the Market and Trade Areas following the publication of in the Trade Area, Edmonton and Alberta (2001 – 2016) updated data, including the 2016 Statistics Canada census data: Spruce Grove, Stony Plain and Parkland County (2006 to 2016)

Trade Area Population Continues to Grow 40 1200 1057.9 As was the case at the time of the previous Study, Spruce Grove has, and is 35 1000 expected to continue to experience population growth at a rapid pace. 808.6 Since 2011, Spruce Grove has surpassed the population of Parkland County 30 800 738.4 and now has the largest population in the Trade Area. 25 600 481.2 422.7 347.2

20 Pop/Sq. km 400 Exhibit 8: Historic Population Change in the Tri-Region Area (2006 – 2016) % Change 15 200 12.2 12.8 13.4 40,000 10 0 32,097 34,066 Spruce Grove Stony Plain Parkland County 35,000 5 2006 2011 2016 30,568 29,220 30,000 0 26,171 2001-2006 2006-2011 2011-2016 25,000 Source: Sierra Planning and Management based on Statistics Canada 19,541 2006, 2011 and 2016 Census Data 20,000 17,189 15,051 Parkland County Spruce Grove Stony Plain 15,000 Edmonton Alberta 12,363 The Market Area and Spruce Grove are Forecast to Continue 10,000 to Grow in the Future Source: Sierra Planning and Management based on Statistics Canada 2001, 5,000 2006, 2011 and 2016 Census Data Since the previous Study, the Edmonton Metropolitan Region Board has developed new population projections with both low and high scenarios. - Parkland County Spruce Grove Stony Plain The Market Area is forecast to experience a 91% increase in population Spruce Grove Continues to Densify between 20161 and 2044 (from 83,352 in 2016 to 159,000 by 20442). 2006 2011 2016 As the population continues to grow, Spruce Grove is also densifying with Based on this, the Market Area is poised to accommodate over 75,000 new continually strong residential development on the outer ring areas, and residents over the next 26 years. Source: Sierra Planning and Management based on Statistics Canada through intensification of existing built-up areas. For Spruce Grove, the low growth scenario represents a 44.3% increase in 2006, 2011 and 2016 Census Data the City’s population (an additional 15,834 residents by 2044). The high growth scenario would see a near doubling (94.6%) in size from the 2018 Since 2011, the population of Spruce Grove has increased by 30.2% population provided in the City’s Municipal Census program (an additional accounting for nearly 8,000 additional residents. While the growth rate 33,834 residents). has declined (from 33.9% growth between 2006 and 2011), the City has become home to more people when compared to the previous period (2006 and 2011 saw an additional 6,600 persons).

1 Statistics Canada 2016 Census Data. 2 Based on Edmonton Metropolitan Region Growth Plan’s high growth scenario.

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Exhibit 9: City of Spruce Grove Population Projections The average household spend in the Market Area on Live Sporting and Exhibit 12: 2018 Average household spend on Live Sporting and Performance Performance Arts Events is currently $177 in the Market Area, which is Arts Events: Comparison 80,000 lower than the average household spend in Alberta as a whole. The 70,000 69,600 households which spend the most on average on these types of events in Locality Avg. Spend on Live Avg. Spend on Live 60,000 the Market Area are in Spruce Grove ($227), followed closely by Sporting Events (2018) Performance Events (2018) 50,000 51,600 households in Parkland County ($211). The average for household Spruce Grove $50 $127 40,000 spending among these geographies is $190 on Live Sporting and Market Area 35,766 30,000 Performance Arts Events (shown as the orange dotted line on the Parkland County $48 $163 20,000 following exhibit). Stony Plain $40 $125 10,000 Spruce Grove $54 $172 Edmonton $48 $120 0 Exhibit 11: 2018 Average household spend on Live 2018 2044 Sporting and Performance Arts Events (Blended rate) Alberta $70 $156 Low Scenario High Scenario Canada $39 $117 $250 $227 $227 $211 Source: Sierra Planning and Management based on City of Spruce Grove Source:Source: Sierra PlanningPlanning and Management,Management, usingusing 2018 dat dataa ffromrom BuBusinesssiness $200 $177 Analyst (ESRI) 2018 Municipal Census and Edmonton Metropolitan Region Growth $166 $168 Plan, 2017. $156 $150 Future Community Needs and Strategic Income Profile and Spending Patterns $100 Directions 2018 data derived from Business Analyst (ESRI) shows that the median household income in the Market Area is $88,652, which is higher than in $50 Broad Community Recreation Needs Edmonton, and the Province as a whole. Among these geographies, the average household income is $93,600 (shown as the orange dotted line on $0 The 2017 Tri-Region Indoor Recreation Plan, an update to the original plan the following exhibit). developed in 2009, plans for recreation assets within the Tri-Region over a 10-year horizon. The previous plan recommended an expansion to the Tri Exhibit 10: Median Income Comparison Leisure Centre (TLC), located in Spruce Grove, as well as a need for a spectator facility (2,000+ seats). The opening of Border Paving Athletic $113,281 $113,743 $120,000 Centre fulfilled a portion of the needs identified for gymnastics, meeting $96,006 rooms and a resource centre, however, not all the recommended $100,000 $88,652 $89,519 $82,993 Source: Sierra Planning and Management, using 2018 data improvements were completed. from Business Analyst (ESRI) $80,000 $71,011 Given the broader recreation facility needs in the region, the updated Plan $60,000 suggests that a new multiplex/leisure centre is needed rather than $40,000 Looking more closely at the comparative data on spending in 2018 (Exhibit expanding the existing TLC. The Plan identified that the greatest need is for pools, followed closely by arena facilities, while fieldhouses ranked $20,000 12), households in the Market Area spend 2.5 times annually on Live Performance Art Events ($127) as they do on Live Sporting Events ($50). third. The Plan recommended consideration of the following amenities as $0 This is the same proportion as Edmonton. In the Trade Area, the spend on part of a new multiplex facility: Live Performance Events increases to over three times as much as on Live x Aquatics centre; Sporting Events. x Twin pad arena; x Fieldhouse; x Fitness / wellness facility; x Walking track; and Source: Sierra Planning and Management, using 2018 data x Indoor adventure centre. from Business Analyst (ESRI)

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The location of a new multiplex was not identified within the Plan although Population Standards Spruce Grove’s vision to become a destination for event hosting by 2035 Stony Plain was identified through the consultation process as being (see Section 3.3.3), with a variety of spaces usable for a multitude of underserved. The Plan recommended a locational analysis to follow the The Tri-Region Leisure Plan recommended that the current arena service events under one roof. feasibility study. level of 1 ice pad per 14,000 residents be maintained or improved if possible. Based on the most recent population data from the Spruce Spruce Grove as an Event Hosting Destination Ice-Specific Needs Grove Municipal Census (2018) and Statistics Canada Census Data (2016), the current standard of provision is 1 ice pad per 17,010 residents within A key objective identified within the City’s Economic Development Strategy As it relates to ice arenas specifically, the Tri-Region Plan indicated that the Tri-Region area. Without the implementation of additional pads, the & Action Plan for 2017 – 2021 speaks to “promoting Spruce Grove as an there are 5 ice surfaces within the region: standard can be expected to continue to decrease as population grows. event hosting destination that enhances the experience of our places and space”. This is echoed in the City’s Strategic Plan, which sets a vision for x TransAlta Tri-Leisure Centre (2 pads), Spruce Grove; The exhibit below uses the low scenario for population growth which Spruce Grove to become a destination for hosting a wide range of events x Agrena (2 pads), Spruce Grove; and indicates that without investment in new ice infrastructure, the Tri-Region by 2035 and is envisioned to have high-quality leisure and recreational x Glenn Hall Centennial Arena (1 pad), Stony Plain. will require an additional 2 ice pads by 2028 and 4 ice pads by 2044 to facilities. Strategic priorities to achieve this include investing in the maintain the recommended standard of 1 pad per 14,000 residents. Considering the factors detailed below, the Plan identified the need for 1.5 required infrastructure to host specific events and fostering an additional ice pads by 2021 and 2.5 pads by 2026. If the high growth population projections were to be used for analysis, the environment that attracts the services and amenities required to host Tri-Region will require an additional 3 ice pads by 2028 and 6 ice pads by events in the City. Utilization Exhibit 13: Projected Ice Pad Requirements for Tri-Region The Regional Event Hosting Strategy looks at the potential role that multi- The Tri-Region Leisure Plan indicates that the arenas are booked to purpose event facilities have in supporting Spruce Grove’s quality of place capacity during prime times (97% on average) and additional capacity is 20182018 20282028 203 20388 20 2044 (Goal One from the Economic Development Strategy). As identified within Projected Population for required immediately, although the Plan did not provide a breakdown of 85,052 99,689 116,845 126,500 the Strategy, the City’s existing event infrastructure “lacks the ability to Tri-Region (Low Scenario) utilization by facility. Total facility usage was identified at 61% booked or provide efficient year-round programming and event hosting capabilities”. utilized hours, which includes both prime time and non-prime time. Ice Pads Required (based on a provision level of 1 6.1 7.1 8.3 9.0 Spruce Grove’s existing large event facility is now 40 years old with a Based on information provided by the City of Spruce Grove, additional pad per 14,000 residents) limited capacity to host larger scale events. With an expanding population analysis has been undertaken by the consulting team for the 2017/18 and growing tourism sector, Spruce Grove’s success in the attraction of Ice Pad Deficit (based on (1.1) (2.1) (3.3) (4.0) season at the four Spruce Grove arena facilities, as detailed below. current supply of 5 pads) larger scale events depends on the development of a new event hosting facility (Option 3: Event Centre). While the resulting utilization rates do not indicate a critical capacity issue, engagement undertaken as part of the Tri-Region Leisure Plan indicated Source: Sierra Planning and Management based on City of Spruce Grove that there is immense pressure at ice arenas with growing participation in 2018 Municipal Census, Statistics Canada 2016 Census Data, and Edmonton minor hockey, who typically get first priority for prime-time ice rentals. Metropolitan Region Growth Plan (Low Growth Scenario) 2017. Market Opportunities for Event Centres This high demand for facility usage during evening and weekend prime time hours reduces the time available for recreational activities and The following discussion is centered on Option 3: 3,500 Seat Event Centre growing sports (i.e. ringette, speed skating, etc.). 2044 to maintain the recommended standard of provision. and Community Ice Pad.

Exhibit 14: Prime Time and Total Ice Utilization A new multi-use event centre and community ice pad in Spruce Grove would address the immediate requirement for 1.5 additional pads by 2021 Factors Impacting Events Market Growth Potential Stu Barnes Grant Fuhr TLC North TLC South as identified by the Tri-Region Leisure Plan. The additional ice required The events market can and should be viewed in terms of demand and Utilization Arena Arena Pad Pad beyond 2021 could be accommodated elsewhere within the Tri-Region supply: demand for the product from the market area, and supply of Prime Time 91% 82% Not Avail. Not Avail. area. touring product or other events hosted by promoters or the City. Taking Total 59% 57% 45% 49% this further, the supply of event product is very much subject to market Other Community Needs dynamics of its own: the level of interest (demand) of the tour promoters Notes: Prime time ice defined as 3:45pm to 11:30pm weekdays, and 8:00am to and the supply of venues which are capable of ensuring the financial Looking beyond the recreation and leisure needs of the community, the 11:30pm weekends. Agrena Utilization Rates based on a typical week. TLC success of the tour at each stop along the route. utilization based on total annual bookings. City’s Cultural Master Plan (CMP) identifies the need for a smaller performing arts venue, such as a small “black box” theatre for use by Previous reports as well as our recap of the consumer market have Source: Sierra Planning and Management based on data provided by the City of cultural groups, as well as the need for a larger performance facility (with described the events market in terms of the range of tour flow through Spruce Grove. 550 to 800 seats). The potential inclusion of a performing arts venue / Western Canada, as well as the profile of the market area population and event space within an event centre facility (Option 3) would strengthen its propensity for consumption of arts, cultural, sporting and other

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spectator events. There are therefore two markets to consider: (1) the facilities that, because of more limited revenue opportunities, bowl. Many other event types occur, and these are discussed in depth of capacity or demand for entertainment product within the primary may resort to flat fee rental agreements for events in the the sections which follow; and trade area and (2) the relative appeal of the market and the venue in building. particular to the business case of the tour promoters and others who Our earlier work comprised a detailed assessment of the tour market and 2. The estimation of event days for a multi-use sport and event supply commercial events. events venue market more broadly across the Edmonton Region. This centre in Spruce Grove operating at a normalized state (i.e. after enabled us to determine not only the scale of events at other locations but one or two years in the market), is conservative. This is true for typical entertainment events, major sporting events and also the overall number, and the extent to which the market was capable trade shows, but is less applicable to the conference market. of accommodating a new entrant into the market in the form of an event The range based on the most comparable facilities shown in Exhibit 17 is as There are a number of factors which together impact the growth of the centre in Spruce Grove. The conclusion of that work was a recognition that follows: a low of 52 event days with most in the 70 to 100 range for event events market over time. Some of these influences are structural and sufficient market opportunity exists and that the most important days, and a top end for event days in the 130 range. To emphasize again, long-term (for example population growth, local economic development, determinant of the success in generating event days lies in the approach to these are core commercial events including sports franchise games, where and the timely investment in event hosting infrastructure), while others management of the facility. It is also important to recognize that the applicable. market for acts and a range of events is highly competitive and even the are more cyclical (international exchange rates and general economic The low end observed was in Wenatchee. However, as the operator of conditions). most effective projection and marketing techniques cannot guarantee that the number of events achieved will meet budgeted targets. that facility will indicate, the building is programmed most days of the year Factors include: with a range of other community related sport, culture and Distinguishing Between Core Commercial Events gathering/meeting events. So too is the expectation for an event centre in x Macro-economic conditions such as US/Canada Spruce Grove. currency exchange rates which impact relative demand and Overall Activity and Events at a Multi-Use Sport from US acts coming north; economic and Event Centre However, Option 2 in our analysis represents an arena – a large seating growth/decline/recession; societal preferences and trends capacity community arena. As such, the projected event days for this in lifestyle; It is crucial to understand the difference between core commercial events building are far lower than for Option 3: Event Centre. An arena, even and the overall number of events and activities that occur in multi-use with a larger seat count than normal for arenas, does not constitute a x Regional economic conditions such as market sport and event centres. These buildings are routinely active and are building capable of competing in the market place for core events above population growth, quality of road infrastructure and ease utilized in exactly the manner envisaged for multi-use centres on a daily and beyond the single sports franchise. of access (the completion of Anthony Henday orbital basis year-round. Our estimation of the market opportunity for an event centre remains as highway is a good example of improving ease of access to However, for purposes of the all-important estimation of revenue- in earlier reports, reported here for ease of reference. the broader reaches of the Capital Region); and the advent generation, the industry adopts a clear categorization of event types: of new competitive venues in the general market area; those that are commercial in nature and represent successful inward Exhibit 15: Summary of Events by Category and Attendance in the Proposed Event and Centre investment for events in the community (touring shows, major sporting events such as bid or rotational championships, exhibitions, trade shows Avg. Duration Total x Local circumstances – focused on the building and its # and so on) versus those which are inherently more community in nature. of Events Event sufficiency to draw and retain the touring product. The Events (Days) Days quality of the building – and the site – in terms of ease of The latter may or may not be significantly revenue-producing and may production set-up, take-down, loading and staging is involve not only spectator attendance but involve community Games/Tournaments 33 1 33 important to all promoters and has a direct impact on the participation. Other Major Spectator Sports Events 2 2 4 Tournaments 3 3 9 bottom line. The consultant team has, over the years, created a detailed dataset of Concerts/Family Shows/Theatre 21 1.76 37 events from a selection of multi-use sport and event centres. Just as large o Those venues that maximize the capacity of the artists to make Trade Shows & Community Events 7 1.71 12 money, maintain their brand, meet or exceed fan expectations capacity arenas (2,000 + seats) do not typically host a range of multi-use, ticketed spectator events, the event centres under review do. Exhibit 17 and perform with ease will, over time, outperform those TOTAL EVENT DAYS: 66 95 venues that cannot deliver in this way. Newer event centres outlines the range of events – including the separation between core commercial events and all other booked events at these centres. will outcompete older arena venues. *Note: Figures exclude daily community use of the facility (for ice rental, programs and

