RFP Spectator Centre With Appendix

Financial Management Services – Purchasing Division

Request for Proposal – Design Build Consultant

REQUEST FOR PROPOSAL

Design Build Consultant Services

For New Spectator Facility

Closing Date: February 1, 2012 at 2:00:00 P.M.

Public Proposal Opening Date:

For Registration Purposes Only

Committee Room # 1, City Hall February 1, 2012 at 2:30 P.M.

PLEASE NOTE:

Beginning January, 2012 all Request for Proposal and Tender Submissions

must be delivered to

The Reception & Security desk on the Second Floor at City Hall

For any additional information contact, Barbara Cornelius, CPPB

Barbara Cosby, CPPB Purchasing Agents

City Hall, 50 Church Street St. Catharines, Ontario

Telephone 905-688-5601 ext. 1451/1410 Email: [email protected]

[email protected] Fax 905-688-0821



Table of Contents

Mailing Label 3

Introduction 1

Definitions 1

Information and Instructions 3

General 3

Form of Proposals 3

Submission of Proposals 3

Courier Service 4

Clarification of Proposal Documents 4

Addenda / Addendum 5

Errors & Omissions 5

Informal or Unbalanced Proposals 5

Conflict of Interest 5

Bribery/Fraud 6

Processing of Proposals 6

Blackout Period 6

Acceptance of Award 7

Procurement Policy 7

Negotiations 7

General Conditions 8

Insurance 8

Workplace Safety and Insurance Board 8

Indemnification 9

Damage Claims 9

Statutes and Regulations 9

Licenses and Approvals (where required) 9

Non Performance 9

Warranty 10

Ownership of Work Product 10

Environmental Concerns 10



Accessibility 10

Local Labour 11

Network & Computer Software/Hardware Standardization 11

Municipal Freedom of Information and Protection of Privacy Act (MFIPPA) 11

Proposal Requirements 12

Background & Overview 12

Scope of Work 14

Substitutions of Team Members 16

Proposal Content 16

Project Schedule 18

Proposal Evaluation 19

Selection (Evaluation) Criteria 19

Form of Proposal 20

Accessibility Declaration 22

References 23

Mailing Label Appendix A – Spectator Facility Project Overview prepared by SMG Appendix B – Spectator Facility Feasibility Study prepared by Deloitte



Introduction

The Corporation of the City of St. Catharines is inviting proposals for Consulting Services for the new 4,500 to 5,300 seat Spectator Centre. These services are to include Design Build Contractor RFP document preparation; tendering and design development; and construction phase consulting services as described further in this Request for Proposal document. Sealed proposals, with the prescribed Form of Proposal, will be received by the City Clerk or his/her representative, at the Reception and Security desk, City Hall – Second Floor, 50 Church St, St. Catharines, Ontario L2R 7C2, no later than 2:00:00 pm, local time, Wednesday February 1, 2012. Proposals received after this time will be returned unopened. Proposals will be opened at a public opening, for registration purposes only, at 2:30 pm, local time, Wednesday February 1, 2012 in Committee Room #1, City Hall, St Catharines. No details will be made public at the time of opening. By the signing and delivering of a Proposal, the proponent agrees that, if the Proposal is accepted and any necessary agreement is negotiated within the irrevocable period, the proponent will enter into such agreement with the Corporation of the City of St. Catharines in a form satisfactory to the City Solicitor, prior to the commencement of the work. A Proposal shall be prepared and submitted at the sole expense of the proponent and without cost to The Corporation of the City of St. Catharines. All Proposals received by the City Clerk become the property of The Corporation of the City of St. Catharines and as such are subject to the Municipal Freedom of Information and Protection of Privacy Act. A Proposal, whether or not it has been accepted, and any rights there under, shall not be assigned by the proponent without the prior written consent of The Corporation of the City of St. Catharines which shall not under any circumstances relieve the proponent of any liabilities and obligations under the Proposal.

Definitions

The terms “Municipality”, “City” and “Corporation” are to be understood to mean “The Corporation of the City of St. Catharines. “City Council” means the elected Council for the City of St. Catharines. “Proponent”, “Contractor” or “Consultant” means the legal entity submitting a response to a proposal. “Proposal” or “RFP” refers to this Request for Proposal document including appendices and addenda.



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The “Project” or the “Facility” refer to the Spectator Facility. The “IceDogs” or the “Team” refers to the Ontario Hockey League’s Niagara IceDogs hockey team. The “Staff Team” is the lead City staff members comprised from the Economic Development & Tourism; Recreation and Community Services and Transportation and Environmental Services departments.



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Information and Instructions

General

The onus is on the Proponent to show their knowledge, understanding and capacity to conduct the work outlined in the RFP. The responses will be assessed according to how well they meet the City’s needs and assure the City’s success in relation to the submission requirements. The detail and clarity of the written submission will be considered indicative of the Proponent’s expertise and competence. All information provided in response to this RFP must contain sufficient detail to support the services being proposed. Incomplete submissions will not be considered.

Form of Proposals

The Proposal shall be submitted on the Form of Proposal provided by the Purchasing Agent and enclosed in a sealed envelope supplied by the Proponent. The envelope must include seven (7) sets of the submitted proposal, one (1) marked as Original with original signatures and six (6) marked as Copy. Proponents are to affix the attached mailing label, which is the last page of these documents, using their own envelope. The proposal submission must be legible, written in ink, or typewritten. Proposals containing changes, erasures, overwriting, white-outs, cross-outs, or strike-outs which are not initialled by the proponent may not be accepted. The Form of Proposal must contain an original manual signature in ink in the specified place by an authorized signing officer - digital, mechanical or electronic signatures will be rejected. No part of the Form of Proposal included in this package shall be altered or deleted. The completed Proposal shall be dated and properly signed in the space(s) by a duly authorized official(s) of the entity submitting a Proposal. Signatures on behalf of a non-incorporated entity or by individuals shall be witnessed.

Submission of Proposals

The Proposal, sealed with the submission label provided by the City affixed to the Proponents envelope, shall be received, date and time stamped and in the possession of the Corporate Support Services (Clerks) Department no later than (14:00:00 hours) 2:00:00 p.m. local time, on the specified closing date. Late Proposals will be time and date stamped and returned to the Proponent unopened. Please note that starting January 1st, 2012, all Request for Proposal and Tender submissions will be received at the Reception and Security desk on the second floor at



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City Hall only. The City will not take responsibility for any submissions delivered to any other location. Proposals shall not be made by e-mail or facsimile. Adjustment by e-mail, facsimile, letter or otherwise to a Proposal already submitted shall not be accepted or considered. Proposals may be withdrawn prior to the time of opening thereof only by notice in writing to the City Clerk signed by the proponent. A Proposal delivered in person or by a courier service, without the submission envelope, or a Proposal that is not delivered to the designated location by the Proponent or Courier Service may be rejected. The failure of the Proponent or Courier Service to deliver the Proposal submission to the designated location on time shall result in the Proposal being rejected.

Courier Service

Delivery of the Proposal Submission envelope/package through a courier service shall be the responsibility of the Proponent and shall result in the submission being rejected where; the Proposal Submission envelope/package is delivered to a location other than that which is stated on the envelope/package and fails to be delivered to the Reception and Security desk on the second floor of City Hall prior to the closing date and time specified in this document; and/or the Proposal submission envelope/package which is enclosed in the Courier envelope, does not state “PROPOSAL DOCUMENT ENCLOSED” and is not removed from the Courier’s envelope prior to the closing date and time specified in this document; and/or the Proposal Submission envelope/package is delivered later than the closing date and time specified in this document.

Clarification of Proposal Documents

It is the responsibility of the Proponent to seek clarification of any matter that they consider unclear before submitting a proposal. The City of St. Catharines is not responsible for any misunderstanding of the proposal on the part of the Proponent. It is the Proponent’s responsibility to verify the extent of work required under this Project. No allowances will be made for the Proponent failing to do so. Any item not specifically mentioned in the specifications but implied or required to complete the Project will be considered to be included in the total price. Proponents may inquire into and clarify any requirements of this RFP. Inquiries must be directed to the attention of the Purchasing Agent(s) listed on the cover page of this document. In order to manage this process, Proponents are requested to submit all questions in writing, by email or fax to the Purchasing Agent(s) listed on the front cover page, no later than Wednesday, January 25, 2012. Proposals submitted shall be final and may not be altered by subsequent offerings, discussions or commitments unless the proponent is requested to do so by the City of St. Catharines.



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Addenda / Addendum

The City will not be responsible for any verbal (spoken) information from any City staff or from any Consultant firms retained by the City, or from any other person or persons who may have an interest in this RFP. Adjustments or changes to this RFP prior to the closing date and time stated herein will only be by written addendum(s) only and said addendum(s) will be issued by the Purchasing Division of the City of St. Catharines. Addendums will be posted on MERX (www.merx.com). It is the bidder's sole responsibility to check this Web Site often to be informed of any posted Addendum. The City makes no promise or guarantee that addendums will be delivered by any means to any bidder. By submitting a proposal in response to this RFP, the bidder acknowledges and agrees that addendums shall only be posted on the Merx web site and it is the sole responsibility of the bidder to check this Web Site for said addendums. Failure to include signed copies of the addenda with the submitted Proposal may result in a non-compliant proposal.

Errors & Omissions

While the Staff has used considerable efforts to ensure an accurate representation of information of this Request for Proposal, the information contained in this Request for Proposal is supplied solely as a guideline for proponents. The information is not guaranteed or warranted to be accurate, nor is it necessarily comprehensive or exhaustive. Nothing in this Request for Proposal is intended to relieve proponents from forming their own opinions and conclusion in respect of the matters addressed in this Request for Proposal.

Informal or Unbalanced Proposals

Proposals which are incomplete, unconditional, illegible or obscure, or contain reservations, erasures, alterations or irregularities of any kind, may be rejected as informal. Proposals that contain prices which appear to be so unbalanced as likely to adversely affect the interests of the City, may be rejected.

Conflict of Interest

Proponents must disclose to the City in their Proposal any potential conflict of interest, including any which may involve City employees, Council members or members or employees of City agencies, boards, or commissions who may have a financial interest in a Proponent. If such conflict of interest does exist the City may, at its discretion, refuse to consider the Proposal.



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Bribery/Fraud

Should any prospective Proponent or any of their agents give or offer any gratuity or attempt to bribe any employee of the City or attempt to commit fraud, the City shall be at liberty to cancel the prospective submission or contract and to rely upon the surety submitted for compensation.

Processing of Proposals

On receipt by the City Clerk’s representative of a properly sealed envelope delivered by or on behalf of a proponent, the City Clerk or designate will mark the envelope as to the time and date of receipt and the envelope will be retained unopened until the opening of Proposals. The sealed envelopes containing Proposals will be opened in public, for registration purposes only, in the room and at the time specified in this document. After the proposal has been opened, City staff may clarify any aspect of a Proposal with the proponent; however, the City is not required to clarify any part of a Proposal. Any such clarification will not alter the proposal and will not be constituted as a negotiation or renegotiation of the Proposal. Any clarification of a Proposal by a proponent shall not be effective until confirmation has been delivered in writing. The City may make all necessary corrections to any proposal which is in error through addition or extension, the corrected value prevailing. The City retains the right to select any proposal for purposes that are in the best interests of and for the best value for the Corporation and/or to select parts of various proposals or to reject all proposals for budgetary or other reasons that are in the best interests of and for the best value for the City. The City reserves the right to award a Contract to other than the proponent submitting the lowest costs. The selected proponent(s) will be notified after City Council has reviewed and approved the proposal. The issuance of this proposal in no way implies that the City will proceed with an order or contract for the specified items or services and will not reimburse any proponent for any costs incurred in preparing, submitting or presenting a proposal.

Blackout Period

The City prohibits communications with respect to this bid opportunity initiated by a proponent to any City official, consultant or employee for the period of time from the closing of the tender up to and including the date that the Contract has been awarded (the “Black Out Period”). Any communication between the proponent and the City during the Black Out Period will be initiated by the City’s Purchasing Agent for the purpose of obtaining information or clarification necessary in order to ensure a proper and accurate evaluation of the bid. Any communication initiated by a proponent during the Black Out Period may be grounds for disqualifying the offending proponent from consideration for the Contract award.



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Acceptance of Award

Award of this Proposal is subject to the City of St. Catharines Council approval. No announcement concerning the successful bidder will be made until a complete report is prepared by the Purchasing Agent and approved by City Council (if necessary). The successful proponent agrees to be bound by the terms and conditions of this proposal document. The Form of Proposal and proposal submitted become part of the contract document. The successful Proponent must accept a Purchase Order as a contract from the City of St. Catharines which will supersede all other contracts. In the event that this proposal requires a formal contract to be prepared by the City, the successful proponent will properly sign and furnish necessary performance bonds, insurances, Worker’s compensation, etc., as required by the respective proposal within ten (10) days (unless a longer period is allowed by the City) from the date of receipt of the formal contract forms.

Procurement Policy

Submissions will be solicited, received, evaluated, accepted and processed in accordance with the City’s Procurement Policy as amended from time to time. In submitting a proposal in response to this solicitation, the proponent agrees and acknowledges that it has read and will be bound by the terms and conditions of the City’s Procurement Policy.

Negotiations

In the event that a prepared proposal does not precisely and entirely meet the requirements of this RFP, the City reserves the right to enter into negotiations with the selected proponent(s) to arrive at a mutually satisfactory arrangement with respect to any modifications to the proposal.



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General Conditions

The “Form of Proposal” form included in this document must be completed with all the information requested. All pricing proposed must be in Canadian Funds and exclusive of all appropriate taxes. The prices will include all cost related to the work to be performed (i.e. vehicle, equipment, labour, materials, customs, duty, freight, etc.). This proposal submission is irrevocable and open for acceptance by the Corporation of the City of St. Catharines until ninety (90) days after the closing of this proposal. The City is not liable for any costs incurred by interested parties in the preparation of their response to this request or interviews. Furthermore, the City shall not be responsible for any liabilities, cost, expenses, loss or damage incurred, sustained or suffered by any interested party, prior to, subsequent to, or by reason of the acceptance, or non-acceptance by the Corporation of any response, or by reason of any delay in the acceptance of the response.

Insurance

The Proponent shall furnish the City of St. Catharines satisfactory evidence of liability insurance. A copy of a current certificate showing General Liability Insurance in an amount not less than two million ($2,000,000.00) and Professional Liability in an amount not less than two million ($2,000,000.00) shall be provided upon award. All insurance certificates must include an endorsement naming the City of St. Catharines as an additional insured. The successful Proponent is required to maintain insurance at these levels at least one (1) year after completion of the project. Depending on the complexity of the project, successful Proponents may be required to prove valid coverage for a longer period as may be deemed necessary to reasonable allow the City to become aware of any negligence on the part of the consulting firm.

Workplace Safety and Insurance Board

The successful proponent shall furnish a WSIB Clearance Certificate indicating their WSIB firm number, account number and that their account is in good standing. This form must be furnished prior to commencement for work. The successful proponent further agrees to maintain their WSIB account in good standing throughout the contract period. The successful proponent shall submit to the City, prior to the issuance of the proponent’s last payment of each year and at any other time when requested to do so, a statement from the Workers’ Safety Insurance Board that all of the assessments the vendor or any Subcontractor is liable to pay under the Workers’ Safety Insurance Board Act or successor legislation have been paid.



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Indemnification

Without limiting any other obligation of the proponent under this contract or otherwise, the proponent hereby agrees to Indemnify and Save Harmless the Corporation of the City of St. Catharines, its elected officials, officers, employees, servants, agents and others for whom the Corporation is in law responsible, from and against any liability, loss, claims, demands, damages, fines and penalties, costs and expenses (including consulting fees), investigatory and legal expenses, and any other actions or causes of actions, suits, caused by or attributed to any wilful or negligent act, omission, delay, or allegations thereof on the part of the proponent, its officers, employees, subcontractors, agents, licensees, assignees, invites or other persons engaged in the performance, non-performance or attempted performance of the Work pursuant to this Contract or anyone else for whom the proponent is in law responsible.

Should the City be made a part to any litigation commenced by or against the proponent, then the proponent will protect, indemnify and hold the City harmless and will promptly pay all costs, expenses, and legal fees (on a solicitor and own client basis) incurred or paid by the Corporation in connection with such litigation upon demand. The proponent will also promptly pay upon demand all costs, expenses and legal fees (on a solicitor and own client basis) that may be incurred or paid by the City in enforcing the terms, covenants and conditions in this Contract.

Damage Claims

The proponent shall protect the Work, the Owner’s property, and any surrounding private property from damage, and shall be responsible for any damage that may arise as the result of his operations under the Contract.

Statutes and Regulations

The successful proponent shall comply with all Federal, Provincial and Municipal laws and regulations, including but not limited to the Workplace Safety and Insurance Act, the Occupational Health and Safety Act and regulations including W.H.M.I.S. Any required permits or inspections shall be the complete responsibility of the proponent.

Licenses and Approvals (where required)

The successful proponent shall at their own expense, be responsible for maintaining and keeping all municipal and any other licenses, or approvals, necessary to permit them, their employees or company, to carry out the requirements of the agreement.

Non Performance

The City reserves the right to determine non-performance or poor quality of goods and/or services, and further reserves the right to cancel the contract. The opinion of the City of St.



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Catharines in this regard shall be final in all instances. In the event that the Proponent shall be discharged before all the services contemplated hereunder have been completed, or the services are for any reason terminated, stopped or discontinued because of the inability of the Proponent to serve under this agreement, they shall be paid only for that portion of the work which shall have been satisfactorily completed at the time of termination,

Warranty

The successful proponent shall promptly repair or replace, at no cost to the City, all defects in materials or workmanship of which the successful proponent has been properly notified during the term of the contract.

Ownership of Work Product

All plans, drawings, submittals and other documents submitted to the City by the proponent become and are the property of the City, and the City may, without restriction, make use of such documents and underlying concepts as it sees fit. The proponent shall not be liable for any damage that may result from any use of said documents for purposes other than those described in this proposal.

Environmental Concerns

In order to reduce waste and to increase the development and awareness of environmentally sound purchasing, the successful proponent will ensure that wherever possible, terms of reference are amended to provide for expanded use of durable products, reusable products and products (including those used in services) that contain the maximum level of post-consumer waste and/or recyclable content, without significantly affecting the intended use of the products or services. It is recognized that cost analysis is required to ensure that the products are made available at competitive prices.

Accessibility

The City is committed to the accessibility principles of preventing and removing barriers in accessing goods and services for people with disabilities and is bound by the Standards under the Accessibility for Ontarians with Disabilities Act, 2005 as may be amended from time to time.

Regulations enacted under the Act apply to every designated public sector organization and other third parties that provide goods and services to the members of the public. The consultant/contractor, and all sub-contractors hired by the consultant/contractor in the completion of its work, will meet or exceed compliance with all applicable regulations under the Accessibility for Ontarians with Disabilities Act, 2005 as may be amended from time to time.



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It is the consultant/contractors responsibility to ensure they are fully aware of, and meet all requirements under the Act. A Declaration of Accessibility Compliance will be required by the successful bidder.

Local Labour

The successful proponent shall employ only competent and skilled persons, giving preference as far as possible, other conditions being equal, the employment of residents of the City of St. Catharines and shall pay to the persons employed wages at the local rate for work of a similar kind. Foremen and any other personnel may be brought from other places, if such personnel cannot be secured in St. Catharines. The personnel employed upon the work shall be obtained in so far as possible, through the services of Employment and Immigration Canada.

Network & Computer Software/Hardware Standardization

To ensure compatibility with the current City of St. Catharines Systems technical environment all network IP based hardware and all network and/or standalone computer hardware and/or peripherals must be sourced in conjunction with Information Systems. All computer software and applications must be approved by Information Systems.

