Westerner Park is getting up to $2 million from the City of Red Deer to stay operational until at least November, in hopes COVID-19 levels will drop, allowing events to be held there.
Councillors expressed reservations about adding this amount to a previous $1 million that the city granted in January to keep Westerner Park afloat. They said they were not thrilled about taxpayers having to foot this bill.
But “how do we say to the hockey fans, the chuckwagon racers, the retailers, the hotel and restaurant owners, how do we say we won’t support the Westerner, when it brings a minimum of $100 million return into the city?” said Coun. Ken Johnston.
Coun. Lawrence Lee unsuccessfully tried to bring the amount down to $1 million, even though this would only see the Westerner through to September.
He admitted $1 million might be inadequate if more events had to be cancelled due to COVID-19. But Lee said Westerner Park could always come back to the city with a future request, if needed.
However, most other councillors, including Johnston, Michael Dawe, Dianne Wyntjes and Buck Buchanan, felt this wouldn’t give Westerner Park enough stability to rebuild or market itself to attract future events.
(Councillors Frank Wong and Tanya Handley did not vote out of a conflict of interest, since they had recently been city representatives on the Westerner Park board.)
“We have to give the Westerner a fighting chance,” reasoned Johnston — while Dawe felt “it would send a devastating impression” if the city kept giving Westerner Park a series of smaller grants in dribs and drabs.
“It would make a bad situation a lot worse.”
While Mayor Tara Veer initially agreed with Lee’s suggestion of $1 million — saying it would give the city a chance to study the results of a forensic and sustainability audit done on Western Park, and assess what the viral impact is this fall — she sided with the majority and endorsed the up-to-$2-million option in the end.
“This puts the city in an untenable position,” admitted Veer, referring to the choice of either not supporting the Westerner, a big economic driver, or increasing tax bills during a tough economy.
But she approved the $2 million grant because of the importance of the arena and exhibition grounds to the community.
Coun. Vesna Higham and Lee voted against the $2 million grant.
Higham first suggested making it a loan, but was told loan requirements under the Municipal Government Act require too long of waiting periods, which would result in no financial support for the Westerner until the end of October.
Higham then suggested a better option might be to have the city own and direct operations at Westerner Park. She encouraged council to keep an open mind, noting arena facilities in Edmonton, Calgary, Lethbridge and Medicine Hat are all owned by the municipalities. With the exception of Lethbridge, they are operated by non-profit foundations that report directly to the municipalities.
In Red Deer, the city owns the land, but Westerner Park has been operated by a non-profit board for over a century.
Westerner Park’s CEO Mike Olesen, who was only hired in November, revealed at least $300,000 in cash flow a month will be needed for Westerner Park to survive.
He had requested $1 million to $3.5 million in relief funding from the city. The range is needed because of so much uncertainty about how long the impacts of COVID-19 will be felt, he added.
One million dollars would have allowed Westerner Park to only operate until September, when hockey games and trade shows will hopefully be able to start up again, generating revenues.
Olesen’s maximum request of $3.5 million would have sustained Westerner Park until the first part of 2021, if the virus worsens and the province deems no more crowd events can be held until then.
With his $2-million recommendation, Red Deer city manager Allan Seabrooke chose a middle-ground option, taking a calculated guess that some Westerner Park events could start up again by November.
Administration recommended the one-time amount come out of the city’s tax-supported operating reserve. But Seabrooke explained the entire $2 million wouldn’t go to Westerner Park in one lump sum, but would be drawn upon by request when needed, with stringent oversight by the city.
Considering Westerner Park’s diminishing cash flow, it could, otherwise, not continue operating, Olesen told council.
If no other funding sources are found, then options for Westerner Park would have included going into receivership, discontinuing operations, or for the city to take over its operation.
On Wednesday, city council approved a 2021 budget for Westerner Park that shows pandemic repercussions will leave the facility with a $1.2-million deficit. But Olesen hoped that a renegotiated contract with the Canadian Finals Rodeo will help mitigate this.
Olesen revealed that agreeing to an unrealistic contract for the Canadian Finals Rodeo, based on overly optimistic numbers about ticket sales, had contributed to its financial difficulties.
But he noted the CFR was willing to work out a better deal and remains committed to continuing to hold its rodeos in Red Deer.
Westerner Park’s financial difficulties were also exacerbated by the pandemic, which caused the cancellation of big revenue generators, such as Westerner Days and the CFR.
Olesen acknowledged better processes are now in place to keep on top of finances of such a large organization. He told council more regular audits are being done and plans are underway to achieve more community and corporate partnerships, sponsorships and community volunteering opportunities.
Westerner Park needs to show citizens that it’s all about the community, said Olesen.
Several councillors reaffirmed their confidence in the board under his leadership and said Olesen presented a well-drawn-out plan.