16-1­ BRAMPTON CITY COUNCk. ...... BRAMPTON patp-June 23^2&iii Report "omptonca Flower City City Council Corporation of the City of Brampton Date: June 22, 2012 File: M25 - PA Sports Centre Subject: Request for Capital Improvements to the PowerAde Centre Contacts: Mo Lewis, Commissioner of Financial and Information Services (Tel: 905-874­ 2250) and Dennis Cutajar, Commissioner of Economic Development and Communications (Tel: 905-874-2698) OVERVIEW • Staff is seeking Council authority to participate in the Lease and License Agreement ("Agreement") discussions currently underway between PA Sports Centre ("Operator") and the Brampton Battalion Hockey Club Ltd. ("Club") in order to reach a revised lease that is acceptable by the two parties and the City. • The current Agreement between the two parties expires on August 14, 2013. The 2012-13 Battalion pre-season, regular season and playoffs will be played in the PowerAde Centre. • The current Agreement includes an option for a 5-year extension that must be exercised by the Club on or before August 14, 2012. • On June 15, 2012, the City received a copy of a letter from the Club addressed to the Operator requesting specific capital improvements to the PowerAde Centre. • This letter states that the Club will not extend the Agreement under the current terms and conditions. • Further, this letter requests the Operator to advise the Club on whether the City is prepared to work with the Operator on the necessary capital improvements at the PowerAde Centre, and if so, to provide a detailed proposal of capital improvements by August 1,2012. • Given the time sensitivity of this matter, staff prepared this report for Council consideration. • The capital improvements represent an opportunity for the City to continue to invest in modernizing the PowerAde Centre to attract high calibre sporting teams and events to Brampton, thereby demonstrating the City's ongoing commitment to sports excellence and sports tourism. • Since its inception in 1998, the Club has attracted more than 1.2 million spectators to the PowerAde Centre. The 1.2 million visits at the PowerAde Centre represent total spending of approximately $80 million1 in the region, mainly in sales at private transportation (operation) and in food and beverage at restaurants/bars. Ontario Ministry of Tourism and Culture, "Tourism Regional Economic Impact Model (TREIM)", 2012 1 X4>-\-2. RECOMMENDATIONS 1. That the report from Mo Lewis, Commissioner of Financial and Information Services and Dennis Cutajar, Commissioner of Economic Development and Communications, dated June 22,2012, to the Council meeting of June 27, 2012, re: Request for Capital Improvements to the PowerAde Centre, be received; and 2. That Council affirm its desire to retain the existing OHL Junior A Hockey Team (Brampton Battalion Hockey Club) in Brampton by directing staff to work with PA Sports Centre Inc. on negotiating terms and conditions, acceptable to all parties, related to the requested capital improvements at the PowerAde Centre; and 3. That staff be directed to report back to Council on the status and outcome of the negotiations between PA Sports Centre Inc. and the Brampton Battalion Hockey Club Ltd. BACKGROUND Origin of Report On June 15,2012, the City of Brampton was copied on a letter from the Brampton Battalion Hockey Club Ltd. (the main tenant in the spectator bowl at the PowerAde Centre) addressed to PA Sports Centre Inc. (the manager and operator of the PowerAde Centre facility). A copy of this letter, along with a May 28 letter from PA Sports Centre, can be found in Appendix 1. Chronology Related to Lease and License Agreement Discussions The following table includes a chronology of recent milestone dates related to communications on the Lease and License Agreement between the Operator and Club. December5,2011 Operator and Club Meet to Discuss Renewal May 23,2012 Operator Meets With City to DiscussCapital Improvements May 28,2012 Operator Sends Letter to Club Confirming Deadlines Related to OHL Lease and License Agreement and Understanding of Capital Improvements Required byClub (See Appendix 1) June 15,2012 Club Sends Letter to Operator Responding to May 28,2012 Letter, including Identification of Capital Improvements required at the Facility (See Appendix 1) June 22,2012 Staff Received Capital Cost Estimates from the Operator, dated June 22,2012 (included this Report) June 27,2012 This Staff Report Prepared for Council Consideration. X6-K? CURRENT SITUATION Looking Ahead to Key Deadlines: Lease and License Agreements On May 23, 2012 City staffwas advised by PA Sports Centre Inc. ofthe deadlines guiding the current Lease and License Agreementbetween the Club and the Operator. The key deadlines are as follows: 1. August 14,2013: Date on which the 15-year term of the current Lease and License Agreement between the Brampton Battalion Hockey Club and PA Sports Centre Inc. expires. The Club is scheduled to play the 2012-13 season at the PowerAde Centre starting in the fall 2012 and ending in the spring 2013. 