Municipal Freedom of Information and Protection of Privacy Act (MFIPPA)

In accordance with the Municipal Freedom of Information and Protection of Privacy Act, the information collected in response to the Request for Proposal is collected under the authority of the Corporation of the City of St. Catharines Procurement Policy and the Municipal Act, S.O. 2001, c.25, as amended. The information collected will be used solely for the purpose of evaluating the submissions for supplying external auditing services. All proposals submitted become the property of the City. Because of MFIPPA, respondents are reminded to identify in their proposal material any specific scientific, technical, commercial, proprietary, or similar confidential information, the disclosure of which could cause them injury. Complete proposals are not to be identified as confidential. The City of St. Catharines reserves the right to discuss any and all proposals, to request additional information from proponents and to accept or reject any and all proposals. Questions about the collection of information should be directed to the City Clerk.



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Proposal Requirements

Background & Overview

In June 2008, Council established the Downtown Spectator Facility Task Force to investigate the possible construction of a 5,000-seat arena and spectator facility. In 2009, Council agreed to submit the project for the Government of Canada’s P3 funding. Two months later, in November 2009, Council agreed to undertake a feasibility study of the proposed spectator facility, the primary tenant of which would be the Niagara IceDogs. The feasibility study was completed by Deloitte and presented to Council in May 2011. The study concluded the St. Catharines market could support an Ontario Hockey League average attendance of approximately 4,225 fans per game and a facility with 5,300 to 5,600 seats would service this demand. The feasibility study also estimated construction of the facility would be between $45 million and $56 million or $8,500 to $10,000 per seat. Upon receipt of the feasibility report, Council approved the project in principle “on the basis of satisfactory funding and planning arrangements, the construction of a spectator and entertainment facility in downtown St. Catharines.” Council also agreed to retain a professional event management company to provide advice on the design and planning of the facility. In September 2011, the City retained SMG to provide advice on the design and planning of a spectator facility. The results of this review are contained in this report. St. Catharines City Council, at its meeting of Dec. 5, 2011, supported a motion to build a new 4,500 to 5,300 seat spectator facility to replace the 73-year-old Jack Gatecliff complex. The estimated $50-million state-of-the-art facility will have the OHL’s Niagara IceDogs as an anchor tenant as well as host a number of other special events. The approved budget for this project is $50 million. Program Overview The St. Catharine’s Spectator Facility in order to operate in a maximum revenue position will need a flexible design that allows for a multi-use venue. The following program uses this desire and goal to establish parameters presented herein in square footage terms that will provide this fundamental principal. The program, as currently established, will ensure the ability to host a multitude of event types and many others typical to a multi-purpose spectator facility which provides modern amenities and operational efficiencies consistent with venues of the latest class. The Program estimates the St. Catharine’s Spectator Facility to be 163,483 sq. ft. Although this project is not anticipated to be a LEED qualified project, it is expected that suitable design principals and efforts would be considered and incorporated to ensure that the building is capable of operating at peak efficiently while still meeting the general requirements above.



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General Building The current program calculates to 19,845 sq. ft. earmarked for the Event Floor. By order of definition, the Event Floor is the area apart from the seating bowl and service level support facilities. Spectator Facilities At just over 53,000 sq. ft. (53,131), the Spectator Facilities include such areas as:

Seating Suites Lounges; Club Lounge for Premium Seating Patrons Restrooms Miscellaneous Amenities; First Aid, Concierge Rooms, etc.

Food Service and Merchandising The St. Catherine’s Spectator Facility will be designed with medium to high level standards in the area of Food Service and Merchandising. These elements are vital to the Patron experience. In an environment where discretionary funds for entertainment are sought after by a variety of competing entities, the Spectator Facility must provide great value to its Patrons. The program calls for 13,440 sq. ft. dedicated to food preparation, commissary and delivery functions. The Main Kitchen will produce quantities of appropriate fare at pricing levels acceptable to as many cross sections of economic demographic segments as possible. Additionally, the Main Kitchen will be designed to meet the discriminating tastes of most Suite Patrons. Circulation Vital to the experience is the correct circulation for Patrons. Beyond the minimum requirements as per municipal, provincial and national codes, the program attempts to ensure comfort and ease of access and egress. Circulation includes such items as Concourses and Vertical Transport (Conveyance Systems) and is currently measured at 26,373 sq. ft. Press Facilities Vital to any venue that will serve as a showcase for sporting events are appropriately appointed Press Facilities. In this program, over 2,258 sq. ft. has been identified for such functions as Working Press, Broadcast Booth, Radio & TV, Press Dining, Production and more. Building Operations or Back of House Support Often forgotten, and potentially the most impactful on effectuating an efficient operation, are the Building Operations areas. In the program, Administrative, Security, Storage, Supplies, Maintenance, Zamboni, Ice Pit, Skate Rental/Dressing, and other similar spaces encompass 20,034 sq. ft. Ticketing A venue that will serve the needs of Patrons for a large number of event types over a short period of time will require a fluid Ticketing/Box Office operation. In this program, the Ticketing area will be designed to approximately 809 sq. ft.



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Team Facilities After close consultation with the IceDogs, the Team Facilities have been programed at 18,984 sq. ft. This figure includes 12,000 sq. ft. dedicated to the IceDogs with the balance distributed over Visiting, three Auxiliary Locker Rooms (critical for tournament needs) and two Concert/Event support facilities that will be able to function as additional Auxiliary Locker Rooms. Mechanical Necessary physical plant elements, such as HVAC, Electrical, Telecom, Ice Plant spaces account for 8,610 sq. ft. Preferred Site Soil Contamination AMEC Earth & Environmental completed phase one and two environmental assessments on the lower level parking lot beginning in 2007, which identified contaminants on site that exceeded Ministry of the Environment (MOE) criteria. In July 2010, a site specific risk assessment to address these exceedances was submitted to the MOE for approval. The risk assessment does not identify any unacceptable risks at the surface but does identify risks in the subsurface soils (more than 1.5 metres below ground). A draft risk management plan was prepared to address these risks and is currently being reviewed by the MOE. If approved, the risk management plan would affect future activities at the site with the most significant aspect being a soil management plan that will require steps to mitigate any impacts from construction activities on site, such as making sure dust or mud from trucks does not leave the site. Generally speaking, the proposed risk management measures are not considered onerous. The City has submitted a revised risk assessment report and risk management plan to the MOE that addresses a recent regulatory amendment that changed some of the risk assessment submission requirements. The MOE has indicated that they are willing to work with the City and our consultants to ensure an expedited review. Acceptance is expected by spring 2012. Geotechnical integrity Numerous geotechnical reports have been prepared for this property, which indicated that, due to the amount of fill and poor geotechnical soil conditions, any proposed building will require deep foundations. Once a preliminary design of the spectator facility is complete, additional geotechnical investigations will be required to re-confirm the local conditions; for example, it is probable that pilings may need to be advanced to the depth of bedrock.

Scope of Work

The City of St. Catharines is soliciting proposals for consulting services for the new 4500-5300 seat Spectator Centre from proponents who have the necessary qualifications and experience to provide the type of services described in the Request for Proposal. These services are to include, but not be limited to design/build RFP document preparation; tendering and design development; and construction phase consulting services. The consultant shall report to the City’s Project Team.



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The specific services required by the consultant are defined in the following project phases: Phase 1 – Design/Build RFP Preparation Phase 2 – Tendering and Design Development Phase 3 – Construction

Phase 1 – Design/Build RFP Preparation The Design/Build RFP Preparation Phase will consist of meetings with City staff, user groups and other stakeholders, the development of the RFP document and presentation to Council. The Consultant shall:

Review the Deloitte feasibility study, the SMG report, the City’s Sustainability Strategy and other related documents and provide areas of concern;

Conduct a user group meeting, a City staff meeting, and meetings with the Project Team;

Produce minutes of all such meetings clearly identifying the actionable items within 72 hours of the meeting;

Coordinate a schematic design to provide guidance for the overall building design; Coordinate a geotechnical investigation of the site based on the general building

location; Develop a maintenance component to the overall design/build model that includes

assurances for long term quality control of the maintenance contract. Prepare the Design/Build team prequalification document and assist in the qualification

process; Develop the RFP document for the selection of the final Design/Build team from the

prequalification process, following the City‘s Procurement Policy; emphasizing a fair, open and transparent competitive bid process; and in conjunction with the City’s Purchasing Agents;

Participate in the presentation to Council

Phase 2 – Tendering and Design Development During the Tendering and Design Development Phase the Consultant shall be responsible for providing assistance and technical guidance on all queries, questions and to participate in the Design/Build Contractor RFP evaluation and selection. The Consultant shall:

Prepare the advertisement on either the Merx or Biddingo website; Assist during the RFP period, including answering questions and preparing addenda Assist in the evaluation process, including developing an evaluation matrix, reporting,

analysing and evaluating proposals based on selection criteria; Participate in submission review meetings with the Project Team, produce minutes of

these meetings and assist the City in evaluating all substitute and alternate materials, equipment, designs, components including costing benefits as provided by Design/Build Contractor RFP submissions;

Participate in interviews with short-listed proponents and produce minutes of these interviews clearly identifying the points of interest discussed;

Assist City staff with developing the report to Council and participate in the presentation to Council;



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Assist City’s Legal Services staff with the contract preparation; Attend design meetings and provide minutes of these meetings. The successful

consultant will be required to ensure the facility is designed for sustainability and energy efficiency.

Phase 3 – Construction The Construction Phase will follow the project through to the conclusion of the building of the Spectator Facility and the Consultant assume the role of the City’s representative and has the delegated authority to ensure the successful completion of all aspects and phases of the Project. The Consultant shall:

Conduct all necessary pre-construction meetings, site meetings and meetings with the Project Team necessary to maintain lines of communication.

Produce minutes of all such meetings clearly identifying all items of discussion within 72 hours of the meeting;

Ensure that all bonds, insurance policies and worker’s compensation certificates are provided by the Design Build contractor and all subcontractors in accordance with contract requirements;

Produce monthly progress reports; Analyse and evaluate progress and produce contractor payment certificates; Provide contract administration and project management services. Note: The City may

decide to assign these services to City staff or contract these services out to another party; therefore, these services should be priced as a separate line item in the fee calculation.

Prepare post construction documents including all warranty reviews.

Substitutions of Team Members

The Consultant shall not remove or change its proposed key team members, once committed to the Project, unless approved by the City. Substitutions to the proposed key team members may be considered it the individual voluntarily resigns from the Consultant’s firm or is terminated by the Consultant’s firm or is absent due to illness or vacation or at the City’s discretion. The Consultant must prove in a manner satisfactory to the City that substitute key team members are of equal or greater qualifications than the proposed individual. Substitute key team members shall be approved by the City subject to submission of detailed qualifications as outlined herein. The City shall receive seven (7) business days’ written notice from the Consultant prior to substituting an individual, if a change is necessitated by the Consultant. If the City requests a change to any key team member, the City shall provide seven (7) business days’ notice to the consultant to offer an acceptable substitute.

Proposal Content

The Proposal should address each of the service requirements specified in the Scope of Work, the Selection Criteria and Form of Proposal.



17

Fees stated in the proposal document will be in a “fixed fee” format. The fees quoted will not escalate beyond the fixed fee amount unless approved in writing by the City’s Project Team and will only be approved if there is a material change in the scope of work. Fees based on a percentage of construction will not be entertained. The consultant’s work program may be subject to additions or modifications by the City. While disbursements will be considered for reimbursement, only those expenses listed in the appropriate space on the Fixed Fee Summary accompanying the Form of Proposal will be considered. The proposal should include: 1. Understanding of the Project A written statement demonstrating the Consultant’s understanding of the project, including the scope of work. Provide in text or graphic format a representation of your expected approach using completed projects of like functionality. 2. Experience and Qualifications of the Consultant’s Corporate Team Describe the experience of the firm and sub-consultants assigned to this design build project, along with examples of projects similar in scope of work. A minimum of three previous client references must be provided for each of: Design Build Consultant firm, and each of the sub-consultant firms. Each reference must include a contact name, address, phone number and project description. The City reserves the right to investigate other than listed references. Further, where the City is relying on the services of a Consultant in the conduct of the project, the knowledge of that Consultant will also be considered. Highlight previous team experience and identify the projects that the consultant firm has delivered together with the selected sub-consultants in the past. Document the Consultant firm’s approach to scope and quality control, schedule control and budget control practices. Following the guidelines of the City’s Sustainability Study, explain how the Consultant firm intends to utilize local labour and local skilled trades. 3. Experience of Individual Team Members Identify and provide evidence of the expertise and experience of the Project Leader, as well as the individuals in each of the technical disciplines that will assume responsibility for the Project. Include at least:

- Name - Corporate affiliation - Role on the Project, including the period for which the individual is to be associated with

the project, and the extent of the individual’s time that will be devoted to the project during that period

- A list of projects completed within the past 10 years on which this individual has provided services comparable to the services contemplated for the Project (maximum of four projects per individual). For each of the listed projects include: project name, description of project and role of the individual, construction budget, year design was



18

completed, the owner’s name and the owner’s contact information (name, address, phone number and email address)

4. Design Build Consultant Firm Effort Level Provide a table, broken down into the three (3) project phases indicating the major tasks and hourly effort assigned to each of the identified team members. For each meeting type (Project Team, User Groups, City Staff, etc.) identify the team member who will attend and provide the firm’s commitment that each team member will attend and will not be substituted without written approval from the City. 5. Proposed Work Plan and Schedule Provide a work plan and schedule to complete the assignment broken down into the three (3) project phases. Identify the point in the project when the meetings with Stakeholders, Project Team members, etc. will take place. Identify the allotted times for the Project Team to receive and approve each of the identified project deliverables. Also provide example templates of the sample performance documents that the Consultant has used on past projects.

Project Schedule

The key milestone dates for the project are indicated below:

Task Date Issue Request for Proposal January 10, 2012 Last Date for Questions Regarding RFP January 25, 2012 RFP Closing February 1, 2012 Interviews of Shortlisted Proposals Week of February 13th, 2012 Selection of Design Build Consultant February 27, 2012 Construction to Start August, 2012 Ownership to Transfer to City Summer 2014



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Proposal Evaluation

The Request for Proposal is intended to provide a framework for the City to evaluate each proposal and determine which submission most closely addresses the City’s needs. Proponents are encouraged to provide any additional information or innovative approaches not specifically outlined in the context of this proposal. Proposals will be evaluated on the basis of information provided by the consultant at the time of the submission as well as by the City checking references that reveal the previous experience of the consultant in comparable projects. Proponents are advised that only complete submissions will be reviewed and evaluated. Proposals will be evaluated by an evaluation/selection team comprised of staff with the relevant expertise along with the Purchasing Agent(s). The committee will review proposals against the established criteria, interview selected proponents, if required, and reach a consensus on the final rating results. If the selection team determines that interviews are required the date, time and location of the interviews will be communicated to shortlisted Proponents only.

Selection (Evaluation) Criteria

Evaluation of proposals will be assessed primarily according to the Proponent’s experience and technical merit, with minimal emphasis on cost. The following are the key criteria that will be used to evaluate the proposals. The list is not in any particular order of priority. The City will base its selection on a combination of the following criteria as a minimum:

A clear understanding of the project’s objectives, goals and vision Experience and qualifications of the Consultant firm team Experience of the individual team members Quality and Innovation, which may include a comprehensive submission with attention to

detail and elements or perspectives not included in the RFP but may add value to the project

Consultant effort level and project deliverables Project work plan and schedule for completion Value for money based on fees quoted in the proposal

While cost is clearly a very important factor, the City will select a proponent using all of the criteria listed above.



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Form of Proposal

To: The City of St. Catharines I/We the undersigned, hereby offer and agree to supply and delivery the service as outlined in the Request for Proposal documents. The signature(s) below dignify that I/we have read and agree with the procedures outlined in the Request for Proposal document.

PROPOSAL SUBMITTED BY :

Company Name

Address

City & Province

Postal Code

Phone

Facsimile

Email

Website

Signature

Print/Type Name

Title

Dated



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Form of Proposal con’t

FIXED FEE SUMMARY

FIXED FEE Phase 1 Design/Build RFP Preparation $

Phase 2 Tendering and Design Development $

Phase 3 Construction (excluding Contract Administration and Project Management)

$

Optional Item Contract Administration and Project Management $

Subtotal Fixed Fees

$

Disbursements List reimbursable expenses to be claimed:

$

Subtotal Fixed Fees & Disbursements

$

HST at 13% $

TOTAL UPSET FEES

$



22

Accessibility Declaration

Declaration of Accessibility Compliance

Company Name:

Print name:

Title: Dated:

I/ we acknowledge that as a Contractor/Consultant of the City of St. Catharines we are bound to comply with all accessibility Standards under the Accessibility for Ontarians with Disabilities Act, 2005 as amended from time to time. I/we declare that I/we have read, understand and will meet or exceed all enacted accessibility Standards as amended from time to time. I/we further declare that I/we will undertake to ensure all sub-contractors hired by us in completion of our work will also comply with the above Standards.

Authorized Signature:

Dated:



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References

Proponents are required to provide three (3) references listing contracts similar to the project described in this proposal and undertaken within the past three (3) years.

1. Name of the Firm/Organization:

Contact Name: Telephone:

E-mail:



E-mail:



E-mail:

The City reserves the right to check additional references and sources to those supplied by the Proponent.

VENDOR NAME:

ADDRESS:

CONTACT PERSON:

TELEPHONE NO.:

REQUEST FOR PROPOSAL

DELIVER UNOPENED TO:

THE CITY OF ST. CATHARINES

RECEPTION AND SECURITY CITY HALL – SECOND FLOOR

50 CHURCH ST. P.O. BOX 3012

ST. CATHARINES, ONTARIO L2R 7C2

ATTENTION: THE CITY CLERK

REQUEST FOR PROPOSAL FOR: Design Build Consultant Services CLOSING DATE: Wednesday February 1, 2012 @ 2:00 PM

SUBMISSION LABEL: Please complete the additional information (Vendor Name, Address, Contact name and Phone number) and then attach this label on the outside of YOUR bid submission envelope(s) to clearly identify the submission and the vendor information.

Spectator Facility Project Overview

St. Catharines City Council, at its meeting of Dec. 5, 2011, supported a motion to build a new 4,500 to 5,300 seat spectator facility to replace the 73-year-old Jack Gatecliff complex. The estimated $50-million state-of-the-art facility will have the OHL’s Niagara IceDogs as an anchor tenant as well as host a number of other special events. Program Introduction The program being developed for the St. Catharine’s Spectator Facility by SMG has been based on discussions or interviews with various parties interested in the proposed Spectator Facility. Of these parties, the IceDogs, City of St. Catharine’s and others took part in interviews. Additionally, SMG used similar venue types for baseline assumptions in this program. The following will describe in general terms the expected benefits for each of the major categories of the Program Worksheet. Program Overview The St. Catharine’s Spectator Facility in order to operate in a maximum revenue position will need a flexible design that allows for a multi-use venue. The following program uses this desire and goal to establish parameters presented herein in square footage terms that will provide this fundamental principal. As an example the following event types or uses are examples of the event mix considered as a basis for this program. It should be noted that the list is not all encompassing and if properly designed the St. Catharine’s Spectator Facility should have the capacity to host various types of events. Sporting Events, such as:

• Hockey • Basketball • Indoor Football • Curling

• Speed Skating • Lacrosse • Gymnastics • Figure Skating • Dance • Amateur and high school events and tournaments in various sports including

those above, the following and many others such as volleyball, wrestling, indoor soccer, tennis, and cheerleading.

Family Shows such as:

• Disney Live! Phineas & Ferb, Sesame Street Live!, Yo Gabba Gabba, Batman Live!, How To Train Your Dragon, Big Time Rush and circuses

Religious and Political Gatherings Graduations (high school and college) Ice Shows such as:

• Disney On Ice • Stars On Ice

Boxing, Wrestling & Mixed Martial Arts Community Events, such as:

• Fundraising • Banquets • Social Events • Consumer Shows such as: Hunting & Fishing, Boat & RV, Gun & Knife, Dog &

Cat, Home & Garden, Flower, Bridal, and Retail Festival Events, such as:

• Taste of St. Catharines • Niagara Wines • Craft Beer, Octoberfest • Ribfest

Public Recreational Skating, Hockey & Figure Skating The program, as currently established, will ensure the ability to host the preceding event types and many others typical to a multi-purpose spectator facility which provides modern amenities and operational efficiencies consistent with venues of the latest class.

