Red Deer City Council will discuss committing $22 million this week to get Westerner Park back on stable financial footing.
A new agreement between Westerner Park and the City of Red Deer will be considered at a special council meeting on Thursday. The goal is ensuring financial and operating stability for Westerner Park by increasing involvement and legal and financial oversight by the City of Red Deer.
But while city administration is recommending a stronger legal and financial oversight for Westerner Park, it is also proposing financial support of $22 million in response to short-term operational needs, as well as long term-financial sustainability.
The first item recommended is a $3 million cash investment, in the form of a grant, to ensure continued operations of Westerner Park through the pandemic.
A $19 million capital loan is also recommended to enable Westerner Park to pay out an unsustainable loan the non-profit currently holds, related to the expansion of Exhibition Hall.
If approved, the proposed $3 million grant is not expected to impact property taxes as it would be funded through the operating reserve.
However, the $19 million loan would be funded through debt, and with the proposed payback plan, there would be a need to adjust the city’s overall capital plan to accommodate this funding.
“In 2019, Westerner Park notified us about their financial instability, and we have since been working with them to ensure they not only survive the economic downturn and global pandemic, but thrive when in-person events and entertainment can resume,” said city manager Allan Seabrooke.
An independent financial audit found the non-profit has suffered both because of the pandemic causing most events to be cancelled, but also through some poor decisions, such as building a new hall during a prolonged recession and over-estimating the gains from certain contracts.
Seabrooke said without support from the City of Red Deer, Westerner Park cannot continue to operate based on current capital and operating projections.
“It is unfortunate that the city has to consider doing this, but ensuring the success of Westerner Park is mutually beneficial as it drives $150 million in economic activity annually when normal operations are possible. Westerner Park is an important part of the region’s economic recovery and long term community resiliency,” added Seabrooke.
“We based our recommendations for financial support on seven years of data and we are confident Westerner Park will be able to pull through these tough times, pay back any loans received, and thrive.”
In addition to this funding, the recommended Relationship Framework Agreement would mean the city has a higher level of involvement in decision-making, budgeting, lease agreements and other major items relating to Westerner Park.
The proposed agreement also outlines expectations on roles and processes for completing a Master Plan for Westerner Park. The plan is expected to establish the 15-year vision, land use concept, building design principles and site-servicing concept.