Red Deer city council opted to invest in Westerner Park’s future by approving $22 million in financing on Tuesday to see the beleaguered exhibition, concert and convention site through the pandemic to better times.
What was described as a “generational” decision by Mayor Tara Veer, council reaffirmed support for the long-term success of Westerner Park, which has hosted agricultural fairs and brought cultural, sporting events and business attractions to the area since 1891.
The alternative to making this sizeable funding investment would be to lose what has for over a century been a huge economic driver in the region, said Veer.
“If we lose Westerner Park, we would not just lose 130 years of history, the upset would be seismic to the community” she added — especially for many local businesses that count on the regular influx of people drawn to events at the exhibition and convention grounds.
How to deliver financial assistance from the city caused much emotional debate, however.
Council appeared initially split over whether a $3-million operational grant, which was recommended by administration to see Westerner Park through the rest of the year, should be provided along with a $19 million loan that would payoff Westerner Park’s unsustainable debt to CIBC for a new exhibition hall.
Coun. Vesna Higham and Lawrence Lee attempted to decrease the grant amount to $1 million, and to add an extra $2 million to the loan portion of financing.
But while the mayor and coun. Frank Wong also supported this amendment, it was ultimately defeated in a tie vote — with councillors Buck Buchanan, Michael Dawe, Ken Johnston and Dianne Wyntjes voting against it. (Coun. Tanya Handley was absent).
The four dissenting councillors argued for supporting the experts’ recommendation for a $3 million grant and a $19 million loan, even though the latter will mean a future council must reconsider some projects in the city’s 10-year capital plan to stay below a debt limit.
Dawe argued this was the best solution that could be found by city manager Allan Seabrooke, new chief financial officer Ray MacIntosh and recently retired CFO Dean Krejci after “hundreds of hours of consideration,” much number crunching, as well as seeking out answers to council’s questions, and working through various options.
“These numbers were not picked out of the air,” stressed an impassioned Dawe.
Wyntjes affirmed Dawe’s sentiment and also expressed her frustration, saying “We have CFOs who have done their homework. Right now, we either accept that or not.”
Johnston and Buchanan also supported the experts’ recommendation, saying Alberta is not sailing through the COVID crisis as expected, so there’s no predicting when crowd events can be restarted.
But in the end, all of council backed the $3-million grant and a $19-million loan to be repaid over 30 years ($10 million on a scheduled repayment plan and the remaining $9 million as is possible, based on annual Westerner Park revenues).
This same administrative recommendation was debated on April 22, when the majority of councillors voted to put off making a decision for up to four weeks to allow administrators to return with answers to some questions.
This time, Veer told council a decision must be made on Tuesday as it would leave only about two days of leeway — when factoring in various required legislative delays — before the deadline for the next provincial loan in July.
As well as committing $22 million to get Westerner Park back on stable financial footing, the city will pay up to $250,000 to cover 50 per cent of the cost of a consultant to review the state of Westerner Park’s facilities and come up with a management plan for doing upgrades and maintenance.
Veer said it was crucial and of mutual benefit to ensure that these capital assets (Westerner Park sits on city-owned land) is taken care of, going forward.
A new relationship agreement between the non-profit and the City of Red Deer was also approved on Tuesday, with the goal of ensuring financial and operating stability of the exhibition grounds by increasing the involvement, legal and financial oversight by the City of Red Deer.
The new framework will allow the city manager to attend Westerner Park meetings, along with some council representative in the board.
But council narrowly defeated an amendment that would have required city council members on the Westerner board to disclose to city administration any “critical” information they hear in closed meetings.
Higham called this a “fail safe” for a unique situation, noting city taxpayers have already granted $7 million to cover shortfalls for the financially beleaguered Westerner Exhibition Association.
But Johnston successfully argued this would be going a step too far, as new checks and balances have been built into the new agreement that already ensure city council would have to approve any new capital developments and review Westerner Park’s finances.
Westerner Park notified the city of its financial instability in late 2019. An independent audit later found questionable decisions were made about building the new exhibition hall during a prolonged recession and under over-estimated revenue projections.
The exhibition grounds took an even harder financial hit in 2020, after event cancellations due to the pandemic.