General Building The current program calculates to 19,845 sq. ft. earmarked for the Event Floor. By order of definition, the Event Floor is the area apart from the seating bowl and service level support facilities. Spectator Facilities At just over 53,000 sq. ft. (53,131), the Spectator Facilities include:

• Seating • Suites • Lounges; Club Lounge for Premium Seating Patrons • Restrooms • Miscellaneous Amenities; First Aid, Concierge Rooms, etc.

Food Service and Merchandising The St. Catherine’s Spectator Facility will be designed with medium to high level standards in the area of Food Service and Merchandising. These elements are vital to the Patron experience. In an environment where discretionary funds for entertainment are sought after by a variety of competing entities, the Spectator Facility must provide great value to its Patrons. The program calls for 13,440 sq. ft. dedicated to food preparation, commissary and delivery functions. The Main Kitchen will produce quantities of appropriate fare at pricing levels acceptable to as many cross sections of economic demographic segments as possible. Additionally, the Main Kitchen will be designed to meet the discriminating tastes of most Suite Patrons. Circulation Vital to the experience is the correct circulation for Patrons. Beyond the minimum requirements as per municipal, provincial and national codes, the program attempts to ensure comfort and ease of access and egress. Circulation includes such items as Concourses and Vertical Transport (Conveyance Systems) and is currently measured at 26,373 sq. ft. Press Facilities Vital to any venue that will serve as a showcase for sporting events are appropriately appointed Press Facilities. In this program, over 2,258 sq. ft. has been identified for such functions as Working Press, Broadcast Booth, Radio & TV, Press Dining, Production and more.

Building Operations or Back of House Support Often forgotten, and potentially the most impactful on effectuating an efficient operation, are the Building Operations areas. In the program, Administrative, Security, Storage, Supplies, Maintenance, Zamboni, Ice Pit, Skate Rental/Dressing, and other similar spaces encompass 20,034 sq. ft. Ticketing A venue that will serve the needs of Patrons for a large number of event types over a short period of time will require a fluid Ticketing/Box Office operation. In this program, the Ticketing area will be designed to approximately 809 sq. ft. Team Facilities After close consultation with the IceDogs, the Team Facilities have been programed at 18,984 sq. ft. This figure includes 12,000 sq. ft. dedicated to the IceDogs with the balance distributed over Visiting, three Auxiliary Locker Rooms (critical for tournament needs) and two Concert/Event support facilities that will be able to function as additional Auxiliary Locker Rooms. Mechanical Necessary physical plant elements: HVAC, Electrical, Telecom, Ice Plant spaces account for 8,610 sq. ft. In conclusion, the Program estimates the St. Catharine’s Spectator Facility to be 163,483 sq. ft.

St Catharines Program Worksheet 4.5k seats 163k sqft 112911.xlsx11/29/11

St. Catherine's Summary1 of 1

SMG ConfidentialAll Rights Reserved

Area EstimatesUnits Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters

Total Category I: General Building 19,845 1,844 Total Category II: Spectator Facilities 53,131 4,936 Total Category III: Food Service and Merchandising 13,440 1,249 Total Category IV: Circulation 26,373 2,450 Total Category V: Press Facilities 2,258 210 Total Category VI: Building Operations/Support 20,034 1,861 Total Category VII: Ticketing Administrative Facilities 809 75 Total Category VIII: Team Facilities 18,984 1,764 Total Category IX: Mechanical 8,610 800

Building Total 163,483 15,188

Net-‐To-‐Gross Multiplier (N/A applied at each Category Section) -‐ Estimate of Building Square Footage 163,483 15,188

Summary

CommentsCategory Totals

St Catharines Program Worksheet 4.5k seats 163k sqft 112911.xlsx11/29/11 Catagories I and II

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Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters CommentsEvent Floor a. Event Floor 0 0

Arena Football -‐ 85' x 198' and 90' x 210' clear (18,900 sq. ft.)Basketball -‐ 50' x 94' playing court; 70' x 134' clear (9,380 sq. ft.)Concert/Stage Shows/ Circus -‐ 85' x 200'International Ice Shows -‐ 100' x 200'NHL Hockey -‐ 85' x 200' rink (17,000 sq. ft.)Indoor Soccer -‐ 15-‐25 m wide x 25-‐42 m longEvent Floor Totals 1 18,900 18,900 1,756

Follow Spots a. Cross Court 2 -‐ -‐ b. Corners 8 -‐ -‐ c. End Zones 2 -‐ -‐ Follow Spots Totals 12 -‐ -‐

Sub-‐Total 18,900 1,756 design contingency multiplier (5%) 945 88 Totals 19,845 1,844

Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters Comments

Patron Seating 4,500 permanent arena seats will be dispersed across the following categories in a U-‐Shaped Bowl configuration

Potential to add portable seats on risers in "U" to increase capacity by approximately 500.

a. Upper Bowl armchair seating (19'' min width): 7 0 0b. Lower Bowl armchair seating (20'' min width): 4,108 7 28,756 2,672c. Club seating (21" min width): 200 7.5 1,500 139d. Suite seating (24" min width) : Calculate suite totals below before entering suite seat units 192 11 2,112 196Patron Seating Totals: 4,500 32,368 3,007e. Wheelchair seating calculator: (1% of total seating capacity for standard configuration) 45 0 0Note: Layout of wheelchair seating should be coordinated with local disabled organizations and building authorities. Adjust seating units with wheelchair seating units when finalized.

Suites Suites will be provided with heating and air conditioning and will contain a built-‐in bar counter that includes a refrigerator, sink and lockable storage. Closed-‐circuit TV, radio, and P.A. sound options will also be provided. a. Number of suites (no toilets) 24 250 6,000 557

a.1. Number of Seats per Suite 8b. Number of "Bunker" Suites 500 0 0c. Number of Future Suites 350 0 0Suite Totals: 32 6,000 557

Lounges a. Club Lounge:a1. Occupancy: (1/2 Club + 1/4 Suites) 148 11 1,628 151a2. Men's bathroom fixtures: (1:250 WC, 1:60 Urinals, 1:125 Lavs) 4 50 212 20a3. Women's bathroom fixtures: (1:60 WC, 1:150 Lavs) 2 50 100 9a4. Family toilets 1 80 80 7a5. Pantry and bar 1 1,800 1,800 167

Club Lounge Sub-‐Total 3,820 355Number of Club Lounges multiplier (enter units only)Club Lounge Totals: 0 0

note: Club lounges may differ in size. Adjust club lounge multiplier as needed for accuracyb. Suite Lounge

b1. Occupancy 11 0 0b2. Men's bathroom fixtures (1:100 WC, 1:40 Urinals, 1:150 Lavs) 0 50 0 0b3. Women's bathroom fixtures (1:30 WC, 1:100 Lavs) 0 50 0 0b4. Family toilets 80 0 0b5. Pantry and bar 500 0 0

Suite Lounge Sub-‐Totals 0 0Number of Suite Lounges (enter units only)Suite Lounge Totals: 0 0

Overall Lounge Totals: 0 0

Upper Bowl may not be necessary due to number of fixed seats.

Space DescriptionSpace Type

Space Type Space Description

Category I: General Area Estimates

Category II: Spectator Facilities Area Estimates

Area for Follow Spots is captured in rigging steel or upper level bowl.

St Catharines Program Worksheet 4.5k seats 163k sqft 112911.xlsx11/29/11 Catagories I and II


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Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters CommentsPublic Toilets The bathroom fixture count will be based on a 50% male to 50% female

ratio

a. Main Concourse Levela1. Men's toilets: (1:250 WC, 1:70 Urinals, 1:150 Lavs) 48 45 2,181 203a2. Women's toilets: (1:60 WC, 1:150 Lavs) 59 45 2,650 246a3. Family toilets 2 80 160 15

Main Concourse Toilets Sub-‐Total 4,990 464b. Suite Level

b1. Men's toilets: (1:300 WC, 1:75 Urinals, 1:150 Lavs) 20 45 900 84b2. Women's toilets: (1:70 WC, 1:150 Lavs) 20 45 900 84b3. Family toilets 2 80 160 15

c. Upper Concourse Levelb1. Men's toilets: (1:300 WC, 1:75 Urinals, 1:150 Lavs) 0 45 0 0b2. Women's toilets: (1:70 WC, 1:150 Lavs) 0 45 0 0b3. Family toilets 0 80 0 0

Upper Concourse Toilets Sub-‐Total 0 0Overall Public Toilets Total: 4,990 464

Event Level Toilets Public toilets will be provided on the Service Level for use by concert attendees with floor seating. a. Floor Seats: enter amount of floor seats for concerts. 1,800 Floor Seats through FF&Eb. Men's toilets: (1:300 WC, 1:75 Urinals, 1:150 Lavs) 21 50 1,050 98c. Women's toilets: (1:70 WC, 1:150 Lavs) 19 50 943 88d. Family toilets 1 80 80 7Event Level Toilets Total: 2,073 193

Concourse Amenities

Concourse will provide generous, open, barrier free circulation on the concourse for entering and exiting.

a. Spectator Assistance: (can double as ticket office waiting area) 1 300 300 28b. Information and Lost and Found Booth 1 200 200 19c. First Aid Room for patron use 1 600 600 56d. Satellite facilities for patron use 1 250 250 23Concourse Amenities Totals 1,350 125

Sub-‐Total 50,601 4,701design contingency multiplier (5% -‐ excludes seating bowl) 2,530 235Spectator Facilities Total 53,131 4,936

Upper Bowl may not be necessary due to number of fixed seats.

Category II: Spectator Facilities

Space Type Space Description Area Estimates

St Catharines Program Worksheet 4.5k seats 163k sqft 112911.xlsx11/29/11 Catagories III and IV


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Area EstimatesUnits Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters Comments

Concession StandsConcession stands will be placed at regular intervals on each concourse. a. Upper Concourse Level: point of sale (1:125) 0 100 0 0 Upper Con. N/Ab. Main Concourse Level: point of sale (1:125) 36 100 3,600 334c. Event Concourse Level: point of sale (1:150) 12 100 1,200 111d. Club Level: (1:100) 4 100 400 37e. Vendor's Commissary: ( 1:300 vendor to spectator) 0 4,000 0 0Concession Stands Totals 5,200 483

Eating Areas Space containing tables and chairs where spectators can sit and eat. (optional)a. Food Court -‐ eating area near a group of concession stands 1,000 0 0b. Restaurant with kitchen, toilets, circulation (15 SF per person): 15,000 0 0Eating Areas Totals 0 0

Kitchens a. Central Kitchen -‐ main production kitchen for concession stands. Contains pantries for holding food for the suites, warming ovens, refrigeration and other necessary equipment. 1 3,000 3,000 279 Reduced from 4k 11/22/11b. Central Dispensing Beer Coolers 2 800 1,600 149c. Empties Storage 1 700 700 65d. Vendor Pantries 2 425 850 79e. Commissary Storage/Receiving/Preparation 0 500 0 0 Incl in Kitchen 11/22/11Kitchens Totals 6,150 571

Food Service Administration a. Concession Manager office 0 200 0 0 Incl in Kitchen 11/22/11

b. Assistants' office 0 180 0 0c. Area for reception and copier 0 150 0 0d. Staff lockers/ toilets 1 500 500 46 Shall incl Building Staff 11/22/11e. Uniform Distribution 1 150 150 14Food Service Administration Totals 650 60

Merchandising a. Merchandise Store (Team Store) -‐ located on main concourse level with public assess from outside as well as inside 1 800 800 74 800 sq. ft. in IceDogs requestb. Permanent Novelty Stands 0 240 0 0 Portable Stands to be usedc. Portable Novelty Stands 0 180 0 0d. Novelty Storage 0 1,000 0 0Merchandising Totals 800 74

Sub-‐Total 12,800 1,189design contingency multiplier (5%) 640 59Food Service and Merchandising Total 13,440 1,249

Area EstimatesUnits Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters Comments

Lobbies a. Employee/Practice Facility lobby 0 1,200 0 0 Removed on 11/22/11b. VIP Lobby Entrance 0 2,000 0 0 Removed on 11/22/11Lobbies Totals 0 0

Concourses a. Main Level Concourse (Directly related to 4 sq. ft. / Fixed Seat) 1 16,432 16,432 1,527 Based on 4 sq. ft. per person

b. Upper Level Concourse 0 8,750 0 0 Upper Level not necessary.

Concourses Totals 16,432 1,527Corridors a. Service Corridor on Event Floor Level 1 8,000 8,000 743

b. Suite Corridors at Suite Level 4,500 0 0c. Suite Corridors at Suite Level for future suites 2,000 0 0d. Press Corridor 5,000 0 0Corridors Totals 8,000 743

Vertical Circulation a. Number of Disabled Accessible Passenger Elevator: 3 125 375 35

b .Number of Service Freight Elevator: (10,000 lbs.) 1 200 200 19 Potential VE depending on sitec. Number of Passenger/Service Elevators 1 110 110 10d Number of Stairwells 10 0 0e. Number of Escalators 0 0Vertical Circulation Totals 685 64

Sub-‐Total 25,117 2,333design contingency multiplier (5%) 1,256 117 Circulation Total 26,373 2,450

Category III: Food Service and Merchandising



Category IV: Circulation

St Catharines Program Worksheet 4.5k seats 163k sqft 112911.xlsx11/29/11 Catagories V and VI


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Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters CommentsPress Entrance Press will have a separate entrance for check in upon arrival

a. Media check-‐in and accreditation 250 Deemed N/APress Entrance Totalsa. Writing press working facility 1 400 400 37 b. TV broadcasting working facility 1 150 150 14 c . Radio broadcasting working facility 1 150 150 14 d. Public Address working facility 0 150 -‐ -‐ Removed 11/22/11e. Editing working facility (digital/print) 1 150 150 14 f. Secured Storage 1 100 100 9 g. Dining area 0 1500 -‐ -‐ Removed 11/22/11h. Toilets (press only) 0 250 -‐ -‐ Removed 11/22/11i. Multi-‐Purpose room for press conferences and team meetings 0 1250 -‐ -‐ j. Television studio 1500 -‐ -‐ k. Interview Room 0 320 -‐ -‐ Removed 11/22/11Press Accommodations Totals 950 88 a. Scoreboard Operator Booth 1 100 100 9 b. Sound and Light Booth 1 100 100 9 c. Video Board Control Room 1 350 350 33 d. Equipment Room 1 500 500 46 e. Broadcast Connections 1 150 150 14 Media/Production Control Rooms Totals 1,200 111

Camera Locations Locations for television cameras will be located at the following positions: -‐ -‐ a. Low-‐level Center -‐ -‐ b. Low-‐level Slash -‐ -‐ c. Mid-‐level End -‐ -‐ d. Mid-‐level Center -‐ -‐ e. Mid-‐level Corner -‐ -‐ Camera Locations Totals -‐ -‐

Sub-‐Total 2,150 200 design contingency multiplier (5%) 108 10 Category 5: Press/Media Facilities Totals 2,258 210

Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters CommentsArena

AdministrationAdministration offices will include but are not limited to the following spaces:

a. Reception/secretary 1 200 200 19b. Manager's office 1 180 180 17c. Various Open Office Environment 14 150 2,100 195 Reduced on 11/29/11d. Open Office Space -‐ Marketing/Promotions/Scheduling and Support 0 800 0 0 Eliminated on 11/29/11e. Conference room 1 400 400 37f. Kitchenette 1 250 250 23g. Mail/Copy/Supply/Storage 1 240 240 22Arena Administration Totals 3,370 313

Ice Facilities a. Ice plant 1 1,600 1,600 149b. Indirect brine refrigeration system header pit 0 0 Captured in Event Floorc. Ice pit 1 150 150 14d. Ice paint and equipment storage area 1 500 500 46e. Zamboni storage 2 300 600 56Ice Facilities Totals 2,850 265


Category V: Press Facilities


Category VI: Building Operations/Support

Press Accommodations

Media/Production Control Rooms

St Catharines Program Worksheet 4.5k seats 163k sqft 112911.xlsx11/29/11 Catagories V and VI


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Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters CommentsSecurity a. Security Office 1 150 150 14 Reduced on 11/29/11

b. Detention rooms 0 75 0 0 Eliminated on 11/29/11c. Security storage 0 150 0 0 Eliminated on 11/29/11d. Fire Command Center 0 200 0 0 Eliminated on 11/29/11e. Toilets 1 80 80 7Security Totals 230 21

Loading Staging a. Loading/Unloading area 1 2,000 2,000 186 Reduced on 11/29/11b. Loading Dock (24' wide x 16' high drive-‐in-‐door) 3 800 2,400 223c. Trash area 2 100 200 19 Reduced on 11/29/11d. Dock office 0 100 0 0 Eliminated on 11/29/11e. Refrigerated compactor room 800 0 0 Deemed N/ALoading Staging Totals 4,600 427a. Court equipment storage 1 2,500 2,500 232 Reduced on 11/29/11b. Tables, chairs and platforms storage 1 2,500 2,500 232 Reduced on 11/29/11c. Technical equipment storage 1 100 100 9 Eliminated on 11/29/11d. Promotions storage 1 325 325 30 Reduced on 11/29/11e. Pyrotechnics storage 1 175 175 16 Reduced on 11/29/11f. Office/General building storage 1 500 500 46 Eliminated on 11/29/11Total Miscellaneous Event Storage 6,100 567

Employee Locker and Work Rooms

a. Employee locker rooms (enough lockers for 25 males and for 25 females). 0 300 0 0

Removed on 11/22/11 now in Food Serv. Area

b. Operations Supervisor office 1 150 150 14 Reduced on 11/29/11c. Staff break room 0 400 0 0 Eliminated on 11/29/11d. Other offices 2 150 300 28 Reduced on 11/29/11Employee Locker and Work Rooms Totals 450 42

Maintenance Maintenance shops should be located at the arena floor level and near loading dock areaa. Electrician maintenance shop 0 750 0 0 Eliminated on 11/29/11b. Plumber maintenance shop 0 750 0 0 Eliminated on 11/29/11c. Carpenter maintenance shop 0 750 0 0 Eliminated on 11/29/11d. General maintenance shop 1 500 500 46 Reduced on 11/29/11f. Special events technicians area 0 750 0 0 Eliminated on 11/29/11e. Maintenance supply rooms 1 250 250 23 Reduced on 11/29/11Maintenance Totals 750 70

Custodial Areas a. Custodial work area 1 150 150 14b. Custodial supply storage 0 500 0 0 Combined w/ Maint. Storec. distributed janitor closets 1 80 80 7d. Trash/Recycling Room(s) 0 200 0 0 Eliminated on 11/29/11 e. Laundry 1 500 500 46Custodial Areas Totals 730 68

Sub-‐Total 19,080 1,773design contingency multiplier (5%) 954 89Building Operations/Support Totals 20,034 1,861

Miscellaneous Event Storage

Category VI: Building Operations/Support


St Catharines Program Worksheet 4.5k seats 163k sqft 112911.xlsx11/29/11 Catagories VII, VIII and IX


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Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters CommentsTicket Sales Work

AreaTicket windows are to be directly accessible from patron parking areas and should include ticket windows, counters, cash drawers, space for ticket computer equipment, changeable letter sign panels, heating and air conditioning and general lighting and electrical outlets.a. Box Office 6 75 450 42 Reduced on 11/29/11Ticket Sales Work Area Totals 0 0

Ticket Sales Support Rooms a. Counting Room 1 240 240 22 Reduced on 11/29/11

b. Supply Room 0 150 0 0 Eliminated on 11/29/11c. Stock Room 0 150 0 0 Eliminated on 11/29/11d. Work/Copy/Mail Room 0 150 0 0 Eliminated on 11/29/11e. Vault Room 1 150 150 14 Reduced on 11/29/11f. Storage Room 1 150 150 14 Reduced on 11/29/11g. Toilet 1 80 80 7Ticket Sales Support Rooms Totals 620 58

Ticket Sales Administration a. Reception/Secretary area 150 0 0 Eliminated on 11/29/11

b. Ticket Manager's office 1 150 150 14 Reduced on 11/29/11c. Additional offices 125 0 0 Eliminated on 11/29/11Ticket Sales Administration Totals 150 14