This distinction is important – so that two points are clear: other program uses). Excludes all other rentals of facilities. The above is solely for o Functionality, seating capacity, and ambience (often events. overlooked but crucial to those events that do not require the 1. The core commercial events that we have projected is a specific full building), are important determinants of success. Added projection based on market understanding, risk, and experience Source: Sierra Planning and Management (2016) to this, modern facilities are often seen as more aligned with elsewhere for those events which occur principally in the event the risk associated with promoting events compared to older

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Broader Utilization of a Multi-Use Facility x Political Rallies This of course is over and above the daily use of the facility as part of the x Public / Community Information Events regional supply of community ice for all ice sports, and the opportunity for Even for the broader use by the community there are differences between x Newcomers / ’Welcome to Canada’-themed events the use of the concourse and other rooms on a daily basis. Together with an arena and an event centre. The latter is capable of a range of x Volunteer and Charity Recruitment / Open Days the multi-use performance space which is expected to be fully community level events where these involve participation and/or x Municipality Recruitment / Open Days programmed for community use, both the event bowl and the community spectator assembly and can be configured for a vast range of event types. x Emergency Services Recruitment / Open Days ice pad and the building as a whole will be an animated space on a regular An arena cannot. An arena can operate for some of these types of events x Polling Day Venue basis. Indeed 25% of the ice time is projected to be dedicated for minor but not all. Option 2, as currently configured and costed, does not include sports. a multi-use performance room (auditorium). Flat floor The challenge will be for access to the event centre ice bowl. Because of Both an arena and a multi-use sport and event centre can meet the the need to prioritize the space for commercial events and the tenant(s) demands for ice sports. x Expos and trade shows (various types e.g. agri shows, RV/car franchises, it is important to recognize that allocation policies will be shows, wedding/bridal shows, etc) paramount. There will be competing demands for the space. Effective Below is a list of some of the community-type events that a multi-use x E-sport League and Tournament Play (e.g. SKL Smashfest, Get on management and policies designed to balance revenue maximization event centre can expect to attract and accommodate. A 2,500 Seat Arena My Level) through commercial events, adherence to the requirements of facility can, within the limits of its functionality, attract a good number of these x Banquets licensing, and equity of access to support community sports and cultural but will be less capable for certain event types. The important observation x Indoor Auctions activities, will be critical. is that these events can occur in the event centre above and beyond the x Flea Markets core commercial events. x Business Conferences It is therefore important to recognize that the successful negotiation of a license agreement with the prime tenant is a fundamental next step in While some are obviously community events (e.g. school graduation), x Corporate Annual General Meetings order to define more clearly and precisely the rights of access and there are others (e.g. rodeo) which fall within the ‘community’ or larger x College / High School Proms expectations for the full array of commercial and community events. This ‘tour circuit’ categories, depending on the scale of event and x College / High School Graduations pertains specifically to the main bowl – the community spaces in the prestige/popularity of performers. Excluded from below are the x TV commercials / filming location auditorium and community ice rink in Option 3 are dedicated community competitive tender sports tournaments, tour circuit events (music, circuses spaces. The performance space, at less than 400 seats, can also operate as etc) – which have a wider (not just local community) draw. These form Animal / Equestrian Events a venue for ticketed spectator events should allocation policies allow. part of the core commercial events. x Rodeo Events In summary: Ceremonial Events x Bull-riding – saddle, bareback riding x As a community recreation complex, Option 3, Option 2 and x Remembrance Day Ceremonies x Calf Roping, Breakaway Roping, Steer Roping, Team Roping, Goat Option 1 will all be active on a daily basis year-round; x Emergency Services graduation days (e.g. Police, EMS, Fire) Tying

x Memorial / Commemoration for local dignitaries x Steer Wrestling x As a venue for major community gatherings and spectator events x x Barrel Racing Civic Awards Ceremonies that are more community-focused, both Option 2 and 3 will offer x Pole Bending x Royal Canadian Air Cadets Ceremonial Review Parade significant potential but Option 3 far exceeds option 2 in terms of x Dog Shows and Special Events (e.g. Super Dogs) x Citizenship Ceremonies capacity and flexibility; and x Lipizzaner Stallions Show

x Equestrian Show Jumping Competitions x Option 3 is the only option that can achieve the projected core Other Public Assembly x Equestrian Dressage Exhibition / Competition commercial events that will moderate the deficit, maximize x Large-scale Religious and Spirituality Gatherings /Congregations economic impacts and represent the most effective value for (e.g. annual conferences, festivals, etc). It is possible that over time the multi-use sport and event centre could money. x Indigenous Events (e.g. National Indigenous Peoples Day, Pow attract the 95 to 100 core commercial event days (more if a second tenant Wows) is established) plus a full suite of major community events utilizing the flat x Indoor events themed around other statutory days (e.g. Canada floor, seating, concourses and more. The number of such major uses Day) cannot be predicted but would be potentially per the list above, counted in x Harvest Festivals the 10s of additional event capacity. x Holiday Festivals (e.g. Festival of Trees, Christmas Market, Winter Carnival) x Municipal and Services Events

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Exhibit 16: Broad Range of Events That Can Occur at Event Centres Sports Franchises and Events Live Performance Events ‘Flat Floor’ Events Public Assembly / Civic Events

Sporting Events (Games) Music and Dance Events Expos / Trade Shows Ceremonial Events Hockey Band or Solo Artist Tour Circuit Venue Car Shows Remembrance Day Ceremonies Lacrosse Broadway Musicals Motorcycle Shows Emergency Services graduation days (e.g. Police, Basketball Battle of the Bands Boat Shows EMS, Fire) Curling Orchestra / Instrumental Performances Home and Garden Shows Memorial / Commemoration for local dignitaries Opera Retail Warehouse Sales Civic Awards Ceremonies Ballet / Other Dance Events (e.g. River Dance) Consumer Fairs Royal Canadian Air Cadets Ceremonial Review Tournaments / Championships / Qualifier Agricultural Trade Shows Parade (competitive bid or rotational) Restaurant Trade Shows Citizenship Ceremonies Family-Oriented Events Technology Trade Shows Curling (e.g. World Women’s, Continental Cup) Professional Trade Shows Circuses Figure Skating Travel Trade Shows (e.g. Golf and Travel Show) Other Public Assembly Cirque du Soleil Sledge Hockey Building and Development Trade Shows Acrobatics / Aerials (e.g. Cirque Musica Holiday Large-scale Religious and Spirituality Gatherings / Ringette Small Business / Entrepreneur Expos Wonderland) Congregations (e.g. annual conferences, festivals, Synchronized Skating Women in Business Expos Monster Truck Events etc). Martial Arts Food and Drink Expos (e.g. Craft Beer Festival, Motocross Events Indigenous Events (e.g. National Indigenous Boxing Food and Wine Expo) Kids Entertainers (e.g. Paw Patrol Live!) Peoples Day, Pow Wows) Gymnastics (e.g. Nationals) Wedding / Bridal Shows Magic/Illusionist Shows Youth Gatherings (e.g. WE Day, Youth Volleyball (e.g. 14U Nationals) New Parents, Baby and Toddler Expos On-Ice Theatre (e.g. Disney on Ice) Empowerment Day) Dodgeball Woman-focused Shows Indoor events themed around other statutory days Badminton (e.g. Nationals) Arts & Crafts Shows (e.g. ‘One of a Kind’) (e.g. Canada Day) Pickleball Conventions (e.g. ComicCon, Science Rendezvous) Animal / Equestrian Events Harvest Festivals Tennis Sportsmen’s Shows Holiday Festivals (e.g. Festival of Trees, Christmas Wrestling (e.g. Regional Championships for Alberta Rodeo Events Camping and RV Shows Market, Winter Carnival) Amateur Wrestling Association) Bull-riding – saddle, bareback riding Museum / Art Roadshow Exhibitions

Group Dance / Cheerleading Competitions Calf Roping, Breakaway Roping, Steer Roping, Sector/Industry-specific Recruitment Fairs (private Handball Team Roping, Goat Tying corporations) Municipal and Services Events Steer Wrestling Barrel Racing Political Rallies Exhibition/Showcase Games Pole Bending Other ‘Flat Floor’ Events Public / Community Information Events Dog Shows and Special Events (e.g. Super Dogs) Newcomers / ’Welcome to Canada’-themed events Harlem Globetrotters Esport League and Tournament Play (e.g. SKL Lipizzaner Stallions Show Volunteer and Charity Recruitment / Open Days Wrestling Events (e.g. Canadian Wrestling’s Elite, Smashfest, Get on My Level) Equestrian Show Jumping Competitions Municipality Recruitment / Open Days Legends of Wrestling, Real Canadian Wrestling, Prairie Banquets Equestrian Dressage Exhibition / Competition Emergency Services Recruitment / Open Days Wrestling Alliance) Indoor Auctions Polling Day Venue Contact Sports (e.g. Boxing, UFC and Mixed-Martial Flea Markets

Arts) Other Live Performance Events Business Conferences Extreme-Sports (e.g. BMX, Skateboard, etc.) Corporate Annual General Meetings Alumni games (e.g. AHL, NHL) Stand-up Comedy Shows College / High School Proms Celebrity Talks / Lectures College / High School Graduations Public Speakers TV commercials / filming location Psychic medium/ spiritual shows Watching Parties

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Comparable Event Days for Event Centres Examples of mid-sized venues in east and west Canada and in the United Bemidji, Minnesota: high number of core commercial event days / Abbotsford, BC: higher event days - both this and Penticton are States help book-end the range of event days for core commercial low overall attendance. managed by Spectra, demonstrating the importance of the trade show activities and also demonstrate that the event day count is one marker of function to the building – in Abbotsford the 7,000 plus seat venue caters to the potential success of a building, but it is the overall gate (attendance) Evansville, Pennsylvania (a bigger facility): fewer events but very high the trade show market, differentiating itself from the Abbotsford Tradex and the financial impacts of this that are the actual measures of success. attendance (363,000). Centre located some distance away. The research provided below is for the 2015 and 2017 calendar years and Kingston, Ontario: a good comparable at 91 events (single tenant) and Charlottetown, Prince Edward Island: An older building which is is believed to be generally representative of year-to-year performance attendance of over 205,000. contiguous with a 50,000 sq. ft. trade centre. As both are managed under while recognizing the general fluctuation in the number of events (+ / -) one entity, the trade show numbers are reported as part of the event days Penticton, BC: a single tenant building with a trade centre adjacent and that typically occurs for all venues. for the Eastlink Centre as a whole. The majority of trade events are held in connected – a lower event schedule but all trade shows are accounted for the trade centre. The Eastlink Centre also has two tenants (QMJHL hockey The core commercial events are highlighted in blue on the exhibit below, by the Penticton Trade and Convention Centre (PTCC). Together, however, and NB LC Basketball). which are then totaled for each facility for comparison purposes. the buildings play an important function in the trade and convention sector set within a campus environment.

Exhibit 17: Event Attendance Comparison (2015 and 2017)

2017 Event Totals - Bemidji (Sanford 2017 Event Totals - Evansville (Ford Center) 4,700 Seats Center) 10,000 Seats 2017 Event Totals - Cedar Rapids (USCC) 2017 Event Totals - Dodge City (UWA) Event Use Event Use Event Use Event Use Event Type Events Attendance Events Attendance Events Attendance Events Attendance Days Days Days Days Days Days Days Days Banquets 18 19 22 2,717 0 0 0 0 0 0 0 0 17 9 9 2,427 Concert 4 4 5 5,689 14 14 16 98,433 14 14 24 36,532 17 38 38 17,517 Broadway/Theatrical-Commercial000 0 000 0 000 0 000 Community/Educational Theatrical 0 0 0 0 0 0 0 0 8 7 13 25,798 0 0 0 Family Shows 5 6 10 5,891 19 19 22 60,111 9 12 39 35,077 3 14 14 4,206 Convention 2 7 8 1,351 3 8 11 34,100 0 0 0 0 1 7 7 398 Meeting/Conf 55 70 72 9,406 0 0 0 0 1 2 3 4,712 210 186 186 10,796 Consumer Show 910116,919000 0 000 0 000 0 Trade Show 5552,898000 0 000 0 000 0 Wedding Reception 9 9 11 2,034 0 0 0 0 0 0 0 0 8 21 21 1,085 Community/Civic 157 157 163 25,038 3 3 3 12,822 4 7 20 10,815 3 17 17 6,364 Sporting 58 43 43 68,289 74 78 79 179,865 46 50 90 57,339 143 115 115 38,062 Recreational Sports 5 7 7 580 0 0 0 0 9 9 20 3,917 48 66 66 8,366 Film/Movie 000 0 000 0 000 0 000 0 Internal Use 000 0 111 20000150 022 0 Total for Year 327 337 357 130,812 114 123 132 385,531 91 101 224 174,190 450 475 475 89,221

CORE EVENTS COMPARABLE 88 82 89 91,617 110 119 128 372,509 86 92 186 158,663 212 240 240 68,549

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Exhibit 17 (Cont’d) 2015 Event Totals - Wenatchee 2015 Event Totals - Kingston (K- 2015 Event Totals - St. Catharines 2015 Event Totals - Peterborough (Toyota Center) 4,300 Seats Rock Centre) 5,700 Seats (Meridian Centre) 5,300 Seats (PMC) 3,730 Seats Event Use Event Use Event Use Event Use Event Type Events Attendance Events Attendance Events Attendance Events Attendance Days Days Days Days Days Days Days Days Banquets 12 12 1,504 11 420 Concert 8812 77 25,253 22 9,001 33 Broadway/Theatrical-Commercial 114 44 12,806 66 12,376 20,600 Community/Educational Theatrical 55 5,550 11 2,250 Family Shows 224 99 7,862 11 1,757 33 Convention 33 1,000 00 0 Meeting/Conf 77 353 11 80 Consumer Show 339 44 4,924 00 0 Trade Show 4414 00 0 00 0 39 Wedding Reception Community/Civic 111 Sporting 30 30 33 47 47 135,626 56 56 164,482 54 57 158,034 Recreational Sports 4 4 8 12 12 12,180 14 14 20,157 Film/Movie Internal Use Total for Year 53 53 85 110 110 207,058 82 82 210,523 63 72 178,634

CORE EVENTS COMPARABLE 52 52 84 91 91 0 205,201 80 80 0 210,023 63 72 0 178,634

2015 Event Totals - Penticton 2015 Event Totals - Abbotsford, BC 2015 Event Totals - Charlottetown 2015 Event Totals - Kent, WA (SOEC) 4,700 Seats 7,000 Seats (Eastlink Centre), 3,700 Seats (ShoWare Centre), 6,500 Seats Event Use Event Use Event Use Event Use Event Type Events Attendance Events Attendance Events Attendance Events Attendance Days Days Days Days Days Days Days Days Banquets 44 88 2 2424 Concert 10 10 9 9 2 13 13 Broadway/Theatrical-Commercial Community/Educational Theatrical 99 Family Shows 1 1 26 26 14 31 31 Convention 22 2 Meeting/Conf Consumer Show Note: Penticton has Note: Eastlink has 1 3 15 45 56 4 12 Trade Show Trade Centre Trade Centre Wedding Reception Community/Civic 15 15 15 Sporting 38 38 47 47 56 59 59 Recreational Sports Film/Movie Internal Use Total for Year 63 65 107 137 147 146 154