2. August 14,2012: Last date on which the Club can provide written notice to the Operator of its intention to extend the Term for a further five (5) years. 3. August 1, 2012: As previouslystated (letter of June 15, 2012), the Club has requested a detailed proposal outlining necessary capital improvements at the PowerAde Centre. Sports Excellence. Sports Tourism The Brampton Sports and Entertainment Centre (now known as the PowerAde Centre) opened in 1998 and the project was delivered by a private-public partnership. The facility includes four ice surfaces with the main bowl seating approximately 5000 spectators. The project financing was delivered by multiple sources: namely, private investment; the City of Brampton; and debt financing provided by a chartered bank guaranteed by the City of Brampton. Although the Ontario Hockey League (OHL) continues to be a significant source of revenue for the PowerAde Centre, in recent years PA Sports Centre Inc. management has broadened the Centre's revenue base by increasing the quantity and quality of non-OHL spectator events. The hosting of spectator events continues to be a focus for the Centre in order to expand its revenue base. These events include cultural concerts, trade shows, rock concerts and non­ traditional sports such as mixed martial arts. These types of events generate significant facility rental revenue as well as food and beverage capture. PowerAde staff advised that they intend to continue expanding the range of events held at the Centre in order to diminish reliance on OHL game attendance. The Ministry of Tourism decided last year to add Brampton to the Regional Tourism Organization (RTO) area 5 which includes Mississauga and Toronto. This will increase X6-I-H opportunities for the Operator to host more spectator events. Under the RTO #5, all Brampton property and facilities are included in the Toronto tourism network for marketing and promoting venues such as conventions, trade shows and other special events. The City has invested in the PowerAde Centre to maintain it as a modern and attractive asset in Brampton's sports tourism inventory. Today, it is recognized as a premier facility for hosting major sports events. In addition to the OHL Battalion Hockey team, the facility has hosted several important events over the years including a training camp and exhibition game for Team Czech during the Men's IIHF World Junior Championships held in Ottawa several years ago. The 2015 Pan Para Pan American Games also recognized the quality of the facility by selecting it as a host venue for the prestigious event of amateur wrestling (the sport was later rescinded and relocated to another venue to maximize the benefit of a combative sports cluster at one location). The City continues to be focused on building sports excellence capacity, and fostering a dynamic and attractive sports tourism industry in Brampton that generate positive economic impact opportunities. • The PowerAde Centre is a major asset and resource in the City's sports inventory. Economic Benefit of the Brampton Battalion Hockey Club In 1996, the OHL announced that an expansion franchise was awarded to establish the Brampton Battalion in Brampton, Ontario. In 1998, the Brampton Battalion Hockey Club played its inaugural season as a new, privately owned, Ontario Hockey League Major Junior A (Tier I) franchise. The team has made its home at the PowerAde Centre since its inception in 1998. Over the past fourteen years, the Battalion has had a positive impact on and off the ice. The team has made the playoffs twelve of its fourteen seasons, is a four time Central Division Champion (Emms Trophy) and in 2008-09 it was the Eastern Conference Champion (Bobby Orr Trophy). The Battalion is tied in the OHL lead for having the highest number of players, thirty-five, selected in the NHL Entry Draft since 1999. The Club was tied with the Plymouth Whalers for top spot in the OHL 14-1-5 Of the thirty-five Battalion players selected by NHLclubs, six were drafted in the first round including: Matt Duchene (Avalanche), Cody Hodgson (Canucks), Wojtek Wolski (Avalanche), Brent Burns (Wild), Raffi Torres (Islanders) and Rostislav Klesla (Blue Jackets). Off the ice, the team gives back to the Brampton community through various successful programs including the Tim Horton Scholastic Player Awards; CN Community Ticket Program; The Home Depot Coach of the Game Program; Adopt A School Program; Elementary Hockey School Tournament. Based on reported statistics2, between 2000-01 and 2009-10 average attendance at Brampton Battalion home games has ranged from a low of 2,090 to a high of 2,734 spectators. During this same time-frame the OHL average attendance has been between 3,273 and 4,073 per game. Since its inception in 1998, the Battalion has attracted more than 1.2 million spectators to the PowerAde Centre.