Sub-‐Total 770 72design contingency multiplier (5%) 39 4Ticketing Administrative Facilities Totals 809 75

Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters CommentsHome Team

Offices a. Office 1 2 182 364 34 As per IceDogsb. Office 2 3 120 360 33 As per IceDogsc. Other Offices 1 76 76 7 As per IceDogsd. Board Room 1 273 273 25 As per IceDogse. Storage-‐ Office 1 70 70 7 As per IceDogsf. Storage -‐ Team 1 127 127 12 As per IceDogsg. Servery 1 128 128 12 As per IceDogsh. IT Room 1 75 75 7 As per IceDogsi. Reception 1 307 307 29 As per IceDogsj. Hallway / Common Area -‐ Requested by IceDogs 1 593 593 55 As per IceDogsk. Exercise Room 1 692 692 64 As per IceDogsl. Trainer's Office 1 102 102 9 As per IceDogsm. Trainer's Area 1 275 275 26 As per IceDogsn. Whirlpool Area 1 165 165 15 As per IceDogso. Player's Lounge -‐ Requested by IceDogs 1 400 400 37 As per IceDogsp. Shower Area 1 119 119 11 As per IceDogsq. Sauna Room 1 60 60 6 As per IceDogsr. Dressing Room 1 623 623 58 As per IceDogss. Lavatory 1 106 106 10 As per IceDogst. Washroom 1 145 145 13 As per IceDogsu. Street Clothes Locker 1 225 225 21 As per IceDogsv. Video Room 1 80 80 7 As per IceDogsw. Storage 1 75 75 7 As per IceDogsx. Coach Room & Showers 1 225 225 21 As per IceDogsy. Equipment Repair 1 140 140 13 As per IceDogsz. Stick Room 1 185 185 17 As per IceDogsaa. Hospitality Room -‐ Requested by IceDogs 1 2,800 2,800 260 As per IceDogsbb. Laundry Room 1 400 400 37 As per IceDogscc. Team Large Storage 1 1,104 1,104 103 As per IceDogsdd. General Common Areas -‐ Requested by IceDogs 1 1,706 1,706 158 As per IceDogsTeam Offices Totals 12,000 1,115

Area EstimatesSpace Type Space Description

Category VII: Ticketing Administrative Facilities


Category VIII: Team Facilities



All Rights Reserved

Home Team Requirements a. Home Team Locker Room 1,250 0 0 incl. Above as per IceDogs

b. Meeting Room 1,000 0 0 incl. Above as per IceDogsc. Lounge 500 0 0 incl. Above as per IceDogsd. Coaches Locker Room 500 0 0 incl. Above as per IceDogse. Training Area 1,500 0 0 incl. Above as per IceDogsf. Trainer's Office 200 0 0 incl. Above as per IceDogsg. Doctor's Office 200 0 0 incl. Above as per IceDogsh. Rehabilitation Room 1,000 0 0 incl. Above as per IceDogsHome Team Requirements Totals 0 0

Visiting Team Requirements a. Visiting Team Locker Room 1 1,250 1,250 116

b. (8) Showers + (2) w.c. + (3) urinals 1 750 750 70c. Coaches Locker Room 1 500 500 46d. Treatment Area 1 250 250 23e. Storage Room/Laundry 1 900 900 84Visiting Team Requirements Totals 3,650 339

Game Officials Requirements a. Officials Locker Room 2 150 300 28 Male / Female Each

b. 2 Showers + 1 w.c. + 1 urinal + 2 lavs 2 150 300 28 Male / Female EachGame Officials Requirements Totals 600 56

Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters CommentsAuxiliary Locker #1 Requirements a. Team Lockers Room 0 600 0 0 Removed 11/29/11

b. 6 Showers 2 w.c. + 2 urinals (M) or 4 w.c. (W) 0 350 0 0 Removed 11/29/11c. Coaches Locker Room 0 500 0 0 Removed 11/29/11d. Treatment Area 0 250 0 0 Removed 11/29/11e. Storage Room 0 400 0 0 Removed 11/29/11Auxiliary Locker #1 Requirements Totals 0 0

Auxiliary Locker #2 Requirements a. Team Lockers Room 1 450 450 42

b. 6 Showers 2 w.c. + 2 urinals (M) or 4 w.c. (W) 1 350 350 33c.. Coaches Locker Room 0 500 0 0 Removed 11/22/11d. treatment Area 0 125 0 0 Removed 11/29/11e. Storage Room 0 400 0 0 Removed 11/29/11Auxiliary Locker #2 Requirements Totals 800 74

Dressing Room / Auxiliary Locker #3 Requirements a. Team Lockers Room 1 450 450 42

Added to combine Star / Hockey Needs

b. 6 Showers 2 w.c. + 2 urinals (M) or 4 w.c. (W) 1 350 350 33c. Coaches Locker Room 0 500 0 0 Removed 11/29/11d. Treatment Area 0 125 0 0 Removed 11/29/11e. Storage Room 0 400 0 0 Removed 11/29/11Auxiliary Locker #3 Requirements Totals 800 74







Category VIII: Team Facilities


Divisible into 2 Tournament Locker Rooms



All Rights Reserved

Star Dressing Requirements a. Large Star Dressing Rooms 0 500 0 0

Incl in Aux Locker # 3 above 11/22/11

b. Small Star Dressing Rooms 0 350 0 0Incl in Aux Locker # 3 above 11/22/12

c. Green Room 1 600 600 56d. Family Toilet 1 80 80 7e. Catering Room 1 350 350 33Star Dressing Requirements Totals 1,030 96

Sub-‐Total 18,080 1,680design contingency multiplier (5%) 904 84

Team Facilities Totals 18,984 1,764

Units Sq. Ft./Unit Total Sq. Ft. Total Sq. Meters CommentsM/E/P a. Mechanical Rooms at Roof Level 1 3,500 3,500 325

b. Boiler Room 1 750 750 70 c. Chiller Room 1 1,200 1,200 111 d. Main Electrical Room 1 800 800 74 e. Emergency Generator Room 1 500 500 46 f. Electrical Closets 1 100 100 9 g. Main Tele/data Room 1 600 600 56 h. Fire Pump Room 1 400 400 37 i. Fire Sprinkler Shut-‐Off Room 1 200 200 19 k. Elevator Equipment Room(s) 1 150 150 14

Sub-‐Total 8,200 762 design contingency multiplier (5%) 410 38 Mechanical Totals 8,610 800

Category IX: Mechanical


Financial Advisory

City of St. Catharines

Spectator Facility Feasibility Study

Original Issue: April 30, 2010

Updated: April 25, 2011

© Deloitte & Touche LLP and affiliated entities. City of St. Catharines Spectator Facility Feasibility Study

Table of Contents

1. Introduction .................................................................................................................... 1

2. St. Catharines Market Overview ........................................................................................ 4

3. Ontario Hockey League ................................................................................................... 11

4. Market Support for an OHL Team and Spectator Facility in St. Catharines .............................. 21

5. Comparative and Competitive Facility Assessment .............................................................. 25

6. Assessment of Facility Locations ....................................................................................... 37

7. Financial Assessment ...................................................................................................... 45

8. Economic Benefits .......................................................................................................... 57

9. Risk Assessment ............................................................................................................. 64

10. Conclusions and Recommendations ................................................................................... 66

Appendix A – General Assumptions and Limiting Conditions ......................................................... 69

Appendix B – 20 Year Forecast ................................................................................................. 71

© Deloitte & Touche LLP and affiliated entities. City of St. Catharines Spectator Facility Feasibility Study 1

1. Introduction

Background / Purpose of the Report

The City of St. Catharines (the “City”) has commenced a process to investigate the opportunity to construct a new 5,000-seat Spectator Facility in its downtown core (the “Project” or the “Facility”). Currently, the Ontario Hockey League’s Niagara Ice Dogs (the “Ice Dogs” or the “Team”) play out of the 3,145-capacity Gatorade Garden City Complex, a venue which is physically too small, from a seating capacity perspective, and does not contain the range of revenue generating features which would enable the Team and building to operate profitably. Because of its configuration and amenities, this facility is also not generally considered to be a suitable venue for the range of mixed entertainment and event uses which are currently being programmed into other 5,000+-seat multi-use spectator facilities. As such, the City has identified the need for a new sports and entertainment facility (with a minimum seating capacity of 5,000 seats in order to meet OHL criteria and allow the venue to be eligible to host Memorial Cup championship games) to not only secure the long-term tenure of the Niagara Ice Dogs, but also to expand the range of entertainment, cultural and business events which could be brought into the City. In going forward to realize this facility, the City issued a Request for Expressions of Interest to prospective developers / builders and facility managers in April 2009. As a result of this process, four proponents were selected to receive a subsequent Request for Proposals document to prepare their bid for the design, build, financing, maintenance and operation of a St. Catharines Spectator Facility. However, the expected financial contributions of the various parties differed, necessitating that the City take a more pragmatic examination of the overall viability of the project. As a result, the City retained Deloitte to evaluate the feasibility of the Project such that a private developer and the City could develop, design, construct, finance, market, operate and maintain the Facility on a municipally-owned site within the downtown core of the City. Specific elements to be considered as part of this review included the following:

• Defining St. Catharines’ market area; • Analyzing current and projected market demographics; • Analyzing competitor facilities; • Identifying users and forecast usage levels; • Determining the potential financial impact on the City’s capital and operating budgets; • Outlining potential funding sources; • Estimating the economic impacts for the City; and • Evaluating, at a high level, project risks.

Updated Report - April 2011

The original draft report was issued in April 2010 to the City of St. Catharines for their review and consideration. In April 2011 the City of St. Catharines had requested that certain information be updated or that additional information be added to the report. These requests included:

• Documenting the preferred site selection • Providing additional commentary regarding the useful life of the asset • Providing full 20 year forecasts for the operations of the spectator facility • Other minor grammatical or format changes.

Deloitte and the City of St. Catharines had decided in order to maintain transparency related to the changes to the draft report to update the report in a manner that the material changes are clearly identified in the body of the report. Deloitte has provided two issue dates for this report to reflect the updated nature of the report.


Scope of Review

The scope of our review included the following tasks:

• Held a preliminary meeting with City of St. Catharines staff to acquire background information, as well as other information describing the Gatorade Garden City Complex / Jack Gatecliff Arena, the City of St. Catharines, and potential locations for the new Facility;

• Held a preliminary meeting with representatives of the Niagara Ice Dogs to obtain background information on the team and aspects of its operations;

• Researched and obtained information on the operations of various OHL hockey clubs; • Researched and obtained socio-economic data profiling the greater St. Catharines region, and

socio-economic data profiling other centres with teams in the Ontario Hockey League; • Completed a market assessment of the St. Catharines area; • Reviewed the local and broader regional population base; • Evaluated the operations of comparable and competitive facilities; • Assessed potential locations for the Facility; • Developed a five-year proforma budget for the Facility; • Estimated the Facility’s total capital costs; • Quantified the Facility’s economic impact; and • Prepared a preliminary risk assessment.

Report Structure

Including this introductory section, the Report is divided into ten sections:

• a description of the St. Catharines market; • a description of the Ontario Hockey League, including teams, buildings and attendance figures,

etc.; • an assessment of the market potential for St. Catharines; • an assessment of comparable and competitive facilities; • an assessment of potential locations; • a financial assessment; • a high level assessment of the economic benefits associated with a spectator facility; • a high level risk assessment; and • our overall conclusions, opinions and recommendations

Restrictions and Limitations

The intended use of this Report is as a high level examination of the St. Catharines market and its ability to support a new 5,000-seat Spectator Facility. In completing aspects of this Study, Deloitte relied upon certain information provided in confidence which cannot be wholly disclosed. The reader should note that the Study utilizes various assumptions (some of which are included in Appendix A) which are based on a set of economic conditions and / or possible courses of action that are reasonable and appropriate in Deloitte’s judgment, are consistent with the purpose of this assignment, but which may not materialize as set out therein. These hypotheses represent plausible circumstances, but need not be, and may not be fully supported. Since future events are not subject to precise projections, some assumptions will not materialize in the exact form presented by our analysis. In addition, other unanticipated events and circumstances will occur that will influence the future outcome and performance of a new 5,000-seat Spectator Facility in St. Catharines. Therefore, actual results achieved in future operating periods will vary from the analysis of prospective market and financial conditions set out therein. While there is no recourse to predicting these matters with certainty apart from informed and reasoned judgments, it must be stated that future events will lead to variations in a team’s and building’s operational performance which could materially alter results. Deloitte does not warrant that actual results achieved will be the same, in whole or in part, as those shown in the Projection. The Projection is based on hypotheses and there is a significant risk that actual results will vary from the results projected.


This Report has been prepared at the request of the City of St. Catharines, for advice and use in evaluating the local / broader regional market support for an approximate 5,000-seat Spectator Facility. This Report has been commissioned to provide the City with the basis for determining an appropriate go forward strategy; our Report is not intended to be used for any other purpose. We do not assume any responsibility or liability for losses incurred by the City of St. Catharines, its employees or by any other parties as a result of the circulation, publication, reproduction or use of this Report contrary to the provisions of the preceding paragraph. We reserve the right to review all calculations included or referred to in our Report and if we consider it necessary, to revise our Report in the light of any information which becomes known to us after the date of this Report.


2. St. Catharines Market Overview

Introduction

With an approximate area of 96.1 square kilometres and a population of 131,989 persons, St. Catharines is the largest city in Niagara Region; Niagara Region comprises the sixth largest urban area in Ontario. St. Catharines is situated approximately 51 kilometres south of Toronto and 19 kilometres from the U.S. border. Figure 1 St. Catharines – Area Maps

Demographics / Economic Conditions

Population

In 2006, the population of St. Catharines was estimated at approximately 131,989 persons; the population of the St. Catharines – Niagara Census Metropolitan Area (“CMA”) was estimated at 390,317. The City’s population grew by some 2.2% between 2001 and 2006, while it grew by some 3.5% within the CMA. Figure 2 Population by Area

Source: Statistics Canada 2006 Community Profiles

St. Catharines has a relatively older population; its median age is 41.7, and approximately 45% of the St. Catharines population is over the age of 45, while 24% is over the age of 60. These figures (shown in Figure 3, following) are somewhat higher compared to Ontario averages, where 40% are over the age of 45 and 18% are over the age of 60. There are 54,725 private households in St. Catharines, and of these, 13,885 households contain couples with children (25%), 15,685 households contain a couple without children (29%) and 16,255 are one-person households (30%). The average household size is 2.4 (see Figure 4, following).

Employment and Income

Currently (i.e., March 2010), unemployment in St. Catharines is 11.3%, up approximately 1.0% from December 2009 estimates. In 2006 (see Figure 5, following), the area’s labour force was comprised of an estimated 68,925 individuals (63% of the total population 15 years and over).

Population % Change Population % Change Population % Change

2001 129,170 - 377,009 - 11,410,046 -

2006 131,989 2.2% 390,317 3.5% 12,160,282 6.6%

YEARCity of St. Catharines St. Catharines-Niagara CMA Ontario


Figure 3 Age Profile – St. Catharines


Figure 4 Household Characteristics


Figure 5 Labour Force Activity


Population % Population % Population %

Total population 131,990 100.0% 390,315 100.0% 12,160,285 100.0%

0 to 4 years 6,315 4.8% 18,625 4.8% 670,770 5.5%

5 to 9 years 6,955 5.3% 21,105 5.4% 721,590 5.9%

10 to 14 years 8,115 6.1% 24,915 6.4% 818,445 6.7%

15 to 19 years 8,550 6.5% 26,340 6.7% 833,115 6.9%

20 to 24 years 9,295 7.0% 24,435 6.3% 797,255 6.6%

25 to 29 years 7,705 5.8% 20,650 5.3% 743,695 6.1%

30 to 34 years 7,490 5.7% 21,560 5.5% 791,955 6.5%

35 to 39 years 8,255 6.3% 24,950 6.4% 883,990 7.3%

40 to 44 years 10,140 7.7% 30,710 7.9% 1,032,415 8.5%

45 to 49 years 9,865 7.5% 30,665 7.9% 991,970 8.2%

50 to 54 years 9,345 7.1% 28,675 7.3% 869,400 7.1%

55 to 59 years 8,870 6.7% 26,710 6.8% 774,530 6.4%

60 to 64 years 7,265 5.5% 21,810 5.6% 581,985 4.8%

65 to 69 years 6,045 4.6% 17,985 4.6% 466,240 3.8%

70 to 74 years 5,470 4.1% 16,245 4.2% 401,950 3.3%

75 to 79 years 5,065 3.8% 14,880 3.8% 338,910 2.8%

80 to 84 years 4,225 3.2% 11,600 3.0% 250,270 2.1%

85 years and over 3,025 2.3% 8,460 2.2% 191,810 1.6%

Median age of the population

% of the population aged 15+

YEARCity of St. Catharines St. Catharines-Niagara CMA Ontario

41.7

83.8

42.1

83.4

39.0

81.8

# of Households % # of Households % # of Households %

Total private households 54,725 100% 156,465 100.0% 4,555,025 100.0%

Households containing a couple

with children13,885 25.4% 42,255 27.0% 1,420,515 31.2%

Households containing a couple

without children15,685 28.7% 48,575 31.0% 1,288,140 28.3%

One-person households 16,255 29.7% 41,840 26.7% 1,104,865 24.3%

Other household types 8,900 16.3% 23,795 15.2% 741,505 16.3%

Average household size 2.4 2.4 2.6

Selected household

characteristics

City of St. Catharines St. Catharines-Niagara CMA Ontario

City of St.

Catharines

St. Catharines-

Niagara CMAOntario

Total population 15 years and over 108,585 320,410 9,819,420

In the labour force 68,925 205,140 6,587,580

Employed 64,410 192,400 6,164,245

Unemployed 4,515 12,740 423,335

Not in the labour force 39,660 115,270 3,231,840

Participation rate 63.5 64.0 67.1

Employment rate 59.3 60.0 62.8

Unemployment rate 6.6 6.2 6.4


With 54,725 private households, the median household income in the City of St. Catharines was $50,497 in 2005; in the St. Catharines – Niagara CMA, median household income was $53,057. These figures are approximately 12% to 17 % lower compared to median household incomes in Ontario. Figure 6 Household Income


Major Industries, Employers, and Occupations

There are 67,785 people over the age of 15 in the experienced St. Catharines labour force. The St. Catharines economy is generally focused in the following industries: business services (17%), manufacturing (14%), and retail trade (13%). Other services comprise 22% of the industries found in St. Catharines. Figure 7 Major Industries


Major occupations in St. Catharines include positions in sales and service, business and administration, and trades, transport and equipment operation (Figure 8, following). Major employers in St. Catharines are generally focused in the areas of service, healthcare and education, and include the District School Board of Niagara, Niagara Health System, General Motors, Seaway Marine Transport Inc. and Brock University (Figure 9, following).