CORE EVENTS COMPARABLE 59 61 99 129 130 107 115

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Hotel Development and Market Accessibility The existing supply of hotels in West Edmonton is primarily clustered projections above that associated with a base level of demand emanating around the West Edmonton Mall and along the Anthony Henday Highway from the business, MCIT (meetings, conventions and incentive travel) and Existing Hotel Market Dynamics which offers immediate access to the City of Spruce Grove. The ability to general tourism markets comprising both VFR (visiting friends and draw on demand and visitation from this area still exists. relatives) and general leisure travel. A site as well located at the Westwind As detailed in Section 4.2, Option 3 (3,500 seat event centre and lands represents a gateway destination hub. community ice pad) includes a proposed hotel to be located adjacent to Proposed Hotel Development on the Westwind Site the event centre, as previous phases of work identified the site to be The consultant team currently understands that the City of Spruce Grove strategically viable for hotel development. The challenge identified is the The consultant team has spent a considerable amount of time in Economic Development Office has received interest for hotel development degree of hotel development which can be accommodated in the Market discussions with the Westwind JV developer to ensure that the plans for from developers over the last 18 months. It is understood, that all of these Area, principally West Edmonton. both the scale of hotel development as well as the form of hotel and their discussions have centred on the opportunity for the Westwind location (as location on the site are market-achievable. The results of that informed opposed to other potential locations such as the Acheson Business Park) The hotel supply data provided in the Phase 1 and 2 reports has been discussion are two hotel properties identified for the Westwind site: firstly, due to the prospect of a multi-use sport and event centre. It has emerged updated to include development permits in West Edmonton and St. Albert a smaller, limited service hotel located within the retail mix of the Phase 2 that both the Yellowhead Highway and the event centre are critical to this that have been issued since January 2016. The existing supply in the lands, and secondly, a larger, focused-service hotel located directly location preference. The potential for yet further blends of retail and Market Area comprises 4,422 rooms, with an additional 934 rooms adjacent to the proposed event centre that comprises Option 3. destination activity – in the form of such developments as indoor proposed in West Edmonton, and 141 rooms proposed in a new 4.5-star adventure play businesses – is already apparent, again predicated on the hotel in the Campbell Business Park, St. Albert (completion is expected in The first hotel comprises the following: broader build-out of the Westwind site as a destination hub. 2019). These are presented in the following exhibit. x 88 rooms on 4 storeys (a typical footprint and scale for a Exhibit 18: Hotel Accommodation and Development within Market Area limited service, discount-branded hotel designed to service as a secondary hotel property to other larger scale product Hotel Market Dynamics within the Market Area Rooms located within a destination hub; and Total Existing Supply in Market Area 4,422 Proposed Hotels/Additional Rooms (from Jan 2016) x 152 rooms on 7 storeys, with 10,000 sq. ft. of convention West Edmonton centre-style meeting/gathering room capacity. This hotel may or may not have internal or associated full service 585 - Mistatim Way NW 125 dining capacity. 10434 - Allendale Road NW 118 6125 - Andrews Loop SW 104 The eventual form and scale of the hotels on the site will be determined by 926 - Parsons Road SW 127 the market, however the developer and the consultant team both agree that the proposed scale of development and most importantly the location 10360 - 102 Street NW 349 of main hotel-convention complex next to the event centre is a viable 6025 - Andrews Way SW 92 proposition with which to market the site. This was also confirmed by 15025 - 111 Avenue NW 13 discussion with industry experts. 10053 - Jasper Avenue NW 6 However, it is important to note that this larger opportunity is only likely St Albert to exist if the event centre (Option 3) is built, together with a second ice Chalton, Campbell Business Park 141 pad and the remainder of the Westwind site is developed along the lines Proposed Hotels/Additional Rooms Sub-Total 1075 of a destination hub. Any other form of development which does not Total: Existing and Proposed Supply 5,497 create a destination such as is the case for Option 1 and Option 2 arena development cannot be expected to generate the appropriate level of Notes: interest in hotel and convention space development. This is not to say 1. Figure based on room information available for hotels in the area (as at that an event centre patronage is sufficient on its own to generate the 2016). This figure is likely to be higher due to the unavailability of data entire demand to sustain a mid-size, focused or full service hotel – it is not regarding the total number of rooms within a few hotel establishments. – but the combination of the event centre operating as a multi-use sport 2. Existing supply figure also assumes that the 703 rooms with Development and event centre with a draw of tourists (anyone who overnights) because Permit approval identified in the Phase 2 report have been built-out in full. of the events that occur in the building and the development of a broader 3. Data for Parkland County was not available at the time of reporting. retail and entertainment hub is expected to drive demand for significant hotel development on this site. In addition, in the landscape of hotel site Source: Sierra Planning and Management based on City of Edmonton online selection, locational advantages are key in generating occupancy Development Permit data, Expedia and online search engines

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PART C: OVERALL SITE PLANNING

4 WESTWIND DRIVE SITE CONCEPT PLANNING

Relevant Context Exhibit 19: Pioneer Lands ASP Development Concept

Westwind Centre is a 58-acre development in the City’s north end at the junction of the Yellowhead Highway (Highway 16) and Century Road. The development site is envisioned to include hotels, restaurants, residential development and a broad range of individual commercial retail units. The Westwind Centre is part of a larger development initiative that includes Spruce Grove Village Area Structure Plan (ASP) and Pioneer Lands ASP. The Westwind Centre falls within the Pioneer Lands ASP. WESTWIND

Proposed Concepts for Commercial Build-Out of Westwind Centre

Over the duration of the project process, the consulting team has been in consultation with the developer of the Westwind Centre, One Properties Inc. (formerly WAM) in order to ensure that the two complementary projects move along in tandem. Placement of an event centre / arenas on the Westwind Centre site should complement and enhance the commercial activity within the broader development site and seek to minimize any conflicts caused by parking issues associated with hosting major events. The preliminary concepts for the ultimate build-out of the broader Westwind Centre site are provided on the following pages and detailed in the Appendix. Two versions are shown – one that includes the 2,500-seat arena and community ice pad, which proposes a lower density retail and showroom/warehousing offer, and the other option showing the 3,500- seat event centre and community ice pad which proposes a higher order retail offering. Option 1 (Community Twin Pad) has not been shown as an option on the Westwind Centre site since it is not the highest and best use of a commercial development site and would be more appropriately Source: Sierra Planning and Management based on Pioneer Lands Area Structure Plan, City of Spruce Grove, 2018. located elsewhere.

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Distinction Between Concepts The baseline concept associated with a 2,500 seat arena is the expected Exhibit 20: Westwind Site Concept Comparison development for the remaining (now phase 3 lands) at the site. This reflects a range of similar developments in the area and is a mixed-use Concept 1 (LOWER ORDER DEVELOPMENT) Gross Site Area Gross Site Area Building Area Assessment Value retail/ lower order showroom/warehousing (including internal and Category of Use in Acres in Sq. Ft. in Sq. Ft. external storage) district which complements the retail to the south and is Total Retail Site Area 21.54 938,282 128,897 $54,396,206 buffered by existing offices on site which offer a transition from retail to Total Office Site Area 3.00 130,680 57,432 $17,434,714 quasi-industrial. In this circumstance the development of an arena with an expanded seat count to 2,500 seats is appropriate but is unlikely to change Total Showroom/Warehouse/Flex Site Area 14.93 167,270 292,658 $67,729,423 the development program. It is not possible to conclude that higher order Total Residential Site Area 13.61 592,852 - $49,010,000 development is not possible in this scenario, but it is far less likely based Total 46.87 2,041,657 478,987 $188,570,343 on market realities than is the case with a destination development in the Concept 2 (HIGHER ORDER DEVELOPMENT) Gross Site Area Gross Site Area Building Area Assessment Value form of a multi-use community sport and event centre that draws upwards Category of Use in Acres in Sq. Ft. in Sq. Ft. of 100 spectator and participant events per year, as well as the full Total Retail Site Area 21.54 938,282 158,622 $69,237,206 complement of community functions. Total Entertainment Site Area 4.88 212,573 31,500 $8,100,000 In the latter concept there is believed to be a significant potential for uplift Total Office Site Area 3.00 130,680 57,432 $17,434,714 in the form of development – not dramatically so in terms of the gross Total Hotel Site Area 3.84 167,270 179,258 $26,697,143 floor area scale, but certainly in terms of the type of uses. These are uses Total Residential Site Area 13.61 592,852 - $76,820,000 that orient toward and cluster around primary destinations (or demand Total 46.87 2,041,657 426,812 $198,289,063 generators). These are hotels, other entertainment uses, restaurants and the potential for more. This plan – the second concept designed around Source: One Properties Inc. the 3,500 seat multi-use event centre - has two hotels included in the long- term plans. Based on the market research undertaken and detailed conversations with the developer, as well as the experience of the City in addressing developer enquiries, this concept plan is deemed both realistic in terms of scale and anticipated timing of build-out following the decision to construct the event centre. Most importantly, while the assessment overall is not discernably different, this is in the abstract – there is a time dimension which renders the first concept with a non-destination appeal as the most likely scenario in the absence of a multi-use sport and event centre. This build-out is longer in the making – potentially 10 years based on our analysis or longer. By contrast the destination-oriented plan of the second site plan provides a realistic building out scenario within a shorter period.

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Exhibit 21: Preliminary Westwind Centre Concept for Option 2 - 2,500 Seat Arena and Community Ice Pad showing Lower Order Development WITHOUT PREJUDICE

Source: One Properties Inc. CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 40

Exhibit 22: Preliminary Westwind Centre Concept for Option 3 - 3,500 Seat Event Centre and Community Ice Pad Showing Higher Order Development WITHOUT PREJUDICE

Source: One Properties Inc.

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Parking and Traffic Impact Assessment Transportation Planning The Draft 2018 Pioneer Lands Area Structure Plan (ASP)’s Transportation Parking Demand Assessment Network identifies arterial and collector roads, designed for the efficient In order to determine the parking requirement for an event centre and movement of traffic throughout the local community. community ice pad, the consulting team has broadly estimated the Westwind Drive, being a collector road and the southern border of the demand for on-site parking based on high-level assumptions related to the Westwind Centre site, will be the main route to access the site from number of patrons expected at the facility, modal split and vehicle Century Road. Connection with Pioneer Road allows for an alternative occupancy. north / south route for accessing the Westwind Centre Site from the east. The demand for parking at a 3,500-seat event centre has been assessed as follows. It is anticipated that the 2,500-seat arena option would need similar parking capacity for hockey but would not have the same event Exhibit 24: Pioneer Lands Transportation and Open Space Plan types for larger crowds. Accordingly, the size of parking for Option 2 has been reduced.

Exhibit 23: High-Level Parking Demand Assessment – Event Centre

EVENT CENTRE WESTWIND Hockey Concerts SITE Seating 3,500 5,000 Playoffs / Sell Out Seating 3,750 (standing 5,000 room for 250) Average Attendance 1,200 2,610 Average Modal Split 95% cars 95% cars Playoffs / Sell Out Modal 95% cars 90% cars Split Average Vehicle Occupancy 2 patrons 3.5 patrons Playoffs / Sell Out Vehicle 2.5 patrons 3.5 patrons Occupancy Average No. Cars 570 cars 678 cars Playoffs / Sell Out No. Cars 1,425 cars 1,286 cars

Exhibit 23: High-Level Parking Demand Assessment – Community Arena COMMUNITY ARENA No. Teams 4 at one time No. Team Players (minors) 15 / team No. Coaches 5 / team Total Cars 20 cars / team Average Modal Split 100% cars Average No. Cars 80 – 100 cars Source: Sierra Planning and Management based on Pioneer Lands Area Structure Plan, City of Spruce Grove, 2018 (Draft). Note: These are overall demand estimates only; Provision of “off-site” parking as may be determined possible or otherwise for major events will impact extent of “on-site” versus “off-site” demand.

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Traffic Impact Assessment Land Area Required for Arena Complex

In 2010, as part of the design process for the Westwind Centre site, a high- While the three options vary in function and form, the land required for level traffic impact assessment (TIA) was completed by Al-Terra each complex type is a product of these variations. The land requirements Engineering Ltd., a transportation engineering firm. For the purpose of (in acres) for ‘Park and Ride’ facilities and the ice / arena buildings are as this study, an update to the original traffic impact assessment has been follows: completed which takes into consideration the inclusion of a commercial event centre and community arena on the site. This updated assessment Option 1 Option 2 Option 3 is based on the original plan developed in 2008 with consideration for how Park and Ride 2.50 2.50 2.50 the proposed facility would affect the impact on traffic. As a result of the Arena / Event Centre 4.56 9.16 10.75 updated traffic impact assessment, a Technical Memorandum was issued Total (Acres) 7.06 11.66 13.25 and forms part of the Appendices.

A comparison of trips generated for the AM and PM peak periods for the Further details and drawings showing the land areas required for each of Event Centre concept as compared to the commercial development the three options are provided in the relevant sections of this report originally contemplated is as follows: (Sections 5 through 7) with the facility floor plans and renderings.

Exhibit 25: Trip Generation Comparison AM Peak PM Peak Comparison of Functional Space Program Event Centre Land Uses 178 283 Commercial Land Uses (as per 2010 TIA) 155 708 The design plans, as presented within this report, have been developed to Difference +23 -425 a conceptual level, and will be refined as the project moves forward, incorporating any suggestions or refinements required by the City and Source: Sierra Planning and Management based on Al-Terra Engineering Ltd. possible stakeholders or partners. Memorandum Re: Proposed Westwind Event Centre – High Level Traffic Assessment The adjacent matrix provides a side-by-side comparison of the proposed building program that is to be included for each of the three options. This enables a more detailed comparison for each of the discreet items In summary, the following key conclusions were reached: proposed within each of the facilities relating to size, number, and specifications, as relevant. When compared to the 2010 analysis undertaken, which anticipated commercial development in place of the Event Centre facility, the As the functional space programs vary considerably for the three options, estimated trips in the AM peak were marginally higher with an event the corresponding square footage of the facilities varies also, as centre. summarized below: In the PM peak, the inclusion of the Event Centre resulted in a significantly Option 1: Twin Pad Arena 95,372 sq. ft. reduced typical number of trips, which would improve operations of the Option 2: 2,500 Seat Arena and Community 123,950 sq. ft. surrounding road / intersection network. Ice Pad Therefore, there are no adverse traffic impacts resulting from the inclusion Option 3: 3,500 Seat Event Centre and 143,356 sq. ft. of an Event Centre on the Westwind site when compared to the Community Ice Pad commercial development proposed previously. Is should be noted that this analysis does not account for the planning of major events that may occur at the Event Centre. Planning and designing road infrastructure to accommodate these large events is not best practice, but rather focusing on employing alternative forms of traffic control during these heavy flow times.

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Exhibit 26: Functional Space Program Comparison

Concessions and Circulation Space Example: 1st Bank Centre, Colorado

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Locker Rooms Example: South Okanagan Event Centre, British Columbia

Hospitality Suites Example: Town Toyota Center, Washington

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5 OPTION 1: TWIN-PAD ARENA

5 OPTION 1: TWIN-PAD ARENA Functional Program and Design

The refined design for a Twin-Pad Arena facility, while still conceptual, responds to the general requirements of a community facility. The program of spaces for a Twin-Pad Arena includes the following: Exhibit 27: Option 1 - Twin-Pad Arena Functional Program Event Level x 2 NHL-size ice rinks (85’ x 200’); x Lobby with customer service desk, skate sharpening, and general office space; x Viewing / flexible meeting space; x 12 player locker rooms; x 2 referee locker rooms; and x Support spaces (i.e. washrooms, storage, etc.). Mezzanine Level x Upper lobby area; x Precast seating; x Viewing lounge; and x Support spaces (i.e. washrooms, mechanical room, etc.). Space allocations for each element are detailed in the adjacent exhibit. Overall site plans, floor plans and illustrative architectural renderings are provided on the following pages.