St. CatharinesSt. Catharines

Niagara (CMA)Ontario

Median income in 2005 - All private households ($) 50,497 53,057 60,455

Median income in 2005 - Couple households with children ($) 82,585 82,874 87,960

Median income in 2005 - Couple households without children ($) 60,597 61,525 68,764

Median income in 2005 - One-person households ($) 26,915 26,433 30,025

Median income in 2005 - Other household types ($) 41,858 43,763 51,560

Median after-tax income in 2005 - All private households ($) 44,443 46,460 52,117

Median after-tax income in 2005 - Couple households with children ($) 70,208 70,432 74,095

Median after-tax income in 2005 - Couple households without children ($) 52,623 53,309 58,755

Median after-tax income in 2005 - One-person households ($) 24,200 23,804 26,473

Median after-tax income in 2005 - Other household types ($) 38,555 40,169 46,194

Median monthly payments for rented dwellings ($) 727 708 801

Median monthly payments for owner-occupied dwellings ($) 833 833 1,046

# of Workers % # of Workers % # of Workers %

Total experienced labour force 15 years and over 67,785 100.0% 202,140 100.0% 6,473,730 100.0%

Agriculture and other resource-based industries 1,935 2.9% 7,100 3.5% 190,000 2.9%

Construction 4,070 6.0% 12,485 6.2% 384,775 5.9%

Manufacturing 9,265 13.7% 25,885 12.8% 899,670 13.9%

Wholesale trade 2,560 3.8% 7,270 3.6% 307,465 4.7%

Retail trade 8,575 12.7% 23,515 11.6% 720,235 11.1%

Finance and real estate 3,195 4.7% 9,120 4.5% 442,610 6.8%

Health care and social services 6,855 10.1% 19,480 9.6% 611,740 9.4%

Educational services 5,010 7.4% 12,625 6.2% 433,485 6.7%

Business services 11,620 17.1% 32,355 16.0% 1,274,345 19.7%

Other services 14,695 21.7% 51,310 25.4% 1,209,390 18.7%



Figure 8 Major Occupations


Figure 9 Major Employers

Source: City of St. Catharines

Education

With a population of 108,585 persons aged 15 years and over (320,405 in the CMA), 77% of the City’s population has a certificate, diploma or degree. This compares slightly lower to the Ontario average. Approximately 19% have a college, CEGEP or other non-university certificate / diploma; 15% have a university certificate, diploma or degree; and 3% have some other university level education. Figure 10 Education Statistics



Total experienced labour force 15 years and over 67,785 100.0% 202,140 100.0% 6,473,735 100.0%

A Management occupations 5,725 8.4% 17,925 8.9% 666,485 10.3%

B Business, finance and administration occupations 11,045 16.3% 32,060 15.9% 1,204,490 18.6%

C Natural and applied sciences and related

occupations

3,255 4.8% 8,330 4.1% 451,930 7.0%

D Health occupations 4,080 6.0% 11,500 5.7% 340,690 5.3%

E Occupations in social science, education,

government service and religion5,785 8.5% 14,550 7.2% 546,385 8.4%

F Occupations in art, culture, recreation and sport 1,830 2.7% 4,965 2.5% 200,980 3.1%

G Sales and service occupations 19,855 29.3% 61,155 30.3% 1,522,820 23.5%

H Trades, transport and equipment operators and

related occupations9,755 14.4% 31,660 15.7% 911,250 14.1%

I Occupations unique to primary industry 1,965 2.9% 7,420 3.7% 165,085 2.6%

J Occupations unique to processing, manufacturing

and utilities4,485 6.6% 12,575 6.2% 463,610 7.2%


Employer Sector Employees

District School Board of Niagara Public School Board 4,735

Niagara Health System Hospital 4,200

General Motors of Canada Limited Manufacturing 2,000

Seaway Marine Transport Inc. Service 1,800

Brock University University 1,785

Algoma Central Corporation Service 1,300

SITEL Service 1,000

Transcom WorldWide Service 500

TRW Canada Ltd. Manufacturing 425


Total population 15 years and over 108,585 100.0% 320,405 100.0% 9,819,420 100.0%

No certificate, diploma or degree 24,990 23.0% 77,250 24.1% 2,183,625 22.2%

High school certificate or equivalent 32,210 29.7% 95,890 29.9% 2,628,575 26.7%

Apprenticeship or trades certificate or

diploma10,430 9.6% 32,420 10.1% 785,115 8.0%

College, CEGEP or other non-university

certificate or diploma20,970 19.3% 64,820 20.2% 1,804,775 18.4%

University certificate or diploma below the

bachelor level3,230 3.0% 8,980 2.8% 405,270 4.1%

University certificate, diploma or degree 16,750 15.4% 42,045 13.1% 2,012,060 20.5%



With respect to post secondary institutions, St. Catharines is home to Brock University as well as the Niagara College of Applied Arts and Technology. Brock University has over 50,000 alumni around the world, and its graduates experience one of the highest employment rates of all Ontario universities at over 97%. The University’s annual economic impact on the Niagara region is estimated at $265 million.

Housing Market

Occupied Dwellings

In 2006, 57.8% of housing in St. Catharines consisted of single-detached houses, while 13.4% were smaller storey apartment buildings. The remaining structures include a combination of row houses, detached duplex apartments, higher storey apartments, semi-detached houses, and movable dwellings. Statistics Canada notes the average price of a dwelling in St. Catharines in 2006 was $208,031, considerably lower than the Ontario average of $297,479. Figure 11 Occupied Private Dwellings by Structure Type


Construction and Sales Activity

A gradual recovery of the economy and improvement in labour market conditions is expected to contribute to an estimated 14.5% pick-up in housing starts in the St. Catharines-Niagara CMA area in 2010. Housing starts are expected to increase from 830 units in 2009 to 950 units as empty-nester demand, low inventories and low mortgage rates boost new construction in 2010. New listings for 2010 are estimated at 12,100, while resales were estimated at 5,350, with an average resale price of $215,000 (see Figures 12 and 13, following).

Development Activity

Overall, development activity in the St. Catharines area has fluctuated over the last several years, in all of areas of residential, commercial, industrial and institutional property. In 2008, the City of St. Catharines issued $103.2 million in permits, up significantly from 2007 activity of $93.4 million.

City of St.

Catharines

St. Catharines-

Niagara CMAOntario

Total private dwellings occupied by usual residents 54,725 156,465 4,555,025

Single-detached houses - as a % of total occupied private dwellings 57.8 67.2 56.1

Semi-detached houses - as a % of total occupied private dwellings 5.8 5.4 5.7

Row houses - as a % of total occupied private dwellings 7.5 5.4 7.9

Apartments, duplex - as a % of total occupied private dwellings 4.1 3.7 3.4

Apartments in buildings with fewer than five storeys - as a % of total

occupied private dwellings13.4 11.4 10.8

Apartments in buildings with five or more storeys - as a % of total

occupied private dwellings10.7 6.2 15.6

Other dwellings - as a % of total occupied private dwellings 0.8 0.7 0.5

Number of owned dwellings 37,800 116,730 3,235,495

Number of rented dwellings 16,925 39,735 1,312,290

Number of dwellings constructed before 1986 44,770 121,115 3,124,010

Number of dwellings constructed between 1986 and 2006 9,955 35,350 1,431,020

Dwellings requiring major repair - as a % of total occupied private

dwellings6.3 6.7 6.6

Average number of rooms per dwelling 6.4 6.7 6.6

Dwellings with more than one person per room - as a % of total

occupied private dwellings1 0.6 1.9

Average value of owned dwelling ($) 208,031 212,767 297,479


Figure 12 St. Catharines - Niagara Average Sales Prices – Single-Detached Homes

Source: Canadian Mortgage and Housing Corporation

Figure 13 St. Catharines – Niagara Forecast Summary

Source: Canadian Mortgage and Housing Corporation – Housing Market Outlook

Economic Development Strategy

The Niagara Economic Growth Strategy 2009-2012 focuses on new directions for Niagara’s industrial base and emerging industries, while also identifying the importance of Niagara’s small and medium-sized enterprises as a critical component of Niagara’s future economy. This strategy emphasizes the importance of leveraging the unique expertise, resources and partnership potential with Niagara’s educational infrastructure and specialized research institutions, including Brock University and Niagara College. The six strategic directions of the plan include building a strong collective voice; creating a competitive business environment; targeting strategic employers; improving transportation and related infrastructure; marketing the Niagara brand; and developing Niagara’s talent pool. According to the Conference Board of Canada, improvements in construction as well as wholesale and retail trade are expected to boost the area's economic performance in 2010 by some 2.4%. Previously, the region experienced three consecutive years of declining GDP growth (in 2009, it is estimated that GDP declined by some 3.4%). Going forward, the Conference Board is projecting average annual GDP growth of 3.1% from 2011 to 2014.

$290,000

$300,000

$310,000

$320,000

$330,000

$340,000

$350,000

$360,000

$370,000

$380,000

$390,000

2006 2007 2008 2009 2010

2006 2007 2008 2009 % change 2010* % change

Resale Market

MLS Sales 6,410 6,668 5,896 5,500 -6.7 5,350 -2.7

MLS New Listings 11,661 11,710 12,428 12,000 -3.4 12,100 0.8

MLS Average Price ($) $194,671 $202,314 $203,648 $210,000 3.1 $215,000 2.4

New Home Market

Starts

Single-Detached 873 798 680 525 -22.8 520 -1.0

Multiples 421 351 458 305 -33.4 430 41.0

Semi-Detached 102 60 56 40 -28.6 50 25.0

Row / Townhouse 184 207 288 200 -30.6 300 50.0

Apartments 135 84 114 65 -43.0 80 23.1

Starts - Total 1,294 1,149 1,138 830 -27.1 950 14.5

Average Price ($)

Single-Detached $323,359 $342,933 $375,998 $379,000 0.8 $385,000 1.6


Summary

The City of St. Catharines, with a local population of more than 130,000 people and a regional trading area exceeding 400,000 people, is the largest community and is a regionally-dominant centre in Niagara Region. While traditional manufacturing have played an integral role in St. Catharines development, health and bioscience, green industry, interactive media and tourism have been identified as being key to driving future economic growth in the St. Catharines area. After experiencing three consecutive years of economic decline, it is projected that the regional economy will grow by 2.4% in 2010 and by an average annual rate of 3.1% between 2011 and 2014.


3. Ontario Hockey League

Background

The Ontario Hockey League (“OHL”) is one of three leagues playing Major Junior A (Tier I) hockey in Canada; the other two leagues are the Western Hockey League (“WHL”) and the Quebec Major Junior Hockey League (“QMJHL”). Together these three leagues comprise the Canadian Hockey League. The OHL was formed in 1974 (previously it was the Major Junior A Tier I division of the Ontario Hockey Association). There are currently 20 teams playing in the OHL; 17 teams are based in Ontario, while two teams (Plymouth and Saginaw) are based in Michigan and one team (Erie) is based in Pennsylvania. Of the 17 Ontario-based teams, 15 are based in Southern Ontario, while two (Sudbury and Sault Ste. Marie) are based in Northern Ontario. Figure 14 Location of Ontario Hockey League Franchises

About the Ontario Hockey League

Junior hockey in Ontario began in approximately 1896, and was organized by the Ontario Hockey Association (“OHA”). Since its establishment, junior hockey (age 16 through 20) has gone through four distinct eras:

• In 1933, the junior division was divided into two levels, Junior A and Junior B; • In 1972 the upper level (i.e., Junior A) was divided into two additional levels, Tier I and Tier II; • In 1974 the “Major Junior A Tier I” portion of the OHA separated from the OHA and became the

Ontario Major Junior Hockey League (“OMJHL”); and finally, • In 1980, the OMJHL became the Ontario Hockey League.

The OHL is one of three Major Junior hockey leagues operating in Canada, the other two being the Western Hockey League (comprising 17 teams from Manitoba, Saskatchewan, Alberta, and British Columbia, plus five teams from states of Washington and Oregon), and the Quebec Major Junior Hockey League (comprising 17 teams from Quebec, New Brunswick, Prince Edward Island and Nova Scotia, plus one team from the state of Maine). Together, these three leagues produce the highest proportion of players drafted into the National Hockey League, with the OHL having produced an increasingly higher percentage of players in recent years. Since 2000, the OHL has increased its proportion of players drafted into the NHL from 13.3% of total draftees, to 21.4% in 2009. This compares to the WHL which has stayed relatively constant at between 14% and 17% and the QMJHL which has varied between 7% and 13%.


Together, the CHL produces, on average 40% to 45% of all players drafted into the NHL, with this proportion hovering near 50% in recent years. In contrast, the proportion of U.S. college players has declined as have the proportion of players being drafted from Europe and other international leagues. Figure 15 Source of NHL Draftees, 2001 – 2008

“Other” includes Canadian and American Junior “A” and Junior “B” programs, minor pro leagues (AHL, IHL) and other leagues not listed.

Source: Toronto Star

Attendance

Figure 16, following, details average season attendance for each OHL team since the 2000-01 season. Over this period, average attendance at all games increased by some 800 fans per game, or by some 25% on average, and indicates increased fan popularity throughout the league. Figure 16 OHL Attendance, 2000-01 through 2009-10 Season

Highlighted attendances indicate average season attendance in a new arena / multi-purpose spectator and event facility

Source: “League Attendance” web site

A significant reason for the large jumps in average attendance can be traced to the opening of new, larger arenas / multi-purpose spectator arenas in a number of these markets. For example, average attendance increased dramatically in during 2002-03 season due mainly to the London Knights moving into the John Labatt Centre part-way through the 2002-03 season and the North Bay Centennials moving to Saginaw Michigan for the start of that season (where the franchise went from attracting 2,400 fans per game in North Bay to more than 4,000 per game in Saginaw).

YearTotal Picks

in DraftOHL QMJHL WHL CHL TOTAL NCAA High School International Other

2000 293 13.3% 7.2% 14.0% 34.5% 11.9% 2.4% 42.0% 9.2%

2001 289 14.2% 9.0% 15.6% 38.8% 8.3% 2.8% 41.2% 9.0%

2002 290 12.1% 7.9% 14.8% 34.8% 14.1% 2.1% 37.9% 11.0%

2003 292 15.1% 13.0% 14.0% 42.1% 7.9% 3.4% 31.8% 14.7%

2004 291 14.4% 9.3% 15.1% 38.8% 9.6% 6.2% 30.2% 15.1%

2005 230 18.7% 10.0% 18.7% 47.4% 5.6% 7.8% 21.7% 17.4%

2006 213 13.6% 11.7% 11.2% 36.5% 8.4% 8.9% 29.5% 16.4%

2007 211 16.6% 11.8% 17.5% 45.9% 3.8% 6.6% 17.0% 26.5%

2008 211 21.8% 12.8% 17.5% 52.1% 4.2% 7.1% 18.5% 18.0%

2009 210 21.4% 11.0% 14.8% 47.2% 3.3% 9.0% 19.5% 21.0%

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Barrie 3,724.0 3,711.8 3,842.0 3,728.4 3,889.6 3,816.1 3,846.0 3,537.0 3,486.4 3,731.8

Belleville 3,065.8 3,158.1 3,108.0 2,785.4 2,879.3 2,605.6 2,788.5 2,773.4 2,970.3 2,745.7Brampton 2,381.4 2,316.8 2,301.2 2,173.5 2,628.4 2,734.2 2,579.4 2,509.5 2,404.6 2,090.3

Erie 3,515.1 3,912.1 4,268.8 4,266.2 4,428.3 4,080.5 3,591.8 3,526.6 3,526.4 3,591.8Guelph 3,229.4 3,348.7 3,371.3 3,665.1 4,066.6 4,046.3 4,205.2 4,154.2 4,071.0 3,989.3

Kingston 2,392.4 2,177.0 1,913.5 1,978.5 2,095.1 2,198.0 2,247.0 2,551.0 3,093.4 2,881.2

Kitchener 4,880.1 5,260.8 5,590.7 5,904.9 5,911.3 5,951.3 5,887.0 6,038.2 6,245.9 6,263.9London 3,648.4 3,905.4 7,604.2 8,362.0 9,038.1 9,090.6 9,034.0 9,012.9 9,006.5 9,015.4

Mississauga 2,615.7 2,532.5 2,641.0 2,903.9 3,739.3 2,995.7 2,225.4 2,138.3 2,393.0 2,247.8

Niagara -- -- -- -- -- -- -- 2,772.9 2,961.9 2,914.0

North Bay 2,383.7 2,314.2 -- -- -- -- -- -- -- --Oshawa 2,375.0 2,832.5 3,282.4 3,219.3 2,872.2 3,013.9 4,459.6 5,133.6 4,794.0 4,163.6

Ottawa 7,798.9 9,142.7 9,022.6 8,647.3 9,236.5 8,207.3 8,062.5 8,103.3 7,865.5 7,499.4Owen Sound 2,384.8 2,553.6 2,526.7 2,578.1 2,771.9 2,725.8 2,867.7 2,474.9 2,417.8 2,374.6Peterborough 2,560.9 2,575.5 2,821.7 2,828.1 3,116.2 3,430.4 3,305.9 3,101.0 2,963.4 2,788.4Plymouth 2,711.1 3,145.0 3,178.0 3,012.7 3,226.0 2,657.6 2,702.4 2,641.5 2,342.9 2,685.0Saginaw -- -- 4,025.7 4,263.2 4,191.0 4,337.2 4,266.7 3,932.6 3,731.6 3,594.4Sarnia 4,271.4 4,269.0 4,105.2 4,017.4 3,546.2 3,495.9 3,383.1 3,715.0 3,490.5 3,246.0

Sault Ste. Marie 2,880.5 3,090.3 2,854.4 2,828.7 3,150.2 3,483.4 4,503.8 4,622.7 4,434.4 4,423.8

Sudbury 4,057.5 3,851.0 3,465.1 3,397.6 4,261.4 4,601.6 4,483.8 4,162.1 4,198.2 3,822.8Toronto 1,421.0 1,170.5 1,063.7 1,004.4 1,356.9 1,009.1 1,164.2 -- -- --Windsor 3,081.2 3,091.8 3,196.3 3,189.4 2,718.3 2,696.4 3,064.1 3,343.7 5,063.4 6,278.3

OHL Average 3,273.1 3,415.3 3,709.1 3,737.7 3,956.2 3,858.8 3,932.7 4,012.2 4,073.1 4,017.4


Additional year-over-year increases in average attendance can similarly be traced to the opening of new and larger venues and greater on-ice success of teams playing within those buildings. Three franchises generally lead the league in average attendance. In each instance, London (averaging more than 9,000 fans per game since 2004-05), Ottawa (averaging approximately 8,500 fans per game) and Kitchener (averaging close to 6,000 fans per game) play out of the league’s largest facilities and play to capacity audiences of approximately 96%, 86% and 83% respectively. Excluding these three teams, approximately half of the remaining 17 franchises attract between 3,500 and 5,000 fans per game, led by Oshawa (average attendance of 4,800 fans per game in their new building), Sault Ste. Marie (average attendance of 4,500 fans per game in their new building), Saginaw (4,100 fans per game), Sudbury (4,050), Erie (3,900), Guelph (3,800), Sarnia (3,800), and Barrie (3,700). In addition, Windsor attracted 5,000 fans per game during the 2008-09 season, their first in the new WFCU Centre (up from 3,300 in their former aged facility); average per game attendance increased during the 2009-10 season to almost 6,300 fans per game. The remaining teams generally attract less than 3,000 fans per game.

Building Boom

Starting with the construction of the Barrie Molson Centre in 1996, the OHL has witnessed a boom in the construction of new, state-of-the-art multi-purpose spectator arenas. Since the 4,200-seat Barrie Molson Centre opened in 1996, nine Ontario-based teams have moved into new facilities including:

• Sarnia – 5,000-seat Sarnia Sports and Entertainment Centre (opened in 1998); • Brampton – 5,000-seat Powerade Centre (opened in 1998); • Mississauga – 5,400-seat Hershey Centre (opened in 1998); • Guelph – 5,100-seat Sleeman Centre (opened in 2000); • London – 9,100-seat John Labatt Centre (opened in 2002); • Sault Ste. Marie – 5,000-seat Essar Centre (opened in 2005); • Oshawa – 5,400-seat General Motors Centre (opened in 2006); • Kingston – 5,200-seat K-Rock Centre (opened in 2008); and • Windsor – 6,500-seat WFCU Centre (opened in 2008).

In addition, significant renovations / modernizations have been undertaken in Peterborough, Kitchener and Owen Sound. As we understand it, new facilities are under consideration in Ottawa (as part of an overall redevelopment of Lansdowne Park) and Belleville. In each instance, these new facilities contain many of the same amenities which have been included within much larger NHL buildings, including luxury suites, club seat areas, restaurants, retail outlets, enhanced food and beverage / concession areas, larger concourses, wider seating, better advertising positions and opportunities, etc. The main impact of these enhancements has been to (a) enhance the in-game experience of fans and thereby increase average attendance, (b) provide greater revenue generating opportunities to both the OHL club and the arena, and (c) broaden the range of other events (concerts, family shows, other sporting events, etc.) which can be booked into arena. Pictures of the interiors of some of these newer buildings are included in Figures 17-22, following.

Arena Financing

Figure 23, following, summarizes the delivery approach and method of financing used to realize the ten new OHL facilities constructed in Ontario since 1996. In constructing these sports and entertainment facilities, most projects were financed almost exclusively by the local municipality; in a small number of cases, the new spectator arena was able to attract an equity contribution and / or support some level of debt. Additional observations include the following:

• The 9,100-seat John Labatt Centre attracted the highest private equity investment ($2.5 million); • The only other facilities to attract private equity were Guelph ($1.5 million), Sarnia ($1.5 million)

and Brampton ($2.0 million); • Where the facility was able to support bank debt, in almost all instances, this financing was

guaranteed by the City; and • In recent years (i.e., since 2002), 100% of the construction, operating and financing risk has been

taken on by the local municipality.


Figure 17 Interior of the Essar Centre, Sault Ste. Marie Ontario

Source: Kevin Jordan / OHL Arena Guide.com

Figure 18 Interior of the K-Rock Centre, Kingston Ontario

Source: wikipedia.org


Figure 19 Interior of the General Motors Centre, Oshawa Ontario


Figure 20 Interior of the WFCU Centre, Windsor Ontario

Source: flickr.com


Figure 21 Interior of the John Labatt Centre, London Ontario


Figure 22 Interior of the Sleeman Centre, Guelph Ontario



Figure 23 New OHL Sports and Entertainment Facilities – Project Financing Summary & Delivery Approach

Source: Deloitte

Team Movement

Over the recent past, a number of teams have changed ownership or relocated. For example,

• The Toronto St. Michael’s Majors moved from St. Michael’s College arena in downtown Toronto to play out of the Hershey Centre in Mississauga, after their owner purchased the then Mississauga Ice Dogs. The team is now known as the Mississauga St. Michael’s Majors.

• The former Mississauga Ice Dogs were eventually sold and relocated to the City of St. Catharines for the start of the 2007-08 season. Prior to the team relocating to St. Catharines, a prospective purchaser of the Ice Dogs was in discussion with the City of Niagara Falls about moving the team to that city (those discussions ultimately fell through and the team was sold to another party who relocated the team to St. Catharines).

Barrie Sarnia Brampton Mississauga Guelph

Date Opened 1996 1998 1998 1998 2000

Size of main arena (seats) 4,200 5,000 5,000 5,400 5,100

Number of ice surfaces 1 2 4 2 1

Number of on-site parking spaces 1,350 Expansion of existing parking

area1,500 on-site surface parking Abutting 500 spaces (+/-)

Location greenfield greenfield greenfield greenfield downtown

Project delivery Design-Build PPP PPP Design-Build PPP

Private developer / operator $0 $1.5 million $2.0 million $0 $1.5 million

City / Government n/a $7.0 million $7.0 million $22.0 million $10.5 million

Project debt (guaranteed by city) $0 $10.0 million $15.5 million $0 $9.0 million

Total Project Cost n/a $18.5 million $24.5 million $22.0 million $21.5 million

Up-front contribution 100% of capital cost

$7.0 million as project grant

plus $10.0 million in Project

Financing

$7.0 million $22 million $10.5 million

On-going subsidy100% of operating losses,

should such occurnone

agree to cover first $500,000

of operating loss and 50% of

amount over $750,000

100% of operating losses,

should such occurnone

Exempt from property tax yes yes yes yes yes

Construction Risk City Builder Proponent City Proponent

Operating Risk City Operator City City Proponent

Financing Risk City City City City City

London Sault Ste. Marie Oshawa Kingston Windsor

Date Opened 2002 2005 2006 2008 2008

Size of main arena (seats) 9,100 5,000 5,400 5,200 6,500

Number of ice surfaces 1 1 1 1 4

Number of on-site parking spaces n/a n/a n/a n/a 1,800

Location downtown d d d brownfield

Project delivery PPP Design-Build Design-Build Design-Build Design-Build

Private developer / operator $2.5 million $0 $0 $0 $0

City / Government $37.5 million $25.0 million $45.0 million $46.5 million $71.7 million

Project debt (guaranteed by city) $7.0 million $0 $0 $0 $0

Total Project Cost $47.0 million $25.0 million $45.0 million $46.5 million $71.7 million

Up-front contribution

$37.5 million (including $5.0

million in SuperBuild

funding)

$25.0 million $45.0 million $46.5 million $71.7 million

On-going subsidy none100% of operating losses,

should such occur


should such occur


should such occur


should such occur

Exempt from property tax yes yes yes yes yes

Construction Risk Proponent City City City City

Operating Risk Proponent City City City City

Financing Risk City City City City City

Project Financing

Total Public Contribution

Project Risks

Facility Description

Project Financing

Total Public Contribution

Project Risks

Facility Description


• The former North Bay Centennials were sold and the team was relocated to Saginaw Michigan for the start of the 2002-03 season.

• In 1999 the Owen Sound Platers (now the Owen Sound Attack) were sold to investors who intended to move the team to Cornwall, Ontario. Ultimately, the City of Owen Sound exercised an option in their lease to purchase the team to keep the franchise in Owen Sound; the City then sold the team to local investors. Previously, the team was known as the Guelph Platers, having moved from Guelph to Owen Sound for the start of the 1989-90 season.

• The Erie Otters were relocated from Niagara Falls in time for the start of the 1996-97 season. The roots of this franchise can be traced back to the Hamilton Tiger Cubs (1953-60), the Hamilton Red Wings (1960-74), Hamilton Fincups (1974-76 and 1977-78), St. Catharines Fincups (1976-77), Brantford Alexanders (1978-84), Hamilton Steelhawks (1984-88) and Niagara Falls Thunder (1988-96).

• The Sarnia Sting were established in 1994, with the team being relocated to Sarnia from Newmarket. The team was originally the Cornwall Royals, a team that once played in the QMJHL before transferring to the OHL in 1981 and moving to Newmarket in 1992.

Other franchise sales / relocations / expansions which we understand have occurred include the following:

• In 1989, an offer was made to purchase the Sault Ste. Marie Greyhounds and move this team to Detroit Michigan. Ultimately, this offer was rejected;

• In 1989, an expansion franchise was awarded to a Detroit-based investor. This team was originally known as the Detroit Junior Red Wings and the Detroit Whalers, and is now the Plymouth Whalers;

• In 1994, an expansion franchise was awarded to establish the Barrie Colts;

• In 1996, an expansion franchise was awarded to re-establish the Toronto St. Michael’s Majors;

• In 1996, an expansion franchise was awarded to establish the Brampton Battalion;

• In 1997, an expansion franchise was awarded to establish the Mississauga Ice Dogs;

• In 2000, the London Knights were sold to local interests;

• In 2001, the Toronto St. Michael Major’s were sold to local interests;

• In 2003, the Mississauga Ice Dogs were sold to local interests;

• In 2004, the Oshawa Generals were sold to local interests;

• In 2004, the Belleville Bulls were sold to local interests;

• In 2006, the Mississauga Ice Dogs were sold to the owner of the Toronto St. Michael’s Majors. The Ice Dogs were subsequently sold to interests who moved the team to St. Catharines while the St. Michael’s Majors relocated from Toronto to Mississauga; and

• In 2006, the Windsor Spitfires were sold to local interests.

OHL Player Selection

Players on various OHL team rosters are selected each year through a draft of eligible “midget-aged” players. This process, commonly known as the “OHL Priority Selection” draft, involves OHL teams selecting midget-aged players from across Ontario, the United States and Europe. Similar to the NHL draft, teams select from the best available midget-aged talent. Unlike the NHL draft, however, some teams have shown a tendency to draft a higher proportion of players from the local / regional area. Players in the OHL are generally between the ages of 15 and 20; as such many of these players are still in high school. As per U.S. college (i.e., NCAA) rules and regulations regarding player eligibility, the NCAA has declared any person who plays in the OHL (or in any CHL league) ineligible to participate at the collegiate level in the United States. In this regard, the NCAA deems these players to be “professionals” (as they are provided with a stipend by their team); even a player that plays just one game at this level will forfeit their eligibility. As such, individuals drafted by an OHL club at age 15 / 16 will face the dilemma of opting to play either OHL hockey immediately or waiting for the opportunity to potentially obtain a scholarship from a U.S. college. In a limited number of cases, individuals who have opted to pursue an NCAA career have returned to play in the OHL / CHL (simply because the OHL / CHL is more heavily scouted and, they believe, would provide them a better apprenticeship to prepare them for the National Hockey League).


In Canada, there is no similar restriction regarding player eligibility (i.e., a player can play CIS varsity hockey after playing in or completing their OHL / CHL careers, and in this regard, most CIS men’s hockey teams are comprised of individuals who have previously played in the CHL).

2009-10 Season

Currently, the league is comprised of 20 teams, equally divided into two conferences; these two conferences are similarly equally divided into two divisions. Figure 24 Ontario Hockey League Franchises, by Conference and Division

Source: Ontario Hockey League / Team web sites

Teams play 68 regular season games, starting in mid-September; the season ends in mid-March. Teams play the majority of their games on weekends (Thursday through Sunday) in order to minimize the number of school days missed by its players (as noted the age of the league is 15/16 through 20, and the majority attend high school). Teams play an unbalanced schedule of approximately 58 games against teams in their own conference (the majority of which are against teams in their own division); teams are generally limited to playing two games (one home and one away) against teams in the other conference in an effort to limit travel and time missed from school. Exceptions include teams like Sault Ste. Marie and Sudbury who, while playing in separate conferences, played each other on six occasions during the 2009-10 season (three home and three away). Once the regular season is completed in mid-March, the top eight teams from each division qualify for playoffs, with each round consisting of a best of seven to ultimately identify a league champion. The champion of the OHL then qualifies for and plays off against the champion of the WHL and the QMJHL, and the team from the host city for the Memorial Cup. Generally, the Memorial Cup tournament (sponsored by MasterCard) is held in May.

Team CityYear

FoundedArena Capacity

Year

Opened

Belleville Bulls Belleville, Ontario 1981 Yardmen Arena 3,257 1978

Kingston Frontenacs Kingston, Ontario 1945 K-Rock Centre 5,200 2008

Oshawa Generals Oshawa, Ontario 1937 General Motors Centre 5,400 2006

Ottawa 67s Ottawa, Ontario 1967 Civic Centre Arena 9,862 1967

Peterborough Petes Peterborough, Ontario 1956 Memorial Centre 4,329 1956

Barrie Colts Barrie, Ontario 1978 Barrie Molson Centre 4,195 1996

Brampton Battalion Brampton, Ontario 1996 Powerade Centre 5,000 1998

Mississauga St. Michael's Majors Mississauga, Ontario 1996 Hershey Centre 5,400 1998

Niagara Ice Dogs St. Catharines, Ontario 2007 Gatorade Garden City Arena 3,145 1938

Sudbury Wolves Sudbury, Ontario 1962 Sudbury Community Arena 5,100 1951

Erie Otters Erie, Pennsylvania 1996 Louis J. Tullio Arena 5,524 1983

Guelph Storm Guelph, Ontario 1991 Sleeman Centre 5,100 2000

Kitchener Rangers Kitchener, Ontario 1963 Memorial Auditorium 6,900 1950

London Knights London, Ontario 1965 John Labatt Centre 9,100 2002

Owen Sound Attack Owen Sound, Ontario 1989 Bayshore Community Centre 3,500 1983

Plymouth Whalers Plymouth, Michigan 1990 Compuware Arena 4,500 1996

Saginaw Spirit Saginaw, Michigan 2002 Dow Event Centre 5,497 1972

Sarnia Sting Sarnia, Ontario 1994 Sarnia Sports & Entertainment Centre 5,500 1998

Sault Ste. Marie Greyhounds Sault Ste. Marie, Ontario 1962 Essar Centre 5,000 2005

Windsor Spitfires Windsor, Ontario 1975 WFCU Centre 7,000 2008

EASTERN CONFERENCE

WESTERN CONFERENCE

East Division

Central Division

Midwest Division

West Division


OHL Team Economics

OHL teams generally obtain the majority of their operating revenue from ticket sales and sponsorships; operating expenses include costs associated with operating the team (including coaching and player related costs, travel and accommodation) and team overhead and administrative expenses. A number of factors will generally impact the financial operating success of a team, including:

• size and characteristics of the local market; • size of the arena (i.e., number of available seats); • ticket prices; • quality of the on-ice product (i.e., team success); • range of other revenue generating amenities available to the team; • nature of the lease arrangement between the team and the building’s owner; and • team marketing and community outreach.

Summary

The Ontario Hockey League is an established Major Junior A (Tier 1) hockey league, with its teams comprised of 16-20 year old players hoping for future NHL stardom. League attendance in the OHL has increased by 25% per game throughout the 2000’s, with this increase concluded to have been brought about because of both increased focus and popularity, as well as because of the construction of new, larger arenas in several key markets including London, Windsor, Oshawa, and Sault Ste. Marie, among others, the construction of which were almost exclusively publicly funded. The financial success of individual teams is generally concluded to be a function of the local market (i.e., size, characteristics, income levels, hockey history, etc.), the quality of the on-ice product (i.e., team success) and the nature and size of the arena the team plays within.


4. Market Support for an OHL Team and Spectator

Facility in St. Catharines

Overview

This Report has profiled socio-economic conditions in St. Catharines and current operations of the Ontario Hockey League and its various teams. Based on this review, an assessment of the St. Catharines market to support OHL hockey was undertaken, concentrating on:

• Potential attendance; and • Supportable building size.

Attendance

As was detailed in Figure 16 above, OHL per game attendance was some 4,020 fans per game, league-wide during the 2009-10 season. With the exception of London, Ottawa and Kitchener (who play in the league’s three largest arenas), the majority of teams generally attract in the range of 3,500 to 5,000 fans per game. Teams at the higher end of this range are generally those teams who are playing within some of the league’s newest buildings, including:

• Windsor, who averaged 6,278 fans per game in 2009-10, more than doubling their historic average of approximately 3,050 fans per game between 2000-01 and 2007-08;

• Sault Ste. Marie, who averaged 4,424 fans per game in 2009-10 (and just under 4,500 fans per game, on average, playing in the Essar Centre, compared to 3,050 fans per game between 2000-01 and 2005-06);

• Oshawa, who averaged 4,164 fans per game in 2009-10 (and 4,637 fans per game, on average, playing in the GM Centre, compared to less than 3,000 fans per game between 2000-01 and 2005-06); and

• Guelph, who averaged 3,989 fans per game in 2009-10 (and 3,880 fans per game, on average, playing in the Sleeman Centre, compared to approximately 3,000 fans per game in their previous facility).

In an effort to identify a plausible attendance target for the Ice Dogs playing within a new facility, a review of each OHL team’s market penetration was undertaken (i.e., the proportion of a centre’s local and broader regional population which attends games). Based on this review (Figure 25, following), a number of conclusions can be reached:

• A typical OHL team’s local market penetration rate is 5.1%;

• Actual local market penetration rates range from a low of 0.4% (Mississauga) and 0.6% (Brampton) to a high of 11.9% (Owen Sound) and 32.0% (Plymouth). Excluding these outliers, the average local market penetration rate is 3.6%.

• A typical OHL team’s regional market penetration rate is 2.2%; and

• Actual regional market penetration rates range from a low of 0.1% (Plymouth, which is part of the Detroit MSA) and 0.2% (Brampton, which is part of the Toronto CMA) to a high of 11.9% (Owen Sound). Generally, the larger the urban area the team is located within, the smaller is the team’s regional penetration rate. Excluding teams from large urban areas (i.e., greater than 250,000 people), the average regional market penetration rate is 3.8%.

In Figure 25, a number of OHL communities have been highlighted, based on (a) their having local / regional population sizes similar to St. Catharines, and (b) these communities being located in areas where they are both a dominant regional centre / CMA yet are located in the shadow of other markets (including, for example, Detroit for Windsor, Toronto for Oshawa and Barrie, Hamilton and Kitchener-Waterloo for Guelph, and Hamilton, Buffalo and Toronto for St. Catharines). The average local market penetration rate for these four markets is 3.0% while the regional market penetration rate is 1.7%.


Figure 25 Market Penetration Rates – Ontario Hockey League

Source: “League Attendance” web site, Statistics Canada, Deloitte

Based on the foregoing, our opinion is that the market penetration potential for an OHL team operating in St. Catharines (irrespective of arena size) would approximate 3.2% of its local population or roughly 4,225 fans per game (equivalent to a regional penetration potential of 1.1%). It should be noted that this potential could not be achieved within the existing Gatorade Garden City Complex / Jack Gatecliff Arena as this facility does not have the seating capacity (including standing room) to accommodate this many individuals. Additionally, it should also be recognized that the identified market potential attendance figure represents average attendance over the course of a season and as such would require a building in excess of this amount. Assuming a “target” capacity figure of 75% and 80%, a building in the range of 5,300 to 5,600 seats (including standing room) would appear to be appropriate. Finally, it should be noted that the target attendance figure of 4,225 fans per game represents, in our opinion, an average annual attendance figure; should a new building with a capacity of some 5,300 to 5,600-seats be developed, it is likely that the team will periodically realize actual attendance at individual games in excess of this figure. In addition, most facilities realize a “honeymoon” period where attendance is materially higher than historic averages during the arena’s initial few years of operation (by way of example, the Sault Ste. Marie Greyhounds average attendance in their former building was 3,050 per game between 2000-01 and 2005-06 and increased by 50% to 4,500 per game between 2006-07 and 2009-10; similarly, the Windsor Spitfires saw average attendance double in its first full season in the WFCU Centre compared to historical averages at its older arena). How long such a “honeymoon period” will last will be directly dependent upon a number of factors, including the on-ice success of the team, the cost versus perceived “value” of attending a game, the state of the local economy, the presence of competing sports and entertainment venues / teams / events, etc.

Building Costs

Across Ontario, a number of new sports and entertainment facilities have been constructed in recent years, with these buildings ranging in price from approximately $18 million to over $65 million. Influencing the price of these buildings are a broad range of factors including overall size (number of fixed seats), in-arena amenities, level of finish, quality of construction and facility components. For example,

• The WFCU Centre in Windsor was constructed in 2006-07 for approximately $72 million, including land acquisition, site servicing, financing, storm water retention ponds and the cost of creating a 1,800-space parking lot. Excluding these features, the net cost is estimated to be approximately $55.0 million.

CityCounty / CA /

CMACity

Barrie 3,731 -- 4,195 88.9% 128,430 422,204 2.9% 0.9%

Belleville 2,888 -- 3,257 88.7% 48,821 91,518 5.9% 3.2%Brampton 2,412 -- 5,000 48.2% 433,806 1,159,405 0.6% 0.2%Erie 3,871 -- 5,524 70.1% 102,612 280,843 3.8% 1.4%

Guelph 3,815 3,880 5,100 76.1% 114,943 127,009 3.4% 3.1%

Kingston 2,353 2,987 5,200 52.4% 117,207 152,358 2.5% 2.0%Kitchener 5,793 -- 6,900 84.0% 204,668 451,235 2.8% 1.3%London 7,772 8,770 9,100 96.4% 352,395 457,720 2.5% 1.9%Mississauga 2,643 -- 5,400 48.9% 668,549 1,159,405 0.4% 0.2%

Niagara 2,883 -- 3,145 91.7% 131,989 390,317 2.2% 0.7%

Oshawa 3,615 4,638 5,400 90.7% 141,590 330,594 3.3% 1.4%

Ottawa 8,359 -- 9,862 84.8% 812,129 1,130,761 1.0% 0.7%Owen Sound 2,568 -- 3,500 73.4% 21,753 32,259 11.8% 8.0%Peterborough 2,949 -- 4,329 68.1% 74,898 116,570 3.9% 2.5%Plymouth 2,830 -- 4,500 62.9% 8,900 2,061,162 31.8% 0.1%Saginaw 4,043 -- 5,497 73.5% 60,000 210,000 6.7% 1.9%Sarnia 3,754 -- 5,500 68.3% 71,149 88,793 5.3% 4.2%Sault Ste. Marie 3,627 4,496 4,800 93.7% 74,948 80,098 6.0% 5.6%Sudbury 4,030 -- 5,100 79.0% 157,857 157,857 2.6% 2.6%

Windsor 3,572 5,063 6,500 77.9% 216,473 323,342 2.3% 1.6%

OHL Average 3,799 5.1% 2.2%

St. Catharines 131,989 390,317 3.2% 1.1%

Market Penetration Rates

County / CA /

CMA

2006 PopulationAverage

Attendance 00/ 01 - 09/ 10

Average in

New Building

Arena

CapacityOcupancy


Additionally, the facility contains a 6,500-seat main spectator arena, in addition to three community ice surfaces, a community centre with gymnasiums, a seniors’ centre and 350 person capacity community hall. It is estimated that the cost of the 6,500-seat spectator arena was $40.0 million ($6,150 per seat).