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OPTION 1: TWIN PAD ARENA PROPOSED OVERALL SITE PLAN

Note: Depending on arena site location, the Park & Ride may not be located adjacent to the Twin Ice Complex.

220 parking 201 parking

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OPTION 1: TWIN PAD ARENA OptionPROPOSED 1 – Floor Plans FLOOR PLANS

EVENT LEVEL PLAN MEZZANINE LEVEL PLAN

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OPTION 1: TWIN PAD ARENA ILLUSTRATIVE PERSPECTIVES

AT-GRADE VIEWS OF ENTRANCE ACROSS PARKING

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Regional and National Examples of Twin Pads

Examples of best practice in twin-pad design and functional program are provided in this section, both within the regional context of central Alberta as well as on a national scale. These community-based facilities are not typically located on commercial sites - such as the One Properties site - which have a higher land value but are often situated on industrial lands or other areas of lesser value.

Lewis Farms Centre, Edmonton, AB

Date Opened: Currently in design phase; estimated to open in 2022

Cost: $215 M (includes library and district park)

Seating Capacity: Rink 1: 490 (fixed) Rink 2: 224 (fixed)

Amenities: • 2 NHL size community rinks • Aquatic Centre • Fitness Centre and studios • Gymnasiums (1 double, 1 single) • Climbing wall • Multi-purpose rooms

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Great Plains Recreation Centre, Calgary, AB

This facility is owned by the City of Calgary and operated by Canlan Ice Sports.

Date Opened: 2016

Cost: $33 M

Area: 88,000 sq. ft.

Seating Capacity: Rink 1: 300 (fixed) Rink 2: 300 (fixed) Amenities: • 2 NHL community rinks • Meeting rooms • Fitness studios • Pro shop • Dryland training space • Concession

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INVISTA Centre, Kingston, ON

While this is a four-pad facility, the principles of design, functional program and location remain the same as it is a community-focused facility.

Date Opened: 2008

Cost: $34 M

Area: 180,000 sq. ft.

Seating Capacity: Rink 1: 750 (fixed) Rink 2: 300 (fixed) Rink 3: 300 (fixed) Industrial Land Rink 4: 300 (fixed) Uses

Amenities: • 4 NHL community rinks • Multi-purpose rooms • Fitness Centre • Pro shop • Concession • Artificial turf field with rubberized running INVISTAINVISTA CCentreentre track and spectator seating for 700 people • Throwing field

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Scotiabank Pond Arena, Toronto, ON

This four-pad facility is located at Downsview Park in North York, which is currently owned by the Federal Government of Canada. The facility employs the principles of design, functional program and location for a community-focused facility and is part of a campus for sporting and athletic excellence within the Park.

Date Opened: 2013

Cost: Unknown

Area: 150,000 sq. ft.

Seating Rink 1: 1,000 (fixed) Capacity: Rink 2: 500 (fixed) Rink 3: limited bench seating Rink 4: limited bench seating

Amenities: • 4 NHL community rinks • Sports-related offices • Pro shop • Weight and cardio training facilities • Concession / pub

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Capital Costs Exhibit 28: Capital Cost Estimate for Option 1 – Twin-Pad Arena

Two contractors with significant experience in the event centre and arena construction industry were selected to provide preliminary cost estimates based on the initial design elements created for all three options. Contractors were asked to provide a detailed breakdown of costs by construction division, provide their estimate for General Conditions and their construction management fee, establish a construction contingency as well as providing estimates for insurance and bonding costs. The consulting team then established a fee for the architectural and engineering services as well as project and program management services and added those amounts to a “Soft Cost/Professional Fees” line item. Finally, a comprehensive list of Furniture, Fixtures and Equipment (“FFE”) was developed to cover all necessary items to effectively operate each of the three facility options. A total project cost estimate was then developed for each option from each contractor with respect to Soft Costs; Architectural, Engineering, Project and Program Management; Overall Construction Capital Costs; Costs Associated with Construction and FFE. Each of the two final cost estimates were then placed “side by side” for comparison purposes for each of the three options. These are provided in the respective section of the report relating to each option. The adjacent exhibit shows the capital cost estimates for Option 1: Twin- Pad Arena. Further details, including a breakdown of costs by line item, are provided in the appendices.

Operating Performance

The indicative operating performance of Option 1 is provided in Section 7.3 which provides a comparison to the Event Centre operating financial performance.

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6 OPTION 2: 2,500 SEAT ARENA AND COMMUNITY ICE PAD

6 OPTION 2: 2,500 SEAT ARENA AND COMMUNITY ICE PAD Functional Program and Design Exhibit 29: OPTION 2 – 2,500 Seat Arena and Community Ice Pad Functional Program The conceptual design for the 2,500-seat arena and Patron Facilities Players/Performers/OfficialsOption 2 Option 2 community ice pad identifies the various spaces required Spectator Seating Visitor's Lockers General Precast Fixed Seating 11,000Visitor Locker Rooms 6 LR 2250 within the building. The refined planning, while still 11,000 2,250 conceptual, responds to the general requirements of a Facility Circulation Home Lockers Concourse Includes both levels if applicable 20,000Home Locker Rooms 1 LR 2500 2,500-seat arena and community ice pad. Lobby / Vestibule / Viewing Areas 1,950Skate Sharpening 150 21,950 2,650 Public Toilets Practice Lockers Practice Locker Rooms 6 LR 3000 The program of spaces for this facility includes the following: Patron Women's Toilets 2,540 3,000 Patron Men's Toilets 2,420Star Lockers / Green Room Event Level Family (Unisex) Toilets Single use for patrons requiring assistance or children w/ parent 150Star Locker Rooms 2 LR 700 5,110 700 Hospitality Services / Amenities Referee Lockers x 2 NHL-size ice rinks (85’ x 200’); Club / Lounge / Party Rooms 1,500Referee Locker Rooms 2 LR 800 x Lobby, vestibule and entrance area; Suites 12 Suites 3,500 800 5,000 9,400 x Food and beverage concession; Event Support 43,060 Option 2 Food/Merchandise EventOption Area 2 x 6 visitor’s locker rooms; Food Sales Hockey Floor 2 Sheets 34,000 Food & Beverage Concessions One POS/200 patrons proportionally distributed 2,500 34,000 x 1 large home team locker room; Loading Storage 2,500 x 6 practice locker rooms; General 2,500 Storage Includes workshop 5,500 Media / Meeting Facilities OptionLoading 2 / Staging Area Near docks & floor entry 1,000 x 2 star locker rooms; Broadcast Facilites 6,500 Sound / AV Room 500 40,500 x 2 referee locker rooms; and Administrative 500 Option 2 x Support spaces (i.e. washrooms, general office Media Support Building Administration Viewing / Flex / Meeting Room Can be divided into multiple rooms or opened into one 1700General Office Space 2000 space, storage, etc.). 1,700 2,000 Ticketing 2,200 Ticket Sales 480 Suite Level (Main Arena) Ticket Office 400 880 2,880 x Precast seating; Building Support Option 2 Building Services x 12 suites; Mechanical Rooms Will be programmed and laid out on event level of all options 6,000 x Club / lounge / party space; 6,000 6,000 x Media support space. Program Net Totals 106,540 General SF General Circulation, Shafts, Walls, Misc. Program, etc. 17,410 Overall site plans, floor plans and illustrative architectural Program Gross Totals 123,950 renderings are provided on the following pages.

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OPTION 2: 2,500 SEAT ARENA PROPOSED OVERALL SITE PLAN AS PART OF LARGER DEVELOPMENT SITE

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OPTION 2: 2,500 SEAT ARENA PROPOSED OVERALL SITE PLAN

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OPTION 2: 2,500 SEAT ARENA

PROPOSED EVENT LEVEL FLOOR PLAN

EVENT LEVEL PLAN

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OPTION 2: 2,500 SEAT ARENA PROPOSED MEZZANINE LEVEL FLOOR PLAN

MEZZANINE LEVEL PLAN

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OPTION 2: 2,500 SEAT ARENA ILLUSTRATIVE PERSPECTIVES

TOP: AT-GRADE VIEW LOOKING ACROSS PARK

BOTTOM: AT-GRADE CLOSE UP VIEW

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Exhibit 30: Capital Cost Estimate for Option 2 – 2,500 Seat Arena and Community Ice Pad Capital Costs As identified in Section 5.3, the following estimates of capital costs have been provided by two contractors with experience in the development of facilities of this type. The figures are based on preliminary cost estimates for the initial design elements created for all three options. The adjacent exhibit shows the capital cost estimates for Option 2: 2,500 Seat Arena and Community Ice Pad. Further details, including a breakdown of costs by line item, are provided in the appendices.

Operating Performance

The indicative operating performance of Option 2 is provided in Section 7.3 which provides a comparison to the Event Centre’s operating financial performance.

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7 OPTION 3: 3,500 SEAT EVENT CENTRE AND COMMUNITY ICE PAD

7 OPTION 3: 3,500 SEAT EVENT CENTRE AND COMMUNITY ICE PAD Functional Program and Design Exhibit 31: OPTION 3 – 3,500 Seat Event Centre and Community Ice Pad Functional Program

The conceptual design for the 3,500-seat arena and Patron Facilities Option 3Players/Performers/Officials Option 3 community ice pad identifies the various spaces Spectator Seating Visitor's Lockers General Precast Fixed Seating 13,300 Visitor Locker Rooms 6 LR 2250 required within the building. The refined planning, Club Seats/Lounge 2,250 while still conceptual, responds to the general 13,300Home Lockers Facility Circulation Home Locker Rooms 1 LR 2800 requirements of a 3,500-seat event centre and Concourse Includes both levels if applicable 20,000 Skate Sharpening 150 Lobby / Vestibule / Viewing Areas 2,750 2,950 community ice pad. 22,750Practice Lockers Public Toilets Practice Locker Rooms 7 LR 3500 The program of spaces for this facility includes the Patron Women's Toilets 3,000 3,500 Patron Men's Toilets 2,500 Star Lockers / Green Room following: Family (Unisex) Toilets Single use for patrons requiring assistance or children w/ parent 150 Star Locker Rooms 2 LR 700 5,650 700 Hospitality Services / Amenities Referee Lockers Event Level Club / Lounge / Party Rooms 3,500 Referee Locker Rooms 2 LR 800 Suites 12 Suites 3,500 800 x 2 NHL-size ice rinks (85’ x 200’); 7,000 10,200 Flex Space Event Support Option 3 x Lobby, vestibule and entrance area; Flex / Auditorium Can be divided into multiple rooms or opened into one 4000 Event Area x Food and beverage concession and kitchen; 4,000Hockey Floor 2 Sheets 34,000 52,700 34,000 x Flexible / auditorium space; Food/Merchandise Option 3Loading Storage Commissary General Storage Includes workshop 7,000 x 6 visitor’s locker rooms; Offices- Food Office space for the commissary administrative needs 2000 Loading / Staging Area Near docks & floor entry 2,000 x 1 large home team locker room; Catering Kitchen Near/accessible to freight elevator & food sales 500 9,000 2,500 43,000 x 7 practice locker rooms; Food Sales Administrative Option 3 Food & Beverage Concessions One POS/200 patrons proportionally distributed 3,000 Building Administration x 2 star locker rooms; 3,000General Office Space 2400 Merchandise x 2 referee locker rooms; and 2,400 Retail Kiosk 800 Ticketing 800 x Support spaces (i.e. washrooms, general office Ticket Sales 480 6,300 Ticket Office 400 space, storage, etc.). Media / Meeting Facilities Option 3 880 Broadcast Facilites 3,280 Radio Broadcast 150 Building Support Option 3 Suite Level (Main Arena) TV Booth 150 Building Services Sound / AV Room 800 Mechanical Rooms Will be programmed and laid out on event level of all options 7,500 1,100 x Precast seating; 7,500 1,100 x 12 suites; 7,500 Program Net Totals 124,080 x Club / lounge / party suite; and General SF General Circulation, Shafts, Walls, Misc. Program, etc. 19,276 x Broadcasting facilities. Program Gross Totals 143,356 - Scope Breakouts Option 3 Potential Additional Space The conceptual design and functional program Modular Addition Team Office / Sports Academy 16000 allows for the modular addition of office space / 16,000 Scope Breakouts Totals 16,000 sports academy at the suite level. Overall site plans, floor plans and illustrative architectural renderings are provided on the following pages.

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OPTION 3: 3,500 SEAT EVENT CENTRE PROPOSED OVERALL SITE PLAN AS PART OF LARGER DEVELOPMENT SITE

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OPTION 3: 3,500 SEAT EVENT CENTRE PROPOSED OVERALL SITE PLAN

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OPTION 3: 3,500 SEAT EVENT CENTRE PROPOSED EVENT LEVEL FLOOR PLAN

EVENT LEVEL PLAN

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OPTION 3: 3,500 SEAT EVENT CENTRE PROPOSED SUITE LEVEL FLOOR PLAN

SUITE LEVEL PLAN

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OPTION 3: 3,500 SEAT EVENT CENTRE ILLUSTRATIVE PERSPECTIVES

TOP RIGHT: AT-GRADE VIEW OF EVENT CENTRE ENTRANCE (WITH HOTEL)

BOTTOM RIGHT: AT-GRADE VIEW LOOKING ACROSS PARK (WITHOUT HOTEL)

BOTTOM LEFT: AERIAL VIEW LOOKING ACROSS PARK AND PARKING LOT (WITH HOTEL)

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Capital Costs

As identified in Section 5.3, the following estimates of capital costs have Exhibit 32: Capital Cost Estimate for Option 3 – 3,500 Seat Event Centre and Community Ice Pad been provided by two contractors with experience in the development of facilities of this type. The figures are based on preliminary cost estimates for the initial design elements created for all three options. The adjacent exhibit shows the capital cost estimates for Option 3: 3,500 Seat Event Centre and Community Ice Pad. Further details, including a breakdown of costs by line item, are provided in the appendices. Optional Modular Office Addition The conceptual design for Option 3 provides for an optional modular addition of 16,000 square feet for office / tenant lease space (2nd floor). It is important to note that these costs are not included in the capital cost estimate and would be in addition to the project cost presented in the adjacent exhibit. These costs have been estimated by the contractors to be in the range of $2.9 to $3.4 million, resulting in the following grand total project costs (including the addition): Item Contractor A Contractor B Total Project Costs $64,014,405 $61,582,403 Optional Modular Office Addition $2,960,000 $3,366,040 Grand Total Cost with Addition $70,033,405 $68,007,442

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Operating Performance share of the City. This area is also subject to further consideration with Contrasting with lower revenues from events are certain savings such as respect to the share of revenues from concessions for the event staffing costs, lower custodial services and other savings. Higher The assessment of operational performance of either option 2 or 3 will be team. However, this consideration is identical in both Options 2 and 3 revenues from community ice are possible but lower revenues from impacted by decisions with respect to the management of the facility as such that it has no impact on the delta difference between these options. sponsorship are likely. well as the licensing agreement that is ultimately reached with the Spruce Accordingly, it does not alter conclusions arising from this schematic assessment of operational performance. Regardless, it is very likely that because the 2,500 seat option seeks to still Grove Saints. At this time, the primary purpose of any financial operational operate in the events market despite the limitation of the building, third assessment is to convey the directional differences between the 3 options The 2,500 seat option will have greater challenges in performing as a party management costs are warranted for comparison purposes – under review. Using the existing proforma for the 3,500 seat event centre multi-use event centre. The economic impact discounted the concert regardless of whether this route is chosen for any of the options at the end which represents a well-tested and carefully assessed picture of revenues market entirely because the economic impacts are greatest from these of the day. For analytics it needs to be on a comparable basis and the and costs based on expected event days and a prior series of assumptions events and it is likely therefore that Option 2 will have considerably less operation of the events market in Option 2 requires that cost to be carried as to revenue splits between the building and the team, this is used to impact than Option 3 (not because of the seating count but because it to be a true comparison to Option 3. compare to the deficits arising from Option 1 (twin pad) and Option 2 represents an arena not a multi-use event centre). As we have noted, a (2,500 seat arena). 2,500 seat multi-use event centre could be constructed but that offers The revenues and costs for the 3,500 seat venue retain the full costs and little value for money relative to a 3,500 seat option nor is it substantially revenues for concessions and the effective margin representing just under cheaper (it will be more expensive than the arena priced in this exercise). 22% of gross revenues or just under 30% of gross costs. If the City However, in the financial assessment we have carried 1/3 of the events of manages the concessions then these levels may be achievable but if there the 3,500 option so as not to hedge the risk that some events do occur is a recourse to a concessionaire, there will be a reduction in the revenue over time – this is a conservative assumption. It is likely that the deficit for the 2,500 arena will be substantially higher.

Exhibit 33: Event Centre Operating Performance Comparison

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8 ECONOMIC IMPACT ASSESSMENT Overview Range of Measures

The results of this analysis should be treated as a guideline to the Without consideration to development of arenas as part of bigger urban economic impact of the options based on the range of assumptions, regeneration projects (the Ice District development in the City of providing the environment remains stable and that normal business cycles Edmonton as the latest example) the construction-related economic are assumed to occur. It also assumes that the City of Spruce Grove impacts are based on the costs to develop the arena itself. Similarly, the continues to actively support development and define the City as a operation of a multi-use centre (based on the costs and revenues destination, enhancing the public realm, and facilitating regeneration of generated inside the venue) can also be readily estimated. So too can off- the City’s downtown as well as fostering greenfield development. site expenditures but this requires a consideration of the propensity of the surrounding area to capture the available trade from the event centre- Public policy decisions above and beyond the decision to invest in a new goers. Are there sufficient hotels and service providers in the surrounding facility can be expected to influence how much of a contribution such area, for example? public infrastructure can make to localized economic development. Evidence from elsewhere demonstrates that impacts are maximized only where wider public investment and policy decisions are moving in the Exhibit 34: Ideal Range of Measures same direction. While there are significant impacts which can be estimated (our proformas on event days, visitation and spending are the inputs to this) it is also important to recognize that economic impact is less about the number than it is about the stimulus that significant investment in public infrastructure can have on investor confidence and building activity.

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Net Impact and Geographic Scale We therefore do not breakdown our estimates into diversionary versus net Direct Impact Direct effects are associated with immediate changes incremental additional impact, but rather report spending, GDP, in demand generated by employment, personal and The report identifies “net” impact and “substitution” effects. Both are employment and other measures which, by virtue of the analysis rests household income, government expenditures, and related in that an assessment of net economic benefit (or cost) associated upon reasonable assumptions of same day versus overnight visitors. private and public capital investment. This includes with the development of a major municipal capital facility should take into investment in construction, the spending and wages in account the potential for diversionary impacts – spending and investment the facility, and the spending outside of the facility by that existed elsewhere in the economy, but which is diverted to the new patrons. Direct impacts can be measured in a number facility (e.g. entertainment spending) rather than representing new Accounting for Greater Visitation of ways – all of which are alternatives and not expenditure to the region. In this case, we define existing spending as The spending of patrons is expected to increase both for existing residents cumulative measures. These include: total spending, that which could reasonably be assigned to existing patrons and more as well as out-of-town visitors. Gross Domestic Product (GDP), income, employment precisely still, those who reside in the market area. We are therefore also and of other related measures such as sales and concerned with the geographic scale of impact and recognize that there x More off-site spending: Out-of-town patrons are more likely to go income taxes generated. Direct investment and will be some substitution effect related to a new facility as it draws to a restaurant before a game, more likely to go out for a snack or employment will create iterative rounds of income, spending from other centres in the Province. beverage, more likely to shop in the immediate area, and more employment creation and spending. These multiplier likely to partake in a tourist activity. This assessment anticipates an impacts are referred to as indirect effects and induced The scales of analysis within this report recognize the reality of impacts increase in out-of-town visitation related to the operation of the impacts. which transcend municipal borders. Hence, the assessment of economic event centre. Indirect effects essentially are inter-industry impacts. impact at a sports and entertainment facility must be viewed on a number Indirect Impact Changes in employment, household income, of geographic scales. The scales of analysis, in general, move from the x More guests: Likewise, a facility of this nature is expected to governmental expenditures, and private and public National, Provincial and region-wide perspective. attract more out-of-town guests to future games hosted in the capital investment added from industry purchases of City. all items needed to furnish a product or service are Net impact will be greatest for the multi-use event centre and lowest for a measured. Indirect effects measure the impacts of community twin-pad. Regardless, the most important measure of impact As a result of the new facility (as indicated by evidence elsewhere) this will these purchases. in terms of local economic development is the likely scale of so-called off- likely increase the proportion of overnight visitors to Spruce Grove – in site expenditure from visitors – spending that happens because of a part related to new events able to be accommodated within the proposed In terms of the employment impacts during decision to visit the facility. This spending has most impact where the MUSEC – and will certainly increase the visitor draw to the area, and construction, indirect employment refers to the person comes from outside the local area but spends locally. Again, hence, spending in the area. This likelihood is factored into the spending employment created in other industries which supply municipal boundary-specific analysis is not accurate nor advisable, but it is analysis. the materials (goods) and other inputs (services) important to generally distinguish between impacts which are more likely necessary for the construction work. In terms of the spending which otherwise would have occurred locally and that which is ongoing operations of any facility or surrounding net new to the local area (generally defined). business, indirect impact relates to employment Definition of Terms created in businesses which supply goods and services In the case of the Spruce Grove Saints, an increase in patronage at a new necessary for the ongoing operations of the business. arena challenges us to determine if this increment is new spending that is Several measures of impact assessment including direct, indirect and taken from elsewhere outside of the region or is likely just spending that is induced effects are employed in the analysis which follows. These terms Induced Impact Input-Output modeling also can potentially estimate then lost somewhere else in the locality – the answer is that we don’t are briefly described as follows. induced effects. Induced effects are changes in know, nor can we. A decision to attend a game by a new customer may spending patterns of households caused by changes in well result in a decision to dine out occasionally before a game, while household income generated by direct and indirect having no impact on their existing spending habits. For others, there may effects. These new expenditures are reintroduced into be a diversionary effect. What is clear however is that, locally-speaking, if the economy as a new demand and are more diffused a patron is a tourist for example (defined as someone who travels more across the national economy. Given this, we focus on than 40km on an occasional basis), their spending is generally considered the direct and indirect impacts which have a greater net additional. regional impact.

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For options 2 and 3 there are some additional relevant assumptions as respond to the demand generated by visits to the event centre that is a follows: determining factor.

Estimation of Facility Economic Impacts from Operations For this reason, it is entirely accurate to reflect that public policy (land use policy, development friendly municipal polices and operations), and a The impact of operational spending can be assessed from several commitment to developing a range of tourism demand generators perspectives including the total flow through of revenues and expenses to (destinations) has a big impact on the degree to which impact can be the facility, as well as the tenant teams, event promoters and others who retained locally. For this reason, projects such as a new spectator venue stage events. Given that the focus is on local economic development a are interwoven and intricately related to the ultimate success of local more reasonable approach is to focus on the impacts arising from the economic development efforts. facility operations itself. The employment generated by the operations of the facility expressed in terms of total full-time equivalent (FTE) is Broader Site Development estimated. The arena / event centre complex is part of a 58-acre area development Capturing Spending Locally plan comprising office, retail, commercial and residential uses. Patronage to the facility is linked to broader site development which is expected to The proportion of patrons categorized as same day visitors and overnight encompass hotel accommodations and a range of complementary food visitors differ by category of event. and beverage, entertainment and retail services to support overnight and same-day visitation at the facility. This however is expected only in the Exhibit 35: Percentage Patrons as Overnight Visitors circumstance of the development of a multi-use sport and event centre capable of hosting a range of commercial ticketed as well as a broad range Event Type Percentage Patrons of participatory events and other community gatherings. Overnight Visitors AJHL Hockey 5% An arena which is unable to generate a definable position within the Tournaments 50% metropolitan market place for the full range of non-sport commercial Non-AJHL Sporting Events 15% events is far less likely to stimulate the surrounding land development. Concerts/Family Shows 30% The differences between the anticipated site plans for commercial Trade Show/Community Events 10% residential development in the vicinity, and the form, nature and scale of development are explained in Section 4.2. The resulting economic impact differential is explained in the economic impact schedules summarized for The analysis of local/market area capture of off-site spending assumes a Options 2 and 3 in Sections 8.5 to 8.7. capture rate of 95%, recognizing a potential leak of off-site spending outside of the market area. In interpreting this, we are referring to There is relatively little difference between the options as it relates to the capture of expenditures in-region only in respect of people who visit the impacts of construction and the number of jobs created on the site – in new event centre as their primary trip motivator. Accordingly, for the part because Options 2 and 3 share the same existing development types of spending categories included in this analysis (which includes hotel, comprised in Phases 1 and 2 of the Westwind Plan. They differ in terms of food and retail, but excludes transportation costs), it is reasonable to the Phase 3 build-out which under Option 2 reverts to the expected assume a high capture rate for the market area as the destination region. marketplace for this location – a range of flexible warehouse, showroom The regional off-site spending estimates are presented for Options 2 and 3. style development benefitting from higher exposure and proximity but which do not represent the kind of consumer oriented/experience- The ability to capture demand that exists for off-site expenditure is a oriented development that is generated by a full multi-use sport and event critical determinant of success – and it doesn’t happen overnight. In the centre (Option 3). context of downtown regeneration, the depth of commercial investment that already exists can help ensure the impacts of a major public Crucially however, there is a large difference between these options in infrastructure project are maximized in as short a period as possible. terms of their timing of construction and job gains – a much longer build- out if the multi-use sport and event centre does not drive the surrounding The facts of downtown regeneration are evident even if the precise higher order development. contribution of an event centre is not entirely clear. In the smaller markets, it is the capacity of the service economy in the local area to Even more importantly, there is a large taxation differential between the two options.

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Option 1: Twin Pad Arena Exhibit 36: Economic Impact Example for a Twin-Pad Ice Facility

Option 1, comprising a community twin-pad arena, is not assumed to TWIN ICE - EXAMPLE: CHARLOTTETOWN PEI (SIERRA ANALYSIS 2015) necessarily occur on the Westwind site given the value of those lands for Event Visitors Off-Site Spending Impact Estimates development (even in a lower value form of development) and the Analysis of Potential Economic Impact on Charlottetown Region community-oriented nature of the twin-pad. Its economic impact value is apparent (see adjacent exhibit) but its likely net incremental benefit to the Regional Capture of Off-Site Spending: Bell Aliant Centre (Excl.Pool) Total Annual Expenditure by Category local area is not as great as for either of the larger, hybrid spectator- Expenditure by All Visitors Total Annual community event buildings in Options 2 and 3. Both of these facilities are Food & All Events Retail & Other Accom. Expenditure more appropriately located on the Westwind lands and their economic Beverage impact warrants the use of this land for public (non-assessment A: Annual Bell Aliant Centre Events $682,493 $760,788 $1,057,121 $2,500,402 generating) land use. The community arena does not. B: Hockey School Tournaments $132,489 $149,194 $187,303 $468,986 Camps $944,773 $1,082,643 $1,112,759 $3,140,175 The impact for the community arena is provided by way of an example of C: Non-Annual Events $993,234 $1,116,659 $886,352 $2,996,245 original work conducted by Sierra Planning and Management for a similarly RESULTS INCLUDING HOCKEY SCHOOL scaled twin pad facility. We have not provided construction impacts or Total Annual Direct Expenditure $2,752,989 $3,109,285 $3,243,535 $9,105,809 impacts arising from the modest employment at the building, focusing Total Annual Indirect Expenditure (on-Island instead on the long term annual economic impact arising from visits to the arena. Outlined is the off-site impacts for the Bell Aliant Centre in Only) $578,128 $808,414 $681,142 $2,067,684 Total Direct and Indirect Expenditure (on- Charlottetown, PEI. Island only) $3,331,117 $3,917,699 $3,924,677 $11,173,493 This annual economic impact arising from visitor spending to this facility RESULTS EXCLUDING HOCKEY SCHOOL excluded use of the facility by local user groups or members. Impacts were Total Direct Impact Excluding Hockey School $1,675,727 $1,877,448 $1,943,473 $5,496,647 only recorded for visitors from elsewhere on the Island, as well as off- Total Direct and Indirect Expenditure (on- island. The building has a renowned hockey school which draws significantly from elsewhere in Canada and internationally (as do a number Island only) EXCL. HOCKEY SCHOOL $2,027,629 $2,365,584 $2,351,602 $6,744,816 of key hockey schools in Canada) and the impact is shown. Because the Source: Sierra Planning & Management on behalf of Bell Aliant Centre, Charlottetown facility in Spruce Grove would not have a hockey school operating out of the twin rinks unless sufficient additional off-ice space were included, this hockey school impact can be excluded – however it is itemized for information.

In this example, an island location likely increases the retention of overnight visits compared to similar driving distance in the Edmonton Area. As such, the estimates may overstate equivalent potential in Spruce Grove to some degree, but likely not significantly – a well operated, tournament-focused twin pad can draw significantly from Parkland County and surrounding areas north and south, and with it generate a good level of local impact. The strength of communities such as Leduc in the minor sports tournament events market place is an example of what can be achieved.

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Exhibit 37: Economic Impact for Option 2 – 2,500 Seat Arena and Community Ice Pad

Option 2: 2,500 Seat Arena and Community Item 1A: Arena Construction Impacts Item 1B: Westwind Commercial Construction Impacts Ice Pad Facility Construction Costs (Hard and Soft) $ 53,763,878 Building Construction Costs (Hard and Soft) $ 256,561,640 Sub-total: $ 53,763,878 Sub-total: $ 256,561,640 The adjacent exhibit identifies the construction impacts, operating impacts Spin-off Construction Impacts of Facility Development Spin-off Construction Impacts of Westwind Development as well as the off-site spending impacts for Option 2, comprising a 2,500 Seat Arena with Community Ice Pad. The total annual off-site direct Construction Activity GDP Impact Direct and Indirect (All Provinces)$ 42,864,388 Construction Activity GDP Impact Direct and Indirect (All Provinces)$ 203,756,806 expenditures are in the range of $3.4 million to $4.3 million. Construction Sales Tax Direct and Indirect (All Provinces)$ 4,762,122 Construction Sales Tax Direct and Indirect (All Provinces)$ 22,724,885 Total GDP Impact of Construction:$ 47,626,511 Total GDP Impact of Construction:$ 226,481,691

Total Direct GDP Construction Impact (Arena and commercial)$ 274,108,202

Item 2A: Operating Impacts for the Arena Item 2B: Operating Impacts of the Westwind Commercial Development Number of Direct Employment (FTE) 36.4 Number of Direct Employment (FTE) 756.5 Total FTE Salaries$ 1,316,601 Total FTE Salaries$ 31,737,985 Total FTE Income Tax$ 143,500 Total FTE Income Tax$ 2,543,919 Indirect Employment in Province 10.4 Indirect Employment in Province 158.7 Indirect Employment Out of Province 4.8 Indirect Employment Out of Province 99.7

Total jobs created from site development (FTE) 792.9 Total Salaries/Labour Income$ 33,054,587 Total Income Taxes Generated (Federally and Provincially)$ 2,687,419 Indirect Employment in Province 169.1 Indirect Employment Out of Province 104.6