• The K-Rock Centre in Kingston was constructed in 2007-08 for an estimated price of $46.5 million. On a per seat basis, this 5,200-seat facility cost approximately $8,900 per seat to build.

• GM Centre in Oshawa was constructed in 2003-04 for an estimated price of $45.0 million. On a per seat basis, this 5,400-seat facility cost approximately $8,300 per seat to build.

• The Essar Center in Sault Ste. Marie was opened in 2006 and cost an estimated $25.0 million to construct. On a per seat basis, this 4,800-seat facility cost approximately $5,200 to build.

• The John Labatt Centre in London opened in 2002 and cost an estimated $47.0 million to construct. On a per seat basis, this 9,100-seat facility cost approximately $5,200 to build.

• The Sleeman Centre in Guelph opened in 2000 and cost $21.5 million to construct. On a per seat basis, this 4,800-seat facility cost approximately $4,500 to build.

Other facilities of note include:

• The Abbotsford Entertainment & Sports Centre (Abbotsford, B.C.) was opened in 2009 and cost approximately $66.0 million to construct. On a per seat basis, this 6,900-seat facility cost $9,600.

• Prospera Centre in Chilliwack B.C. was opened in 2004 and cost $22.0 million to build. On a per seat basis, this 4,800-seat facility cost $4,600 to build.

• Prospera Centre in Kelowna, B.C. was opened in 1999 and cost $26.0 million to construct. On a per seat basis, this 6,000-seat facility cost $4,400 to build.

Based on this preliminary review, it is evident that the cost to construct a facility has increased dramatically since 1998, from approximately $4,000 to $4,500 per seat, to more than $9,000 per seat in 2009. Inflated to $2010 equivalents (using a construction inflation factor of 8.00% per year), it would appear that an appropriate cost range for such facilities is in the range of $8,000 to $10,000 per seat, with this cost being highly dependent upon a number of factors, including:

• size of the project (larger seat facilities would tend to have a slightly lower per seat cost); • the presence of ancillary features like community recreation / arenas (which through economies of

scale would tend to lower the per seat cost); and • ease of development.

Figure 26 Multiuse Spectator Facility – Project Costs

Source: Deloitte

Facility Name Location Date Opened Project Cost Per Seat Cost$2010 Estimated

Per Seat Cost

Ontario

WFCU Centre Windsor 2008 $71.7 million ± $6,150 ± $7,000

K-Rock Centre Kingston 2008 $46.5 million ± $8,900 ± $10,000

GM Centre Oshawa 2006 $45.0 million ± $8,300 ± $10,500

Essar Centre Sault Ste. Marie 2005 $25.0 million ± $5,200 ± $7,000

John Labatt Centre London 2002 $47.0 million ± $5,200 ± $8,300

Sleeman Centre Guelph 2000 $21.5 million ± $4,500 ± $8,000

Hershey Centre Mississauga 1998 $22.0 million ± $4,100 ± $8,200

Powerade Centre Brampton 1998 $24.5 million ± $4,900 ± $9,900

Sarnia Sports and

Entertainment CentreSarnia 1998 $18.5 million ± $4,400 ± $8,900

Other Canada

Abbotsford Entertainment

and Sports CentreAbbotsford, BC 2009 $66.0 million ± $9,600 ± $10,200

Prospera Place Chilliwack, BC 2004 $22.0 million ± $4,600 ± $6,500

Prospera Place Kelowna, BC 1999 $26.0 million ± $4,400 ± $8,500


In order to estimate the potential cost of building a new 5,300 to 5,600-capacity Spectator Facility in St Catharines, we have had regard to the above information, and held discussions with our contacts in the facility construction and design industry. In our opinion, an appropriate allowance would be $8,500 per seat (base) to $10,000 per seat, or roughly $45.0 million to $56.0 million.

Summary

The St. Catharines market is projected to be able to support OHL attendance in the range of 4,225 fans per game playing within a new multi-purpose spectator event facility similar to buildings recently constructed in Sault Ste. Marie, Windsor, Oshawa and Kingston. Assuming a “target” capacity figure of 75% and 80%, a building in the range of 5,300 to 5,600 seats (including standing room) would appear to be appropriate. In estimating the potential cost of building a new 5,300 to 5,600-seat Spectator Facility in St. Catharines, consideration was given to recently constructed facilities in Ontario and elsewhere in Canada; additionally, input was sought from contacts in the facility construction and design industry. In conclusion, an appropriate allowance is estimated to be in the range of $8,500 to $10,000 per seat, or roughly $45.0 million to $56.0 million.


5. Comparative and Competitive Facility Assessment

Gatorade Garden City Complex / Jack Gatecliff Arena

The Gatorade Garden City Complex was originally constructed in 1938 and contains two ice pads – the 2,800-seat, 3,145 capacity Jack Gatecliff Arena and the smaller Rex Stimers Arena (these arenas were originally constructed as two separate facilities and later combined into a single facility). The complex was renamed the Gatorade Garden City Complex in September 2007. The Jack Gatecliff arena is currently home to the Niagara Ice Dogs; this facility also serves as the home arena of the St. Catharines Junior “B” Flacons of the Greater Ontario Junior Hockey League. From 1982 to 1986, the facility was home to the Toronto Maple Leafs farm team, the St. Catharines Saints of the American Hockey League. Other teams who have played in this facility include:

• St. Catharines Falcons (Ontario Hockey Association), from 1943 to 1947; • St. Catharines Teepees (OHA), from 1947 to 1962; • St. Catharines Black Hawks (OHA / Ontario Major Junior Hockey League), from 1962 to 1976; • St. Catharines Fincups (OMJHL), from 1977 to 1978.

Currently, the Jack Gatecliff Arena is the oldest facility used in the Ontario Hockey League. Figure 27 Gatorade Garden City Complex

In 2009, the City of St. Catharines incurred operating costs of approximately $1.555 million, comprising items such as salaries and benefits, materials and equipment, building operating costs (including utilities) and maintenance and office costs. Revenues from operations totaled almost $560,000, including revenue from ice rentals, leaving an operating shortfall of just under $1.0 million in 2009. In 2010, operating revenues are budgeted to be some $660,000 while expenses are projected at $1.365 million, leaving an operating shortfall of approximately $705,000. It is assumed that if a new Spectator Arena were to be constructed, the City would be able to free up these funds for use in supporting the operating and / or capital obligations of the new facility.

Recently Opened Ontario Hockey League Facilities

As noted in Section 2, above, and starting with the construction of the Barrie Molson Centre in 1996, the OHL has witnessed a boom in the construction of new, state-of-the-art multi-purpose spectator arenas. Since the 4,200-seat Barrie Molson Centre opened in 1996, nine Ontario-based teams have moved into new facilities including:

• Sarnia – 5,000-seat Sarnia Sports and Entertainment Centre (opened in 1998); • Brampton – 5,000-seat Powerade Centre (opened in 1998); • Mississauga – 5,400-seat Hershey Centre (opened in 1998); • Guelph – 5,100-seat Sleeman Centre (opened in 2000); • London – 9,100-seat John Labatt Centre (opened in 2002);


• Sault Ste. Marie – 5,000-seat Essar Centre (opened in 2005); • Oshawa – 5,400-seat General Motors Centre (opened in 2006); • Kingston – 5,200-seat K-Rock Centre (opened in 2008); and • Windsor – 6,500-seat WFCU Centre (opened in 2008).

This section details the operating history (financial and programming) associated with three of the more recent facilities (Windsor, Kingston and Sault Ste. Marie).

WFCU Centre, Windsor

The WFCU Centre was opened in December 2008. This facility, which includes a 6,500-seat spectator arena (home of the OHL’s Windsor Spitfires), three community ice rinks, two gymnasiums, a seniors’ centre and community rooms, was constructed for a total cost of some $71.7 million, inclusive of land, project financing, hard and soft costs, FF&E, site servicing (including storm water management), and an 1,800-space parking lot. Excluding these latter items, it is estimated that the cost of the main 6,500-seat spectator facility was some $40.0 million. The Centre is located in the eastern section of the City and was built on property formerly occupied by a General Motors trim plant (approximately 11 kilometres from downtown Windsor). Upon opening, the City closed three stand-alone community arenas. Figure 28 WFCU Centre, Windsor

While projected to have earned some $970,000 from operations in 2009 (and more than $1.5 million once the net operating obligations associated with decommissioned facilities are included), the WFCU Centre is projected to have earned approximately $160,000 in its first year of operations (roughly $700,000 after acknowledging the net operating obligations associated with the decommissioned facilities). The main reasons for this difference (approximately $800,000) are attributed to the economic challenges of the Windsor region and the inherent difficulties in securing non-OHL events into a new facility (although this is considered to be more of a short-term, rather than systemic issue, as many shows and events are pre-scheduled into facilities requiring booking lead time, and fewer events were touring across the region). According to City officials, facility naming rights were sold to Windsor Family Credit Union for $1.75 million over a 10-year period ($175,000 per year); other sponsorships include pouring rights (sold to Molson Breweries for $25,000), soft drink rights (sold to Pepsi, who purchased the facility’s sound system) and individual community arena sponsorships (sold to am 800 CKLW, Green Shield and the Windsor Star for $7,500 per rink per year). A small amount of leaseable space also exists in the facility, including two small sport stores (leased to and operated by the Spitfires) and a small Tim Hortons counter (approximately 350 square feet). The Windsor Spitfires are granted priority access to the main spectator and were provided with office and dressing room space, as well as space for laundry facilities, storage, a trainer’s room and a weight room. Fitting out each of these spaces was the responsibility of the Spitfires (although the City paid for special ventilation into the Spitfires’ dressing room to aid in equipment drying). The Spitfires reportedly paid for the main scoreboard.


According to City officials, the lease with the Windsor Spitfires was structured to ensure that the OHL team remains profitable. In this regard, the City granted responsibility for selling facility sponsorships to the Spitfires (who split the income with the City). The Spitfires also collect and remit to the City proceeds from a $1.00 ticket surcharge (concerts are assessed a $2.00 per ticket surcharge). Finally, the Spitfires share in revenue generated from the licensing of suites and club seats. The Spitfires are responsible for leasing the club seats and luxury suites, and retain 50% of the income generated there from. In addition to hosting some 47 OHL games, the WFCU Centre staged some 14 non-OHL events between March 2009 and January 2010, including:

• 4 concerts (Great Big Sea, Bachman Cummings, Johnny Reid and Jann Arden); • 3 family shows (The Wiggles, Playhouse Disney Live and Garden Circus); • 5 other entertainment events (Stars on Ice, Cirque Sublime, Russell Peters, Lord of the Dance, So

You Think You Can Dance); and • 2 other sporting events (Harlem Globetrotters and Monster Spectacular).

The facility is staffed by the City of Windsor who oversee its day-to-day operations; an operating agreement is, however, in place with Global Spectrum who provide facility management and event programming / marketing services.

K-Rock Centre, Kingston

The K-Rock Centre was opened in February 2008. This stand-alone 5,200-seat spectator arena (home of the OHL’s Kingston Frontenacs) was constructed for a total cost of some $46.5 million, excluding land, but including all hard and soft costs, FF&E and site servicing costs. The K-Rock Centre is located in the downtown core of the City. Figure 29 K-Rock Centre, Kingston

For the 12-months ended December 31, 2009, the K-Rock Centre generated an operating profit of some $600,000 versus a budget figure of approximately $1.1 million. Similar to Windsor, a major factor contributing to the net operating revenue shortfall was local economic conditions. A secondary issue appears to also have been attendance at Kingston Frontenac games (which translates into reduce gate receipts and food and beverage spending). In comparison to their first year of operations (March through December, 2008), net operating income was up substantially. The K-Rock Centre generates income from a number of sources, including:

• Kingston Frontenacs (rent); • Other facility events; • Food & beverage sales; • Merchandise sales; • Ticket surcharges;


• Suite and club seat rentals; • Sponsorship and advertising (including naming rights); and • Ice rentals.

As we understand it, Kingston radio station K-Rock 105.7 FM acquired the facility’s naming rights for $1.69 million for a ten-year period ($169,000 per year). In total, some 105 events were programmed into the K-Rock Centre in 2009, up from 83 events in 2008. These events included:

• 37 Kingston Frontenac games; • 19 concerts (Bryan Adams, Our Lady Peace, Stone Temple Pilots, Willie Nelson, Diana Krall, Il Divo,

John Fogerty, The Tragically Hip, etc.); • 23 family shows and other entertainment events (Lord of the Dance, The Wiggles, Bill Cosby,

Russell Peters, Garden Circus, So You Think You Can Dance, Sesame Street Live, etc.); • 7 trade and consumer shows (Event Planners, regional trade / industry association meetings, and

trade shows, etc.); • 5 other sporting events (Canadian Women’s Hockey, Old Timers Hockey, Cheer Alliance

Cheerleading, etc.); and • 14 other public events (New Years Eve celebrations, Chamber of Commerce, community flu clinic,

press conferences, staff appreciation events, etc.). The facility is owned by the City of Kingston (who are financially responsible for the facility, including being entitled to receive all operating surpluses or support any operating loss); the facility is managed by Arcturus / SMG Canada on behalf of the City.

Essar Centre, Sault Ste. Marie

The Essar Centre was opened in the fall of 2006. This stand-alone 4,800-seat spectator arena (home of the OHL’s Soo Greyhounds) was constructed for a total cost of some $25.0 million, excluding land, but including all hard and soft costs, FF&E and site servicing costs. The Essar Centre is located in the downtown core of the city, on the same site as the facility it was built to replace (Memorial Gardens). Figure 30 Essar Centre, Sault Ste. Marie

For the 12-months ended December 31, 2008 (the latest year for which financial information is available), the Essar Centre incurred an operating loss of $270,000; this compares to the aged Memorial Gardens which required operating support of almost $500,000 per year. The Essar Centre generates income from a number of sources, including:

• Soo Greyhounds (rent); • Other facility events; • Food & beverage sales; • Box office / ticket fees;


• Suite and club seat rentals; • Sponsorship and advertising (including naming rights); and • Ice rentals.

Steelback Brewery originally purchased naming rights to this facility in May 2006 for $1.35 million over 10 years (with approximately $120,000 paid in Year One and escalating annually thereafter). However, in November 2007, Steelback Brewery filed for bankruptcy protection and defaulted on its second payment to the City of $135,000. In July, 2008, the City of Sault Ste. Marie announced that Essar Steel Algoma Inc. had purchased the facility’s naming rights in a deal worth $1.5 million for 10 years. Unlike the first contract with Steelback Brewery, the amount was paid upfront in a lump sum, instead of in annual installments. Essar also paid for all new signage for the facility as part of the deal. In operating the facility, the facility receives:

• a percentage of ticket revenue generated by the OHL team (0% for the first $1.0 million, 10% of the next $250,000, 25% of the next $250,000 and 50% of all ticket revenue over $1.5 million);

• 90% of concession revenue (the OHL team receives 10%); • 10% of advertising (the OHL team receives 90%); • 0% of team merchandise; • 100% of facility naming right revenue; • 100% of parking revenue; and • 100% of suite revenue during the first 10 years and 80% thereafter.

In 2008, the facility generated almost $315,000 from the OHL team, and some 110 events days were programmed into the Essar Centre, including:

• 43 Soo Greyhounds’ games; • 9 concerts (Three Days Grace, Blue Rodeo, John Mellancamp, Backstreet Boys, Sheryl Crow, etc.); • 13 family shows and other entertainment events (High School Musical, Disney on Ice, Moscow

Ballet, Lord of the Dance, Thomas the Train, etc.); • 7 trade and consumer shows (Sault Ste. Marie Home and Outdoor Show, EDC Job Fair, Forestry

Expo, etc.); • 17 other sporting events (OHL All Star Game, Monster Trucks, etc.); and • 21 tournament event days (Aboriginal Hockey championships, world ringette tournament, etc.).

The facility is owned and managed by the City of Sault Ste. Marie (who are financially responsible for the facility, including being entitled to receive all operating surpluses or support any operating loss).

Other Facilities

Depending on the market they are located within, other new OHL buildings have generated positive earnings from operations, while others have realized operating losses. For example,

• The John Labatt Centre has earned an operating profit in each year its existence, based principally on the success of the OHL London Knights and the success of the building’s operator in securing special events and other bookings (including concerts, etc.); and

• The General Motors Centre in Oshawa has realized operating shortfalls in the range of $200,000 in 2008, and an estimated loss of some $700,000 in 2009 due in part to the location of Oshawa next to Toronto (where only one concert was booked through the first nine months of the year) and local economic conditions. This facility has a projected operating loss in 2010 of $550,000.

Summary

Figure 31, following, summarizes the operating results of the three above profiled facilities. Based on the above, it is noted that the K-Rock Centre, despite having lower average OHL attendance, generated more income than the Essar Centre in 2009, based primarily on the strength of more revenue generating events (while the Essar Centre had more event days, many were hockey tournament days which do not generate the same level of revenue for the facility). It should also be noted that the Essar Centre is municipally-run and had higher operating costs.


Figure 31 Summary Financing Results, Select OHL Facilities

Notes: 1 WFCU Centre financial information is based on forecasted results for 2009 and include

revenue and operating expenses associated with the three community ice pads. Non-OHL

event information is for the period March 2009 through January 2010.

2. K-Rock Centre financial and event information is for the 12-month period ended December

31, 2009.

3. Essar Centre financial and event information is for the 12-month period ended December

21, 2008.

Source: Deloitte, City of Windsor, Global Spectrum, City of Kingston, City of Sault Ste. Marie.

The WFCU Centre generated the most income despite it having the fewest events in 2009; however, it should be noted that the financial results reported for this facility include operating revenue for the entire complex, including its three community ice pads. Excluding the income generated by these components, it is likely that the main 6,500-seat spectator arena realized a net loss from operations. Finally, it is noted that the nature of the lease agreement between the OHL club and the spectator arena will have a significant impact on facility revenue. As noted, in Sault Ste. Marie, the facility retains all income from suites and shares 10% of net concession revenue with the team. This compares with Windsor, where the Spitfires are allotted 50% of suite and concession revenue. As we understand it, the facility in Kingston retains all revenue from suites and club seats, and the building receives a higher proportion of ticket revenue as rent.

Competitive Facilities

Within the greater St. Catharines / Niagara region, there exists a number of entertainment venues which can be considered to be competitive with a proposed spectator facility in St. Catharines. This competitive landscape includes venues in Hamilton, Buffalo, Niagara Falls and Toronto.

Copps Coliseum

Copps Coliseum (“Copps”) is a 17,400-seat sports and entertainment venue located in downtown Hamilton. Adjoining Jackson Square, the arena is home to the Hamilton Bulldogs of the American Hockey League (the second longest serving pro hockey franchise in Southern Ontario). Since opening in 1985, Copps has been home to both Ontario Hockey League and American Hockey League franchises. In 2009, Research in Motion co-CEO Jim Balsillie was awarded exclusive rights to Copps and unveiled plans to significantly renovate the building into a state-of-the-art facility in anticipation of an NHL franchise coming to Hamilton. Copps regularly attracts a number of other sporting and entertainment events, including:

• World Junior Hockey Championships (1986); • Canada Cup (1987, 1991); • CHL Memorial Cup (1990); • NHL hockey (1992, 1993); • FIBA World Basketball Championships (1994); • NBA basketball (1995 – 1997); and • Labatt Brier (2007).