Item 3A: Arena Spending Impacts

Regional Off-Site Spending: Moderate Attendance Scenario Total Annual Expenditure by Category Expenditure by All Patrons Total Annual Food & All Events Retail Accom. Expenditure Beverage A: AJHL Hockey $237,600 $96,030 $214,434 $548,064 B: Tournaments $656,100 $437,400 $1,315,845 $2,409,345 C: Non-AJHL Sporting Events $45,563 $43,875 $40,613 $130,050 D: Concerts / Family Shows $0 $0 $0 $0 E: Trade Show/Community Events $84,000 $123,000 $64,980 $271,980 Total Annual Direct Expenditure $1,023,263 $700,305 $1,635,872 $3,359,439 Total Annual Indirect Expenditure $716,284 $301,131 $1,145,110 $2,162,525 Total Direct and Indirect Expenditure $1,739,546 $1,001,436 $2,780,982 $5,521,964

Regional Off-Site Spending: Higher Attendance Scenario Total Annual Expenditure by Category Expenditure by All Patrons Total Annual Food & Retail Accom. Expenditure All Events Beverage A: AJHL Hockey $316,800 $128,040 $285,912 $730,752 B: Tournaments $820,125 $546,750 $1,644,806 $3,011,681 C: Non-AJHL Sporting Events $59,231 $57,038 $52,796 $169,065 D: Concerts / Family Shows $0 $0 $0 $0 E: Trade Show/Community Events $126,000 $184,500 $97,470 $407,970 Total Annual Direct Expenditure $1,322,156 $916,328 $2,080,985 $4,319,468 Total Annual Indirect Expenditure $925,509 $394,021 $1,456,689 $2,776,219 Total Direct and Indirect Expenditure $2,247,666 $1,310,348 $3,537,674 $7,095,688

Total Annual Off-site Direct Expenditure (range) $3.4 M to $4.3 M

Total In-facility Spending $6,704,347 Industry Output (Direct and Indirect All Provinces) $11,992,301 CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 79

Exhibit 38: Economic Impact Assessment for Option 3 – 3,500 Seat Event Centre and Community Ice Pad

Option 3: 3,500 Seat Event Centre and Item 1A: MUSEC Construction Impacts Item 1B: Westwind Commercial Construction Impacts

Community Ice Pad Facility Construction Costs (Hard and Soft) $ 61,582,403 Building Construction Costs (Hard and Soft) $ 255,939,918 Sub-total: $ 61,582,403 Sub-total: $ 255,939,918 The adjacent exhibit identifies the construction impacts, operating impacts as well as the off-site spending impacts for a 3,500 Seat Event Centre with Spin-off Construction Impacts of Facility Development Spin-off Construction Impacts of Westwind Development Community Ice Pad. The total annual off-site direct expenditures are in s $ 203,263,045 the range of $8.2 million to $10.4 million. Construction Activity GDP Impact Direct and Indirect (All Provinces)$ 49,593,410 Construction Activity GDP Impact Direct and Indirect (All Province Construction Sales Tax Direct and Indirect (All Provinces)$ 5,454,646 Construction Sales Tax Direct and Indirect (All Provinces)$ 22,669,816 Total Direct GDP Impact of Construction:$ 55,048,057 Total Direct GDP Impact of Construction:$ 225,932,861

Total Direct GDP Construction Impact (MUSEC and commercial)$ 280,980,917

Item 2A: Operating Impacts for the MUSEC Item 2B: Operating Impacts of the Westwind Commercial Development Number of Direct Employment (FTE) 36.4 Number of Direct Employment (FTE) 863.6 Total FTE Salaries$ 1,316,601 Total FTE Salaries$ 34,475,633 Total FTE Income Tax$ 143,500 Total FTE Income Tax$ 2,075,658 Indirect Employment in Province 10.4 Indirect Employment in Province 191.6 Indirect Employment Out of Province 4.8 Indirect Employment Out of Province 124.6

Total jobs created from site development (FTE) 900.1 Total Salaries/Labour Income$ 35,792,234 Total Income Taxes Generated (Federally and Provincially)$ 2,219,158 Indirect Employment in Province 201.9 Indirect Employment Out of Province 129.4

Item 3A: MUSEC Spending Impacts

Regional Off-Site Spending: Moderate Attendance Scenario Total Annual Expenditure by Category Expenditure by All Patrons Total Annual Food & All Events Retail Accom. Expenditure Beverage A: AJHL Hockey $237,600 $96,030 $214,434 $548,064 B: Tournaments $656,100 $437,400 $1,315,845 $2,409,345 C: Non-AJHL Sporting Events $182,250 $175,500 $162,450 $520,200 D: Concerts / Family Shows $1,122,300 $1,122,300 $1,397,070 $3,641,670 E: Trade Show/Community Events $336,000 $492,000 $259,920 $1,087,920 Total Annual Direct Expenditure $2,534,250 $2,323,230 $3,349,719 $8,207,199 Total Annual Indirect Expenditure $1,773,975 $998,989 $2,344,803 $5,117,767 Total Direct and Indirect Expenditure $4,308,225 $3,322,219 $5,694,522 $13,324,966

Regional Off-Site Spending: Higher Attendance Scenario Total Annual Expenditure by Category Expenditure by All Patrons Total Annual Food & Retail Accom. Expenditure All Events Beverage A: AJHL Hockey $316,800 $128,040 $285,912 $730,752 B: Tournaments $820,125 $546,750 $1,644,806 $3,011,681 C: Non-AJHL Sporting Events $236,925 $228,150 $211,185 $676,260 D: Concerts / Family Shows $1,106,820 $1,458,990 $1,816,191 $4,382,001 E: Trade Show/Community Events $504,000 $738,000 $389,880 $1,631,880 Total Annual Direct Expenditure $2,984,670 $3,099,930 $4,347,974 $10,432,574 Total Annual Indirect Expenditure $2,089,269 $1,332,970 $3,043,582 $6,465,821 Total Direct and Indirect Expenditure $5,073,939 $4,432,900 $7,391,556 $16,898,395

Total Annual Off-site Direct Expenditure (range) $8.2 M to $10.4 M

Total In-facility Spending $6,704,347 Industry Output (Direct and Indirect All Provinces) $11,992,301 CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 80 9 CAPITAL COST SUMMARY

9 CAPITAL COSTS SUMMARY Project Costs The consulting team then established a fee for the architectural and Project costs also identify the anticipated costs of providing a “turnkey” engineering services as well as project and program management services parking site complete with necessary parking, access/egress, curbing, and added those amounts to a “Soft Cost/Professional Fees” line item. landscaping, lighting, drainage and servicing, as well as signage. The City of Spruce Grove requested the development of design materials for a twin pad ice rink facility; an approximate 2,500 seat arena with a Finally, a comprehensive list of Furniture, Fixtures and Equipment (“FFE”) These costs are also itemized, and while there was variation between the community ice pad component and an approximate 3,500 seat multi use was developed to cover all necessary items to effectively operate each of contractors, it is expected that this range is reasonable. event centre with community ice pad. In addition, Council requested a the three facility options. detailed project cost estimate for each of the three options. The variation between contractors for the purposes of pricing, as an as-yet A total project cost estimate was then developed for each option from undesigned project, is fully expected. The variance between the As such, the design team of Perkins and Will developed site plans, floor each contractor with respect to Soft Costs; Architectural, Engineering, contractors with regard to construction costs (as opposed to other items plans and exterior renderings for each of the three options with oversight Project and Program Management; Overall Construction Capital Costs; which together with construction costs comprise the total project costs) is from ICC and Sierra. Upon completion of the design elements for the Costs Associated with Construction and FFE. greatest for the twin pad facility (upwards of 13%), is significantly less for three options, Options 2 and 3 were delivered to One Properties and the 2,500 seat facility (less than 8%), and is closest of all for the 3,500 seat Beaverbrook to be put into the overall masterplan of the Westwind Centre Each of the two final cost estimates were then placed “side by side” for multi-use event centre and community ice pad (under 4% variance highest development model. comparison purposes for each of the three options. to lowest). Careful consideration was given to the overall square foot size of each of Exhibit 39: Summary of Capital Project Costs the two options, the parking allocation that would be appropriate for each of the options and the subsequent inclusion of the Park and Ride Transit Station and parking component. The twin pad ice rink facility (Option 1) was not considered suitable for the Westwind site and as such a generic site plan was developed to show the footprint of the facility, the allocation of appropriate parking and the inclusion of the City’s Park and Ride Transit Station and parking component. The consulting team then provided an initial project cost estimate based on the square footage of each of the three options relative to similar projects that have been completed in other markets. These estimated project numbers will provide the rationale to move forward with schematic drawings for the selected option, which in turn will provide more detailed estimates from general contractors. Note: Option 3 costs presented above do not include the optional modular addition for office space (estimated to cost in the the range of $2.9 to $3.4M). Two contractors with significant experience in the event centre and arena construction industry were selected to provide preliminary cost estimates based on the initial design elements created for all three options.

Contractors were asked to provide a detailed breakdown of costs by construction division, provide their estimate for General Conditions and their construction management fee, establish a construction contingency as well as providing estimates for insurance and bonding costs.

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 83

The purpose of enlisting the opinion of experienced contractors is to Total Project Costs Park and Ride Facility Costs and Land remove some of the unnecessary design-contingency that often Requirements accompanies the preparation of concept plans. “Design contingency” is a Total project costs are compared for each option, side by side, based on broad measure of cost addition necessary to guard against the risk of cost the costs derived above. In addition to project costs, this table includes The contractors contacted also provided an estimate of the costs to increase because the project is not yet designed. Our approach here is to the net land costs associated with the purchase of the required additional focus on a given program which was discussed at length with the general develop the park and ride transit shelter and amenities as well as the bus land to accommodate both Option 2 and Option 3 schemes with their bays (x6) and a requirement for 220 parking stalls. These costs are contractors, the result of which is the ability to provide a detailed level of required parking supply. The land costs were established through a costing that builds off that program rather than an undefined concept. itemized to assist the City in the important work of creating an inter-city process of working with the Joint Venture (JV) developer of the Westwind transit hub alongside the event centre project. The land requirement of Included in the cost estimates are construction cost contingency – this commercial site, Beaverbrook and One Properties. The cost takes into some 2.5 acres in Options 2 and 3 is also subject to land purchase reflects the risks associated with construction costs rising as a result of account the provisions of the original 2010 agreement between the City of requirements – at the same rate as that for the balance of the lands unexpected conditions during construction. As the project moves forward Spruce Grove and the JV for the development of the Westwind lands required. into more detailed design and the design is further developed, the subject to an options agreement. Within these general provisions, the City contingency will be reduced accordingly. In addition, a cost contingency is established the right to retain 5 acres of land for the purposes of future At this time the capital costs associated with the Park and Ride are not also included for Furniture, Fixtures and Equipment (FF&E) given the development by the City (reflective of the general intent to develop more considered an arena-related project cost and are therefore excluded from nature of this significant mix of largely purchased items for install. than a commercial shopping environment on the site). Accordingly, the our summary total project costs. However, based on the cost estimates Obviously for more complicated sites involving development of brownfield amount of land required to be purchased for the arena complex and provided by the two contractors, the Park and Ride facility are expected to sites in downtown environments, a contingency for extra-ordinary site parking (under Options 2 and 3) is net of the retention of 5 acres. be in the range of $1.4 to $1.7 million for all 3 options. development costs is warranted. In this instance the Westwind site, and Pioneer Lands in general, are an active greenfield development zone, Exhibit 40: Estimated Total Project Capital Costs (Inclusive of Land Purchase (2018$) reducing (not eliminating) the likelihood of unforeseen site-related extra- ordinary development costs. Accordingly, a contingency for site-related costs is not required. The approach of the costing exercise is to answer the question: what is this building and site likely to cost to develop? To that end, the detailed analysis which has been undertaken effectively answers this question, including the appropriate use of construction contingency.

Note: Assumes Option 1 is located on Westwind Site.

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | JANUARY 2019 | 84 PART E: FUNDING & IMPLEMENTATION

10 FUNDING ASSESSMENT

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/dzK&^WZh'ZKssEdEdZͬZEKDW>yh^/E^^^E>z^/^ͮ:EhZzϮϬϭϵͮϵϭ 11 RISKS, IMPLEMENTATION & NEXT STEPS

11 RISKS, IMPLEMENTATION & NEXT STEPS Risks Analysis x Design errors and omissions – this is the risk associated with building x Revenue risk: as in any exercise, the budgeting and estimating features and requirements being either underrepresented or absent process with regard to operating performance should be At the outset, a range of risks exist for any major development project. and necessitating patched design and construction solutions and developed as the design of the facility is further specified, as Where possible, the majority of such risks are mitigated through effective potential cost additions in addition to usual project delays associated partners are made known, and as more certainty exists regarding management of the business planning, design and delivery of process. with such changes in scope. Additionally, there is an ultimate risk in the range of operating costs closer to the time of the any development project that the intended design is not fulfilled due commissioning of the building. Achieving events through Capital costs for facilities of this type are not pre-determined and decision the failure of the constructor to build the facility to design; competitive bid processes is part and parcel of any spectator makers have considerable control in establishing the balance between x Procurement risks – these risks pertain to problems which arise facility business plan but is inherently a risk. budget and what goes “into” a building for this budget. Decisions makers, between prospective contractors and the procurement agency (i.e. the through their advisors, can control scale, quality and business conditions municipality); x Competition: competitive venues in the region and elsewhere (as surrounding the allocation of risks in delivery of the project. x Construction delays – from a variety of potential sources related to part of cross region tour flows) are always a risk. overall management, individual trades, materials or unforeseen site- Capital costs related matters; and x Operating costs risk: There is a risk that the operating costs will be higher than projected due to a range of factors, some of which can The capital cost estimates contained in this report are estimated based on x Cost overruns – for a variety of reasons, there is a risk associated with be estimated and some of which are difficult to estimate in the potential scale of development recommended in this report. Size, the capital cost as estimated in the design stage. advance. Items such as increased utility costs, unforeseen repairs quality and types of use are all yet to be determined in detail through and maintenance cost, higher management costs and a range of subsequent business planning, such that capital cost estimates at this time other factors which can affect the financial performance of large- are reasonable estimates of possible cost, excluding any extra-ordinary Operating Risks scale facilities. However, as a new facility, these costs would not development costs. Facilities, and in particular public sector municipal capital facilities, have a be expected to materialize early in the life of the building, while number of operating risks related to revenue generation, operating costs The stages required to better inform capital cost estimates are as follows: the estimate of normal operating costs for facilities of this type can reduction and expense management, effective programming and facility be estimated to a high degree of accuracy. Once a preferred utilization, and attention to opportunities for marketing additional services 1. Confirm building components and develop a final functional space option is chosen and more detailed designs are developed, the and identification of revenue sources. For an event centre, there is the program of the preferred option – those elements that are estimate of expected operating costs and event-day expenses can additional market dynamics of the commercial touring and event markets be provided with greater certainty. essential, and those optional per the results of this report; and which can be expected to change over time and which otherwise represent 2. Undertake an elemental capital cost assessment by a professional a specialized business niche activity for a municipally-owned facility. The x Management performance: the management performance is a quantity surveying firm, including the required cost contingency following outlines specifically how these combined risks should be (1) significant risk and can often be the difference between revenue (+/- 25% as a Class D estimate). anticipated and (2) mitigated. growth and systemic revenue attrition. The approach of the management team to operating the facility and all respects Some of the principal operating risks for this facility include: Development, Design and Construction Risks relating to marketing and services provided to both patrons and x Macro-economic shock: the potential for global economic suppliers, and the overall environment in which the facility is All construction projects involve risk in their design, development and conditions to impact the consumption of entertainment and other marketed and positioned, is of significance to the success of any construction. These risks relate to a range of factors including the event products due to constraints on discretionary income or facility. following principle elements: currency impacts. The goal should be a diversification of events x Compatibility of uses present in facility: the potential exists for including a range of trade show/convention events to family x Insufficient detail in design leading to scope creep to meet anticipated multiple users and events to create conflict in scheduling and loss leisure and entertainment product so as to minimize impacts from functional requirements - This translates into longer timeframes for of revenue. Part of the skills of an adept and experienced facility economic decline. completion and often increases in capital costs as well as management team is to maximize the seamless transition of the insufficiencies in design and layout of buildings; facility between uses to minimize revenue losses, achieve

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compatibility between permanent uses and create synergies Process for Delivering the Facility Construction Management Approach between uses to improve utilization and patronization of the amenities within the facility. Financially benefitting from a strategy In terms of actions required under this approach the municipality will be The Traditional Public Procurement Approach of multi-use and raising overall utilization without a loss of event required to ensure that the following occurs: days is another key measure of success in facility management. In the traditional municipal procurement method, municipal or other x Select, through competition, a Prime Architectural

public sector funds are used to fund capital construction costs and the Consultant (Prime Consultant) to undertake the next steps Risk mitigation strategies that can be undertaken to reduce the range and municipality is responsible for facility operation, maintenance and life in functional program development and design. Because scale of risks include: cycle works. the focus is on these initial tasks, it is not necessary to hire a Construction Management firm at the same time as the x High quality management of the facility – a key feature of risk Under the traditional approach, the public sector owner of the facility Prime Consultant. However, it is generally good practice to mitigation which is based on utilization of industry expertise to separates out the components of project design, construction and select a Construction Management firm, if this is the maximize the revenue, ensure efficient operation and cost delivery, through one or more design development contracts, and a series desired approach, relatively early in the detailed design reduction in operating expenses. of construction tenders, managed by a project manager contracted by the process. municipality. x Minimize lifecycle costs through lifecycle cost planning – this can include the provision of capital reserve budgets to meet certain The operation and maintenance of the facility is the responsibility of the x The Prime Consultant will engage in the following key capital replacement costs in future years. municipality with necessary short-term contracts with private sector companies to provide supplies and specific services. Under this model, the milestone tasks: x Pre-opening business planning – it is important that once a municipality has 100% control of the facility, its financing and operations, o Functional Program development (to advance the high- detailed design and functional program is established for the and therefore assumes all risks associated with the project including any level program to the concept design stage.) facility, and potential programming and revenue opportunities are delays or cost overage prior to completion, and any ongoing operating created for the operations of the facility, that a detailed plan of liabilities (financial or otherwise) during the operation phase of the o Schematic Design action is undertaken to create the necessary departmental project.

operating cost budgets, marketing resource requirements, and o Design Development With respect to the process to design and deliver the facility under the pre-opening expenses to ensure that the facility operating plans o Ultimately Contract Drawings, Tendering, and Contract Traditional Public Procurement approach, this is most appropriately one of and forecasts are as rigorous as possible and are aligned with the Administration for construction. two traditional approaches: 1) Construction Management Contract or 2) a actual facility that has been designed and built. This can be a Stipulated Sum General Contract. There are other variants of these crucial link to ensure that “normalized operations”, that is the x The resulting approach is a collaborative venture in which approaches that involve Cost-Plus contracts, Guaranteed Maximum Price facility operating at its designed utilization and event day capacity; the qualifications of the Construction Management firm contracts and other more integrative project delivery models (IPDs). can be achieved as quickly as possible. A lack of planning can result (often these firms are part and parcel of broader in continued under-performance and is one reason why a private Exhibit 45: Traditional Public Procurement Approach construction firms) are of critical importance. Significant sector management capability, incentivized by performance share reliance is placed on the Construction Management firm to and/or financial penalties for underperformance, can help ensure bring the project in on schedule and budget. effective revenue control. Typically, a private operator would be brought on board at the detailed design stage (if not part of a pre- selected design-build-operate consortium) to ensure preparedness A Construction Management contract can help overcome the inherent to capture and retain market share upon opening. It should be price uncertainty by establishing a maximum upset price which will factor recognized that no facility in a competitive market place can be in contingencies to mitigate the degree of uncertainty in setting the expected to achieve all of its market potential at the outset. maximum price.

x Facility revenue and event opportunities - can be expected to Stipulated Sum Approach (General Contractor) continuously evolve, but the initial “ramp-up” period of the first If this is the chosen approach it is characterized in the following way: few years is a risk for facilities in this market. x The contract is between the Owner and Contractor. The above risks can be further mitigated to a lesser or greater degree by x The Prime Consultant is retained by the Owner (as the particular method of delivery and operation of the facility. described above) and advances the Owner’s interests

through the design process.

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x The Prime Consultant then acts as an impartial, fair Exhibit 46: Public-Private Partnership Options Exhibit 47: Range of Partnership Options Possible mediator of the construction contract between the Owner and the Contractor during the construction period.

Public-Private Partnership Options Several essential principles define public private partnerships and the reasons that municipalities and other public sector organizations seek these models: x Involving the private sector in project delivery and/or operations enables the transfer of risks to the private sector while also providing the necessary profit incentive for the private sector; x Partnerships are based on reducing overall costs both in the short term and over the long term; x Roles and responsibilities reflect the relative expertise of the public vs. private sector parties; and x The arrangement potentially frees-up scarce public sector resources. The extent of the private sector involvement, and therefore the degree of project risk transferred to the private sector, varies depending on the type of private sector partnership. In this first limited form, the involvement of the private sector is in the provision of the design-build services whereby the design and construction (not necessarily the financing) is undertaken by the private sector. Ownership and operation of the facility, when complete, remains with the public sector. At the other end of the spectrum is full-out privatization whereby the the full risks of development and operations of the facility, unless private sector fully substitutes the public sector in the provision of the the municipality is prepared to pay a private provider to mitigate These options should be explored and there are several variants along a facility, service or other activity under consideration. Between these two their risks. In facility operations there are any number of possible gradient of lesser or greater reliance on the private sector in providing a limits lie a range of risk transfer mechanisms, which have proven valuable combinations of risk and reward which characterize a partnership turnkey facility. to a number of municipalities in the delivery of large scale, long term between the municipality and a private operator. The resulting capital facilities. These are illustrated below: A possible outcome is that of an integrated design-build process to deliver partnership can be expected to reflect a number of things including the facility and the operation of the facility by private sector, third party the anticipated strength of the market as well as the opportunities management. Integrated design-build refers to the process whereby the for revenue generation created by the building. Examples include design of the building is not simply given over to the construction-design the following: consortium but involves the ongoing involvement of the City’s x The use of non-arms length agencies of the municipality to operate architectural consultant until a point is reached where all parties are one or a number of City-owned venues (an example is the satisfied with the design solutions. Hamilton Entertainment and Convention Facilities Inc. (HECFI), With specific regard to the risks involved in operations, there is also now branded as Core Entertainment in the City of Hamilton); a range of possible involvement by the private sector - from full x Third party, professional management firms retained on a fee for public ownership and operation, wherein the municipality operates service basis. This may also include a combination of a flat fee the facility without any third-party management services, to a fully along with some revenue and risk sharing for key services such as private service owned and operated by the private sector. At this concessions; and scale of facility, there is essentially no private market for taking on

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x A fuller form of partnership with the fee of the operator either secure feedback from the citizens of Spruce Grove relative to the three minimalized or otherwise at risk, and a net revenue sharing model facility options provided by the consulting team. based on targets for operational success. After the public consultation sessions have concluded and staff has collected additional public information, the Spruce Grove City Council will be directed to select the appropriate facility option for development. Efficient Implementation Process The project timeline becomes effective when Council has made their decision. For the purposes of this development, the graphic depicts June The nature of this type of project does not lend itself to rapid 2019 as the official start date for the project. Approximately twenty – implementation, particularly because of the need to secure funding, eight months have been allocated for the completion of the project. including any funding from other levels of government. The lesson from Canadian projects since the turn of the century is that implementation is a The design team will continue from the conceptual designs they have multi-step process which can take time. It can, however, be a quicker generated to date through the schematic design phase, design – process if several conditions are in place: development phase and finally the construction document phase. Based on similar projects completed recently, it is expected that final design x A firm and unequivocal choice of site and agreement as to documents will be completed by December 2019. the exact scale of the facility and any associated civic or Shortly after Council has made their decision to proceed with one of the other development contiguous with the project; Options, discussions will continue with the Spruce Grove Saints with x Allied to this, strong commitment of the municipality with respect to a long-term license agreement for the occupancy and use of the sufficient resources dedicated to implementation; new facility. To avoid issues later into the project development and/or operation, it is important to have completed the license agreement as x Again, allied to this, a strong policy foundation that helps early as possible within the timeline. set a larger, often generational planning context to the development of the event centre. We have seen this at a The process to select the general contractor would begin during the latter number of scales: in Edmonton with the broader vision of part of December with a selection scheduled for late February to mid- the Ice District, in London Ontario in 2000 with the March. Downtown Millennium Plan, and in Sault Ste. Marie the Assuming no unforeseen issues with the selected site, construction is Downtown Regeneration Plan which placed a new event scheduled to begin in May of 2020. We have allowed seventeen months centre at its core; and for the completion of construction which allows for an early fall opening of x Funding: the ability to move forward knowing that a plan the facility. to pay for the event centre is in place. It is recommended that approximately twelve months before the facility is It is important therefore to work concurrently on a number of these items. scheduled to open, a decision is made with regards to the entity that will manage and operate the facility. As such, the graphic shows the selection of a facility management team will be completed by October 2020. Potential Timeline for Implementation and Facility commissioning and the final certificate of occupancy are scheduled for September 2021. A grand opening gala and series of events will Next Steps christen the new facility in the month of September. The accompanying graphic illustrates the suggested timeline for the development of the City’s selected project Option; a community twin-pad arena, a 2,500 seat arena and community ice pad, or a 3,500 seat event centre and community ice pad. The timeline assumes a public process will be undertaken following the January 14, 2019 session of City Council. Specifically, Council will engage with the community in a series of public consultation sessions designed to

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Exhibit 48: Potential Project Timeline

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APPENDIX 1 EVENTS REVIEW FOR ARENAS: 2,000 TO 2,999 FIXED SEATS

Events Review: Large Seating Capacity Arenas Arenas in Alberta (2,000 to 2,999 fixed seats) The consultant team has undertaken initial desk-based research into events held at indoor sports facilities across Canada with between 2,000 We have identified the following regarding the type of events hosted at and 2,999 fixed seats (akin to a large seating capacity arena). The purpose the arenas in Camrose and Brooks, Alberta: of the research has been twofold: Camrose Recreation Centre (EnCana Arena): The EnCana Arena is 1. To ascertain how many of these venues hold special events, and if so the largest of three arenas in this recreation complex and has 2,500 what type and how regularly; and fixed seats. Arena events are principally the Kodiaks hockey games. 2. Using this research to gauge whether facilities of this size in Canada Concerts and other performances are generally hosted in other generally operate as arenas or as commercial, multi-use event purpose-built venues in Camrose, including the Bailey Theatre. This centres. arena therefore does not operate as an event centre.

The results of this research are summarized in the attached exhibit. Centennial Regional Arena, Brooks: This has a fixed seating capacity below 2,000 (1,700 seats) but was included in the research as an A total of 35 indoor sports facilities within this seating capacity range additional regional comparator. This is also principally a hockey were identified for further research, using information on venues venue but has hosted occasional non-ice events including Battle of obtained online. The only selection criterion was that seating capacity the Bands and in 2015 was on the tour circuit for Canadian rock band, would be based on fixed seats for hockey. To maximize the sample size, ‘Theory of a Deadman’. Although the Municipality’s web page for the no arenas were excluded due to their location in Canada or their date of venue identifies that it is a suitable concert venue, it does not appear construction. to regularly host any non-sporting special events, and therefore like the EnCana Arena, does not operate as an event centre. The event information gathered for each of these arenas was derived from online research (arena/municipality event calendars, tourism and Age of Arenas Municipality event webpages, and venue searches via Google). In the case of two arenas listed in Alberta (below) our web-based research was The majority of the arenas which have been researched within the 2,000 supplemented by calls to arena/municipal staff to corroborate our to 2,999 fixed seating range were constructed pre-2000. Arenas with this findings. seating range constructed or significantly redeveloped since 2000 (and

Summary Conclusions which are planned) include facilities that form part of a university campus and are designed principally to serve the institution’s specific and wide- In summary, most of the 35 facilities we’ve researched with between ranging requirements for competitive sports programming. For example: 2,000 and 2,999 fixed seats operate as arenas serving their principal local sporting tenant(s), and in the majority of cases, additional special events • Ryerson University’s Mattamy Athletic Centre in Toronto (previously hosted at these venues are ‘flat floor’, do not take place regularly, and Maple Leaf Gardens): The arena was redeveloped in 2012 with 2,539 normally only have a local community focus (as opposed to unique or tour fixed seats and operates principally as an ice rink. There is an circuit events which have a wider draw). additional 1,000 fixed seat basketball arena. This facility is offered as an event venue when not required for university sport programming, The dearth of information available online advertising past or however, this is largely to take advantage of demand created by its forthcoming special events for these facilities would support the Downtown Toronto location. contention that, as a general principle, arenas of this size do not normally operate as commercial ‘event centres’. • Proposed Twin Pad at the University of Alberta in Edmonton: Anticipated to open in 2020 with 3,000 fixed seats in the main pad Moreover, where arenas of this size are located in urban areas, our and 400 seats in the second pad. research has indicated that there are often larger or purpose-built alternative venues locally which are better placed, by virtue of their size and/or their facilities, to attract a wide variety of special events (e.g. theatres, auditoriums, conference facilities).

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | APPENDIX

Desk-Based (Online) Research: Type of Events Held at Arenas with Between 2,000 to 2,999 fixed seats Major Tenant Province / Seats Est. Year Arena City (Hockey Unless Events Using Rink Arena (Based on Online Research Only) Other Comments Territory (Hockey) Constructed Stated) No arena calendar online listing past special events. A review of Municipality Local media indicates that the Municipality is Brantford Civic and Tourism-related webpages, and a wider Google search for the venue, Brantford Ontario 2,981 Brantford Blast 1967 considering options for renovation if there is a future Centre indicate only occasional non-ice special events are hosted (e.g. Sept to Dec OHL team. 2018 includes Psychic Expo and Dog Show). No arena calendar online listing past special events. A review of Municipality The 'Tourism Swift Current' website identifies that that Swift Current and Tourism-related webpages, and a wider Google search for the venue, non-ice special events are typically hosted at other Credit Union Iplex Swift Current Saskatchewan 2,879 1967 Broncos indicate only occasional non-ice special events are hosted (Southwest venues e.g. conferences, concerts and trade shows Showcase Rodeo and tradeshow). (Living Sky Casino Centre, Lyric Theatre etc). City's Downtown website identifies that non-ice special No arena calendar online listing past special events. A review of Municipality William Allman events are typically hosted at other venues (e.g. City Stratford Ontario 2,828 Stratford Cullitons 1924 and Tourism-related webpages, and a wider Google search for the venue, have Memorial Arena Hall Auditorium, theatres, Stratford Rotary Complex, not identified any non-ice special events being hosted at this venue. Burnside Agriplex, etc.). No arena calendar online listing past special events. A review of Municipality The venue hosts community-focussed special events, Miramichi Civic New Mirimichi and Tourism-related webpages, and a wider Google search for the venue, Miramichi 2,805 1986 but there are few other large event spaces in close Centre Brunswick Timberwolves identify that the arena does hold some non-ice special events, including trade proximity. shows and a Folk Festival. No arena calendar online listing past special events. A review of Municipality There are other venues which special events space in Colisee de Trois- Blizzard, UQTR Trois-Rivieres Quebec 2,800 1938 and Tourism-related webpages, and a wider Google search for the venue, have City (theatres, amphitheatre etc). Online media reports Rivieres Patriotes not identified any non-ice special events being hosted at this venue. suggest arena is to be replaced by new 'Mega Complex'.

Forms part of the Juan de Fuca Recreation Centre. Ice and lacrosse venue. Save On Foods Memorial Centre is the principal special British Arena website identifies that venue started being offered as a concert space in The Q Centre Colwood 2,781 Victoria Grizzlies 2004 event venue in local area for concerts and trade shows Columbia 2014. Alice Cooper performed on two-date Canadian tour in 2016. However, (7,500 seats) no online evidence of this being a regular non-ice event venue.

No arena calendar online listing past special events. A review of Municipality Centre Henry- Baie-Comeau Baie-Comeau Quebec 2,779 1970 and Tourism-related webpages, and a wider Google search for the venue, have n/a Leonard Drakkar not identified any non-ice special events being hosted at this venue. City's online event calendar identifies that non-ice events hosted are generally Other large community events are in summer months Selkirk Recreation community-related. Upcoming events include: Fall Recreation & Leisure Fair, Selkirk Manitoba 2,751 Selkirk Steelers 1992 and principally outdoors on Waterfront (e.g. Music Complex 39th Interlake Juried Art Show, Christmas Festival & Craft Sale, Blood Donor Festival, Rodeo, etc). Clinic. University of Alberta University's website identifies that arena is used principally for varsity sports, Golden Bears & Clare Drake Arena Edmonton Alberta 2,700 1959 campus and community-related programming. No information on non- Many other special event venues available in Edmonton Pandas Varsity University related events available online. Athletics No arena calendar online listing past special events. A review of Municipality Colisee Jean Longueuil College Longueuil Quebec 2,600 1968 and Tourism-related webpages, and a wider Google search for the venue, have n/a Beliveau Francais not identified any non-ice special events being hosted at this venue. No arena calendar online listing past special events. A review of Municipality St Thomas-Elgin London is 30 min drive time to north and offers a variety St Thomas Ontario 2,600 1953 and Tourism-related webpages, and a wider Google search for the venue, have Memorial Centre of special event venues. not identified any non-ice special events being hosted at this venue. No arena calendar online listing past special events. A review of Municipality West Central Events Kindersley Saskatchewan 2,600 Kindersley Clippers Unknown and Tourism-related webpages, and a wider Google search for the venue, have Rural setting with under 5,000 population. Centre not identified any non-ice special events being hosted at this venue.

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | APPENDIX

Major Tenant Province / Seats Est. Year Arena City (Hockey Unless Events Using Rink Arena (Based on Online Research Only) Other Comments Territory (Hockey) Constructed Stated) The facility website shows that the Downtown Toronto arena forms part of a University arena. Part of sports complex in Downtown Mattamy Athletics 2012 Toronto Ontario 2,539 Ryerson Rams University complex that serves the sports teams but is also offered as an event location, which also include a 1,000 fixed seat basketball Centre (renovation) and conference venue. arena. No arena calendar online showing past special events. Municipality's website Arctic Winter Games Iqaluit Nunavut 2,500 2001 identifies that the arena is principally for ice-related events, but occasionally n/a Arena used for other activities, including public soccer. No arena calendar online showing past events. A review of Municipality and Centre Mario Thetford Thetford Mines Tourism-related webpages, and a wider Google search for the venue, identify Principal local concert venue is Salle Dussault Theatre Quebec 2,500 1964 Gosselin Mines Isothermic that the venue occasionally holds conventions and expos (e.g. dog show, arts (630 seats). festival, etc). Municipality's online events calendar indicates non-ice events generally limited Many large community events are in the summer Amherst Stadium Amherst Nova Scotia 2,500 Amherst Ramblers 1959 to small-scale, focussed on local community. months and outdoors (e.g. in Victoria Square). No arena calendar online listing past special events. A review of Municipality Dave Andreychuk Hamilton City of Hamilton has many other indoor spaces to cater Hamilton Ontario 2,500 1966 and Tourism-related webpages, and a wider Google search for the venue, have Mountain Arena Steelhawks for non-ice events. not identified any non-ice special events being hosted at this venue. Municipality’s website refers to the arena being suitable No arena calendar online showing past special events. A review of Municipality for concerts. However, in calls with venue staff, it was 2007 EnCana Arena Camrose Alberta 2,500 Camrose Kodiaks and Tourism-related webpages, and a wider Google search for the venue, have indicated that there is a performance centre in Camrose (expansion) not identified any non-ice special events being hosted at this venue. which hosts major events and concerts. Corroborated by our online research. No arena calendar online showing past special events. A review of Municipality Local media reporting that options being considered for North Battleford North Battleford North and Tourism-related webpages, and a wider Google search for the venue, has Saskatchewan 2,500 Unknown replacing arena with twin-pad (3,000 seats and 600 Civic Centre Battleford Stars identified that the venue hosts some non-ice special events (e.g. annual seats being considered). Kinsmen Indoor Rodeo, circuses, concerts, dining, and dance functions) No arena calendar online showing past special events. A review of Municipality Centre Sportif Saint-Georges Cool and Tourism-related webpages, and a wider Google search for the venue, has Saint-Georges Quebec 2,476 1968 n/a Lacroix-Dutil FM 103.5 identified that the venue does host non-ice special events, including 'Legends of Rock' and expos. Online research suggest that the Municipality has in No arena calendar online listing past special events. A review of Municipality Chatham Memorial recent years been considering building a new home for Chatham Ontario 2,412 Chatham Maroons 1949 and Tourism-related webpages, and a wider Google search for the venue, have Arena junior hockey at St Claire's College (5,000 capacity), but not identified any non-ice special events being hosted at this venue. no decision has been made. No arena calendar online listing past special events. A review of Municipality Centre Sportif Granby Quebec 2,385 Granby Inouk 1968 and Tourism-related webpages, and a wider Google search for the venue, have n/a Leonard-Grondin not identified any non-ice special events being hosted at this venue.

No arena calendar online listing past special events. A review of Municipality Markham Centennial Preferred non-ice event venues include Markham Pan Markham Ontario 2,300 Markham Royals 1972 and Tourism-related webpages, and a wider Google search for the venue, have Centre Am Centre. not identified any non-ice special events being hosted at this venue. No arena calendar online listing past special events. A review of Municipality and Tourism-related webpages, and a wider Google search for the venue, has Antigonish Arena Antigonish Nova Scotia 2,290 Antigonish Bulldogs identified that non-ice events are limited to local community events, including n/a annual agricultural exhibition. Arena calendar for next 12 months shows only sporting events.

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | APPENDIX

Major Tenant Province / Seats Est. Year Arena City (Hockey Unless Events Using Rink Arena (Based on Online Research Only) Other Comments Territory (Hockey) Constructed Stated) Municipality's events calendar available but doesn’t show many special events Pembroke Memorial Pembroke Lumber hosted at the arena. A review of Municipality and Tourism-related webpages, Pembroke Ontario 2,250 1952 n/a Centre Kings and a wider Google search for the venue, has identified that the venue hosts music concerts (Dean Brody, Jason Blaine etc) on tour circuit. A review of Municipality and Tourism-related webpages, and a wider Google Eastlink Events Newfoundland search for the venue, has identified that this to be a venue for non-ice events, Clarenville 2,240 Clarenville Caribous 2009 n/a Centre & Labrador including concerts, expos and festivals, but for community and surrounding settlements. No arena calendar online showing past special events. A review of Centre Etienne Municipality and Tourism-related webpages, and a wider Google search for the Montreal Quebec 2,200 Les Canadiennes 1976 n/a Desmarteau venue, have not identified any non-ice special events being hosted at this venue. No arena calendar online showing past special events. A review of Poirier Sport & British Municipality and Tourism-related webpages, and a wider Google search for the Coquitlam 2,200 Coquitlam Express 2010 n/a Leisure Complex Columbia venue, have not identified any non-ice special events being hosted at this venue. No arena calendar online showing past special events. A review of Cowichan Valley British Cowichan Valley Municipality and Tourism-related webpages, and a wider Google search for the Main venue for concerts is Cowichan Performing Arts Duncan 2,040 1978 Arena Columbia Capitals venue, have not identified any non-ice special events being hosted at this Centre. venue. Municipality's event calendar identifies that special events are normally targeted at the local community and are held in a variety of small indoor Woodstock District Woodstock Navy City-hosted special events listed on the Municipality's Woodstock Ontario 2,000 1996 venues across Woodstock. A review of Municipality and Tourism-related Community Complex Jets website are predominantly outdoors. webpages, and a wider Google search for the venue, have not identified any non-ice special events at this venue. No arena calendar online listing past special events. A review of Municipality Arena Marcel Beauport Quebec 2,000 1973 and Tourism-related webpages, and a wider Google search for the venue, have n/a Bedard not identified any non-ice special events being hosted at this venue. No arena calendar online listing past special events. No regular non-ice events Bill Copeland Sports British Burnaby Lakers advertised online. A Google search for the venue identifies that it has Burnaby 2,000 1997 n/a Centre Columbia (lacrosse) previously hosted the Juno Cup, Word Junior Taekwondo Championship, Family Day Winter Festival. No arena calendar online listing past special events. A review of Municipality One part of a larger leisure and recreation complex (Jim Ottawa Junior Jim Peplinksi Arena Ottawa Ontario 2,000 1963 and Tourism-related webpages, and a wider Google search for the venue, have Durrell Recreation Centre), which includes another Senators not identified any non-ice special events being hosted at this venue. arena (Walkley). No arena calendar online listing past special events. A review of Municipality Whitney Forum Flin Flon Manitoba 2,000 Flin Flon Bombers 1958 and Tourism-related webpages, and a wider Google search for the venue, have n/a not identified any non-ice special events being hosted at this venue. Online Arena event calendar identifies that the majority of bookings are ice- related. The few special events there are per year are focussed on the local Winkler Arena Winkler Manitoba 2,000 Winkler Flyers 1967 n/a community (e.g. Police bike auctions, junior rifle championship, Chamber of Commerce business events, Harvest Festival, etc).

Note: Excludes University arenas and those which after further online investigation are not existing hockey venues.

Sources: Google Search Engine, Wikipedia (October 2018).

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | APPENDIX

APPENDIX 2 PROPOSED WESTWIND CONCEPT PLANS AND ASSOCIATED TAX INCREMENT CALCULATIONS

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Assessment Estimate Sub-Totals Residential $ - Non-Residential $ 67,729,423 Multi-Family $ 49,010,000 Exempt $ 43,870,975 Total $ 160,610,398

Tax Rates Rates Component 2018 Rate (%) Municipal Multi-Family 0.0084727 8.5408 d Municipal Non-Residential 0.0084727 Education - Non Residential 0.0037096 Education - Residential 0.002559 Meridian Foundation 0.0000472 Leisure Centre Debenture 0.0000526 Total Non-Residential Tax Rate 0.0122821 8.5408 0.085408 Total Multi-Family Tax Rate 0.0111315

Estimated Annual Non-Residential Taxes$ 580,610.48 Estimated Annual Multi-Family Taxes$ 420,138.23 Total Property Taxes$ 1,000,748.70

Timing Calculation Unescalated Values Tax Rate Accretion 2% p.a. E: Timing CalculatiUnescalated Values Commercial: Commence 2020 Commercial: Resdiential 2020 Year % of Total Amount Year % of Total Amount 1 10$ 59,222 0.00% 1 $ - 2 20$ 120,813 2 $ - 3 30$ 184,845 3 10$ 44,585 4 40$ 251,389 4 20$ 90,954 5 50$ 320,520 5 30$ 139,160 6 60$ 392,317 122.40% 6 40$ 189,258 7 70$ 466,857 119.00% 7 50$ 241,303 8 80$ 544,222 116.57% 8 60$ 295,355 9 90$ 624,495 114.75% 9 70$ 351,473 10 100$ 707,761 113.33% 10 80$ 409,717 11 100$ 721,916 102.00% 11 90$ 470,150 12 100$ 736,354 102.00% 12 100$ 532,837 13 100$ 751,082 102.00% 13 100$ 543,494 14 100$ 766,103 102.00% 14 100$ 554,363 15 100$ 781,425 102.00% 15 100$ 565,451 16 100$ 797,054 102.00% 16 100$ 576,760 17 100$ 812,995 102.00% 17 100$ 588,295 18 100$ 829,255 102.00% 18 100$ 600,061 19 100$ 845,840 102.00% 19 100$ 612,062 20 100$ 862,757 102.00% 20 100$ 624,303 CUMULATIVE TOTAL -$ 11,577,222 CUMULATIVE TOTAL -$ 7,429,581 NPV Year 1 $6,008,760 NPV Year 1 $3,636,450 Discount Rate 6% Discount Rate 6%

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35(/,0,1$5< t'η͗ ϭͲϵϲ͘Ϭ ϮϬϭϴͲϭϭͲϮϳ ^>с ϭ͗ϯϱϬϬ HIGHER ORDER PLAN: Municipal Tax Only Framework Capacity for the Westwind Site Based on 2018 Plan for Development

Assessment Estimate Sub-Totals Residential $ - Non-Residential $ 63,095,636 Multi-Family $ 76,820,000 Exempt $ 43,870,975 Total $ 183,786,611

Tax Rates Rates Component 2018 Rate (%) Municipal Multi-Family 0.0084727 d Municipal Non-Residential 0.0084727 Education - Non Residential 0.0037096 Education - Residential 0.002559 Meridian Foundation 0.0000472 Leisure Centre Debenture 0.0000526 Total Non-Residential Tax Rate 0.0122821 0 Total Multi-Family Tax Rate 0.0111315

Estimated Annual Non-Residential Taxes$ 540,887.34 Estimated Annual Multi-Family Taxes$ 658,539.45 Total Property Taxes$ 1,199,426.79

Timing Calculation Unescalated Values Tax Rate Accretion 2% p.a. E: Timing CalculatiUnescalated Values Commercial: Commence 2020 Commercial: Resdiential 2020 Year % of Total Amount Year % of Total Amount 1 10$ 55,171 0.00% 1 $ - 2 40$ 225,096 2 $ - 3 60$ 344,396 3 20$ 139,769 4 80$ 468,379 4 40$ 285,130 5 100$ 597,183 5 60$ 436,248 6 100$ 609,127 102.00% 6 80$ 593,298 7 100$ 621,310 102.00% 7 100$ 756,455 8 100$ 633,736 102.00% 8 100$ 771,584 9 100$ 646,410 102.00% 9 100$ 787,016 10 100$ 659,339 102.00% 10 100$ 802,756 11 100$ 672,525 102.00% 11 100$ 818,811 12 100$ 685,976 102.00% 12 100$ 835,187 13 100$ 699,695 102.00% 13 100$ 851,891 14 100$ 713,689 102.00% 14 100$ 868,929 15 100$ 727,963 102.00% 15 100$ 886,307 16 100$ 742,522 102.00% 16 100$ 904,034 17 100$ 757,373 102.00% 17 100$ 922,114 18 100$ 772,520 102.00% 18 100$ 940,556 19 100$ 787,971 102.00% 19 100$ 959,368 20 100$ 803,730 102.00% 20 100$ 978,555 CUMULATIVE TOTAL -$ 12,224,112 CUMULATIVE TOTAL -$ 13,538,008 NPV Year 1 $6,728,559 NPV Year 1 $7,037,026 Discount Rate 6% Discount Rate 6%

Delta with 3500 OPTION Commerce Res Total Delta over Industrial Year 5$ 597,183 $ 436,248 $ 1,033,432 $ 655,328 Year 10$ 659,339 $ 802,756 $ 1,462,095 $ 584,796 Year 15$ 727,963 $ 886,307 $ 1,614,271 $ 598,866 Year 20$ 803,730 $ 978,555 $ 1,782,285 $ 661,196 Year 25 $887,383 $1,080,404$ 1,967,787 $ 730,014 Year 30 $979,743 $1,192,853$ 2,172,596 $ 805,994 APPENDIX 3 TRAFFIC IMPACT ASSESSMENT MEMORANDUM

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | APPENDIX

APPENDIX 4 CAPITAL COST DETAILS

CITY OF SPRUCE GROVE EVENT CENTRE/ARENA COMPLEX BUSINESS CASE ANALYSIS | APPENDIX