WFCU Centre K-Rock Centre Essar Centre

Windsor Kingston Sault Ste. Marie

Gross Operating Revenue $3,075,000 $2,460,000 $1,895,000

Gross Operating Expenses $2,915,000 $1,850,000 $2,165,000

Net Operating Income $160,000 $610,000 ($270,000)

Operating Saving $545,000 n/a $485,000

Net Operating Position $705,000 n/a $215,000

Number of Events

OHL 46 37 43

Non-OHL 14 68 67

Total 60 105 110


Figure 32 Copps Coliseum, Hamilton

In 2009 (through October), some 16 concerts were staged in the facility, featuring acts such as Britney Spears, Kings of Leon, Green Day, Motley Crew, Nickelback and Brad Paisley. These 16 events attracted more than 125,000 fans (approximately 8,000 per show). In addition, Copps has staged numerous family shows, other sporting events (including figure skating performances), trade shows and performances (for example, Cirque du Soleil). Including home games of the Hamilton Bulldogs (and the above noted 2009 events), it is estimated that Copps staged some 75 total events and attracted more than 400,000 spectators. This venue is considered to be competitive to a potential new Spectator Arena in St. Catharines as the market area of these venues overlap (Copps is located some 55 kilometres from downtown St. Catharines), and in some instances, the buildings would compete for the same performances / acts. Finally, with a significantly larger seating capacity, promoters would be able offer lower ticket prices and have the potential to sell a greater number of seats (and thereby increase their ability to make a profit).

HSBC Arena, Buffalo New York

HSBC Arena is an 18,700-seat sports and entertainment venue located in downtown Buffalo New York. The arena is home to the NHL’s Buffalo Sabres and the Buffalo Bandits (National Lacrosse League) and once served as the home venue for professional teams playing arena football, indoor soccer and roller hockey. HSBC Arena is located approximately 35 kilometres from downtown St. Catharines. Figure 33 HSBC Arena, Buffalo, NY


Since opening in 1996, HSBC Arena has staged a number of concerts and other sporting events, including NCAA basketball (2000, 2004, 2007 and 2010), NCAA hockey (2003), professional wrestling, and in 2010-11, will host the IIHF World Junior Hockey Championships. Concerts and entertainment events staged in this venue include a broad range of contemporary artists, comedians, ice shows, circuses; events scheduled to occur in HSBC Arena in the near term include Pearl Jam, Black Eyed Peas, Roger Waters, Tyler Perry's “Madea's Big Happy Family” and WWE wrestling. Like Copps Coliseum, HSBC Arena is considered to be competitive to a potential new Spectator Arena in St. Catharines as the market area of these venues overlap. Perhaps more importantly, HSBC would be able to attract higher profile acts, artists and events that would compete for the entertainment spending dollar of individuals located in the greater St. Catharines – Niagara region.

Avalon Ballroom, Niagara Falls Ontario

The Avalon Ballroom is a 1,500-seat theatre located in Fallsview Casino Resort in Niagara Falls, Ontario. As we understand it, this venue stages over 250 shows per year, and has welcomed such acts as Paul Anka, Julio Iglesias, Regis Philbin, Wayne Newton, Ringo Starr, Jay Leno, Lionel Richie, Diana Ross, Dolly Parton and The Doobie Brothers. Figure 34 Avalon Ballroom, Niagara Falls Ontario

Unlike other venues which market themselves as rental venues for touring artists, family shows and other entertainment, one of the principal objectives of the Avalon Ballroom and its entertainment programming is to bring prospective gamers to the Fallsview Casino. In this regard, we understand (as is done by casinos in other jurisdictions) that a number of patrons to these shows are provided with complementary tickets and / or that the artist appearing at the venue is provided with an income guarantee per performance (as opposed to other venues where acts are brought in by a promoter who takes risk). Additionally, there has been unsubstantiated speculation that Fallsview Casino Resort could add a 5,000-seat entertainment complex, similar to that which exists at Casino Rama (located in Orillia, Ontario) and Caesars Windsor (located in Windsor, Ontario). In our opinion, the Avalon Ballroom, from a non-sporting event perspective, would be considered as competitive to a potential new Spectator Arena in St. Catharines. If a 5,000-seat entertainment complex were added, our opinion is that it would be highly competitive with the new Spectator Arena.

Niagara Falls Convention & Civic Centre, Niagara Falls Ontario

The Niagara Falls Convention & Civic Centre is a new convention facility scheduled to open in April 2011. This 280,000 square foot LEED-certified facility will include a number of components including:

• an 80,000 square foot free-span Exhibition Hall; • a 17,000 square foot Ballroom; • 26,500 square feet of flexible meeting and break-out space; • state-of-the-art acoustic and presentation technologies; • food and beverage offerings; and • a 1,028-seat theatre.


Figure 35 Niagara Falls Convention & Civic Centre

Based on discussions with facility management, we understand that the theatre is intended to be used for various events including keynote addresses at conferences, awards ceremonies, lectures, theatrical performances, musicals and some live music. In addition, it is expected that the 80,000 square foot Exhibition Hall could accommodate up to 6,000 seats and be used for “flat floor” sporting events, including boxing, cheerleading competitions, etc. We understand that a number of events have already been booked into the facility, including provincial and national-level conventions, cheerleading competitions, dance competitions, trade and consumer shows (including a home and garden show, a motor cycle show and an RV show), some corporate entertainment and some theatrical events. In our opinion, this facility will be more competitive with smaller facilities like the Avalon Ballroom and the planned St. Catharines Centre for the Arts; it may also prove to be competitive with the rumored 5,000-seat entertainment complex at Fallsview Casino and the proposed St. Catharines Spectator Arena, depending on the number of 5,000-person events it is able to attract. As such, this facility would tend to increase the level of competition for the entertainment spending of local / regional consumers.

Seneca Niagara Casino and Hotel, Niagara Falls NY

The Seneca Niagara Casino and Hotel has two entertainment venues, the 2,200-seat Seneca Niagara Events Centre and the more intimate 450-seat Bear’s Den. The Seneca Niagara Events Centre is located on the second floor of the hotel, located adjacent to the Seneca Niagara Casino.

Figure 36 Seneca Niagara Casino and Hotel, Niagara Falls NY


As we understand it, the casino programs approximately eight to ten shows per month (approximately 100 to 120 per year) into these venues. Acts which are booked into these facilities are diverse and include musical and comedy acts, boxing events, and lectures. Some of the performers who have played the venue include Michael McDonald, Aretha Franklin, Kid Rock, Bill Cosby, Steely Dan, Davey Jones, Sass Jordan, David Wilcox and Richard Lewis. Similar to the Avalon Ballroom, the entertainment venues at Seneca Niagara Casino and Hotel are considered to be a competitive to a potential new Spectator Arena in St. Catharines, particularly for non-sport events.

Darien Lake Performing Arts Center

This is a partially covered amphitheatre is located within the Darien Lake Theme Park Resort in Darien, New York (located between Buffalo and Rochester). The 20,000-person capacity amphitheatre is operational from June to September each year and is programmed with musical acts by Live Nation. Figure 37 Darien Lake Performing Arts Centre, Darien NY

Artists currently (as of April 22, 2010) on Darien Lake’s 2010 calendar include The Dave Matthews Band, Lynryd Skynrd, Brooks and Dunn, Kings on Leon, Green Day, John Mayer and Tom Petty and the Heartbreakers with Crosby Stills and Nash. Some of the acts booked into this venue have also been booked into 5,000-seat sports and entertainment venues. This venue is considered to be directly competitive during the summer months with both the Molson Amphitheatre in Toronto and the proposed new Spectator Arena in St. Catharines.

Artpark, Lewiston New York

Artpark offers a full spectrum of entertainment, from productions of Broadway musicals, concerts, and celebrity performances in its Mainstage Theater, to free concerts and cultural festivals in the Outdoor Amphitheater. Created especially with the family in mind, Artpark also offers art, theater, and video camps for youth, and a variety of family programs on weekends. During the 2010 Summer concert series, a number of acts and performances will be staged at this venue, many of which are also able to be (and have been) booked into 5,000-seat spectator arenas, including Alice Cooper, Great Big Sea, Celtic Women, Bachman & Turner, Blue Rodeo, Peter Frampton and Trisha Yearwood. Like the Darien Lake Performing Arts Centre, this venue is considered to be directly competitive during the summer months with both the Molson Amphitheatre in Toronto and the proposed new Spectator Arena in St. Catharines.


Figure 38 Artpark, Lewiston NY

Proposed Niagara Centre for the Arts

The proposed Niagara Centre for the Arts (the “NCFA”) will contain both Brock University’s School of Fine and Performing Arts and a new Centre for the Arts. The NCFA will build upon the success of Brock’s existing Center for the Arts, which contains the 533-seat Sean O’Sullivan Theatre and the 500-seat David S. Howe Theatre. The NCFA will also contain an 800-seat concert hall with the capability of hosting a wide range of musical events. The NCFA is also to have a film theatre with seating for approximately 200 and a performance theater with an additional 200 seats. The School of Fine Arts is to contain two additional teaching and performance spaces with 250 and 300 seats respectively; however this space would be programmed and managed by Brock’s School of Fine and Performing Arts. It is anticipated that the NCFA would program approximately 70 to 80 events per year, which is a slight increase over Brock’s existing Center for the Arts, which schedules some 50 to 60 events annually. Brock currently hosts a wide range of events from live music, family acts, comedy acts and dance acts. Given the size and focus of this venue, the NCFA is not considered to be directly competitive; the venue and the proposed Spectator Arena will, however, compete for a share of local / regional consumer’s entertainment spending.

Toronto facilities

In addition to local and regional facilities, a proposed St. Catharines Spectator Arena will compete against venues located in the City of Toronto for events and for a share of local / regional consumer’s entertainment spending. Venues which will be competitive for artists, events and consumer entertainment spending include the Molson Amphitheatre (owned by Live Nation), the Air Canada Centre, Rogers Centre, and the city’s many smaller performing arts and concert venues. One of over-riding reasons for the dominance of the Toronto market and its performance venues is the use of radius clauses in performance agreements. These clauses are typically included to prevent an artist from performing another concert within a certain number of kilometres for a certain length of time in order to protect the promoter’s / venue’s territory (i.e., preventing another promoter / venue from booking the artist for another show nearby and thereby “stealing” audience and impacting the profitability of the show). Depending on the profile and popularity of an artist, radius clauses can extend from approximately 80 kilometres to as wide as 250 kilometres and extend for up to 90 days. As we understand it, the impact of Toronto-centred venues and promoters has impacted the ability of venues in Oshawa, Mississauga, Brampton and Barrie from attracting events to their venues.

Other Niagara / Buffalo facilities

Other potentially competitive venues and events which may compete for a share of local / regional consumers’ entertainment spending include:

• The Vineyard Summer Performance Services at Jackson-Triggs Niagara Estate; and

• The proposed “Project Niagara Festival”, which is intended to feature a variety of music, including classical, jazz, blues, world, soft pop, opera and musical theatre.


Summary

Within the greater St. Catharines / Niagara region, there exists a number of entertainment venues which can be considered to be competitive with a proposed spectator facility in St. Catharines. This competitive landscape includes venues in Hamilton, Buffalo, Niagara Falls and Toronto, and involves both venues and promoters that will create competition for artists, events and consumer entertainment spending.

Summary

Since 1996, ten Ontario Hockey League teams have moved into new 5,000- to 9,000-seat sports and entertainment spectator facilities. Depending on the location of these facilities, the nature and extent of revenue generating amenities, the state of the local economy, and the “gate success” of the OHL team anchor tenant, among other factors, these facilities can realize net operating positions ranging from a loss of $0.5 million (or more), to a profit of $0.5 million (or more). In addition to hosting OHL hockey games, these facilities have staged numerous other hockey, concerts, family shows, other sporting events, and trade and consumer shows and events. Figure 39 Non-OHL Programming at Multi-Use Sports and Entertainment Centres

Depending on the market within which a facility is located, and its location vis-à-vis competing centres and facilities, the number of events a facility is able to secure may be dramatically impacted. It is concluded that within the greater St. Catharines / Niagara region, there exists a number of entertainment venues that will be competitive with a proposed new spectator facility in St. Catharines. This competitive landscape includes a number of existing venues in Hamilton, Buffalo, Niagara Falls and Toronto, and involves both venues and promoters creating competition for artists and events and, in turn, venues and promoters creating competition for the entertainment spending of consumers.


6. Assessment of Facility Locations

Per the requirements of this assignment, Deloitte was tasked with reviewing three alternative sites for the proposed Spectator Arena. These sites include:

• the eixsting Gatorade Garden City Complex / Jack Gatecliff Arena; • the “Lower Level Parking Lot” site; and • the Niagara Regional Police building on Church Street (this site is noted as a “potential and

tentative site” and would be dependent upon current negotiations).

Gatorade Garden City Complex / Jack Gatecliff Arena Site

Site Description

The Gatorade Garden City Complex contains the existing Jack Gatecliff and Rex Stimers Arenas. The site is located on the eastern edge of the City’s downtown core and is borderd by Queenston Street on the north, Gale Cresent to the south, Geneva Street on the west, and Riordon street to the east. The site also includes an existing parking lot located on the east side of Riordon street. In total, the site encompasses some 220,000 square feet, excluding the Riordon Street parking lot. The site, outlined in Figure 40, following, is not fully controlled by the City of St. Catharines and would need to be assembled. Missing from the City’s ownership is the block of land fronting Queenston Street on the opposite side of Division Street as well as the strip mall located in the lot adjacent to the arena. Figure 40 Gatorade Garden City Complex / Jack Gatecliff Arena Site – Site Location


Figure 41 Gatorade Garden City Complex / Jack Gatecliff Arena – Area Photos

Parking Availability

The Gatecliff site has approximately 1,270 off-street public parking spaces located within 500 metres of the site. Figure 42

Gatorade Garden City Complex / Jack Gatecliff Arena – Parking Availability

It should be noted that the majority of these parking spaces, including those located within the Lower Level Parking Lot, the Carlisle Street Garage and the Garden City Parking Lot, are located in excess of 400 metres from the site.

Site Suitability

Potential for VIP Onsite Parking – The site can utilize the adjacent parking lot for luxury suite holders and other VIPs. Ability to accommodate event requirements – The site has the potential to accommodate the loading / unloading requirements of transport trucks. Riordon Street is wide due to angled on-street parking and thus can be utilized to accommodate the turning radius for transport trucks. Depending on the configuration of the arena, the site could also utilize Division Street that disects the property (potentially by closing a portion of the street) to accommodate facility servicing needs. Street Exposure – The site borders Geneva Street a main artery in the city. The location will lend itself to adequate exposure for naming rights and allow the facility to maintain a prominent street presence. Traffic Flow – The site currently does not experience significant pre- or post-event traffic issues as parking is dispersed to a number of locations and the site is situated close to a number of main traffic arteries (including Geneva Street, Highway 406, Queenston Street, etc.). Additionally the site is located on existing municipal transit routes. More detailed traffic studies should, however, be commissioned to better understand how a larger-capacity facility would impact traffic patterns.

Parking Lot LocationNumber of

Parking Spaces

On-Site Parking 77

Riordon Street Parking Lot 82

Race Street Parking Lot 54

Head Street Parking Lot 42

Lower Level Parking Lot 250

Proposed Carlisle Street Garage 700

Garden City Parking Lot 67

Total 1,272


Construction Issues – As the estimated construction time for a 5,000-seat spectator arena is roughly 18 months, the construction of a new spectator facility on this site would need to be staged so as not to interfere with the operations of Jack Gatecliff arena during the OHL season (else the Niagara Ice Dogs and other users of Jack Gatecliff Arena would have to find temporary facilities during the construction period). The site is adjacent to two condominium developments (on the opposite side of Gale Crescent) as well as to a number of businesses. As such, construction scheduling and planning would be required in order to minimize the impact on neighbouring properties. Site Compatibility – As the site is currently used as a venue for Major Junior A (Tier 1) and Junior B hockey, in addition to recreational ice usage, a spectator facility would be consistent with current usage. Soil Stability Issues – No geotechnical information was made available to ascertain the developability of the site.

Lower Level Parking Lot

Site Description

The “Lower Level Parking Lot” site is located south of St. Paul Street and is bordered on the south by McGuire Street and Highway 406. The site has Carlisle Street located to its east and Westchester Crescent to its west. The site is dissected by The Parkway road which encircles the current paved lower level parking lot. The site, as outlined in the Figure 43, is approximately 280,000 square feet in total size. However it should be noted that the shaded area in Figure 43 includes the Westchester Crescent / St. Paul Street parking lot, as well as the inclined or elevated parking spaces to the north of The Parkway road and the public stairway from St. Paul Street. Due to the irregular shape of the site, the net developable area is estimated to be roughly 190,000 to 210,000 square feet, with additional space for onsite parking. The site has street level access from St. Paul Street, near James Street. This unique attribute would allow people to enter the proposed venue at both concourse and ice level. Figure 43 Lower Level Parking Lot – Site Location


Figure 44 Lower Level Parking Lot – Area Photos

Some potential issues with the proposed location are:

• The irregular shape of the site may create design challenges; • The amount of setback required from Highway 406 as well as bordering buildings would have to be

considered; and • Further due diligence on the soil stability of the location would have to be undertaken.

Parking

The Lower Level Parking Lot has approximately 1,650 off-street public parking spaces located within 500 metres of the site. This site can be easily accessed by the City’s two main downtown parking garages, including the Ontario Street Parking Garage to the north-west, and the Carlisle Street Parking Garage to the north. If a western entrance to the site was created near Ontario and St. Paul Streets, the Ontario Street parking garage would be approximately 250 metres from this entrance; combined with the Carlisle Street Parking Garage, some 1,100 parking spaces would be located within 350 metres of the site.

Site Suitability

Potential for VIP Onsite Parking – It is anticiapated that onsite parking could be provided for VIP guests. The development of this parking area would have to be done at the design stage in order to integrate it into the overall site plan. Ability to accommodate special event requirements – The site is believed to have enough sufficient space to be able to accommodate the requirements for transport trucks being easily loaded and unloaded.


Figure 45 Lower Level Parking Lot – Parking Availability

Street Exposure – The site borders Highway 406 and as such would have significant traffic exposure, which would provide adequate exposure for naming rights and allow the facility to be developed with an iconic street presence. Traffic Flow – Due to the disbursed nature of parking facilities and the location of the site near key traffic throughways (including Highway 406, St. Paul Street, Ontario Street and Geneva Street, among others), pre- and post-event traffic issues are preliminarily concluded to be manageable. Detailed traffic assessment studies will, however, be required in order to understand the impacts of placing a 5,000-seat spectator venue on this location. Additionally the site is well serviced by municipal transit and the city’s main bus terminal is located within 500 metres of the site. Construction Issues – The current site is used for monthly permitted parking, this parking demand would have to be shifted due to the use of the site. The site is also bordered by a number of businesses and residential units on St. Paul Street; however it would be anticipated that minimal interference would be caused by construction. In addition, the site is currently a “hub” of existing underground services (including hydro and storm water), which may need to be relocated and / or otherwise addressed. Site Compatibility – The site backs onto St. Paul Street, an existing entertainment zone in the City of St. Catharines. The site will also border the proposed downtown performing arts center which will also hold concerts and other events. Thus this venue would be consistent with existing uses in the area. Soil Stability Issues – Based on information provided by the City (2005 geotechnical investigation prepared by Trow Associates Inc.), evidence exists to suggest, based on the encountered soil conditions, that structures could theoretically be set on shallow foundations, however, such foundations are considered to have greater risk of settlement compared to deep foundations set on bedrock. This increased risk is concluded to be caused by:

• The fill within the site was likely placed in an uncontrolled manner; • Full compensation of the loads requires that all of the soil under the building footprint be removed; • There is a layer of fairly free draining fill below the water table, meaning that there may need to be

excavations that extend below the water table (which are concluded to be likely), and significant dewatering will be required (which will increase overall development costs); and

• Future dewatering will likely be required as soils in the general vicinity of the development have the risk of causing settlement of the project.

As such, it is concluded that the cost of building the proposed Spectator Arena on this site may need an additional allowance to compensate for soil stability and other geotechnical issues associated with development.


Parking Spaces

On-Site Parking (estimated) 80

Riordon Street Parking Lot 82



St. Paul / Westchester Parking Lot 21

Market Square Parking Lot 113

William Street Parking Lot 19

Ontario Street Parking Garage 469



Total 1,647


Church Street Location

Site Description

The final site considered is the block currently housing the Niagara Regional Police building. This site is bordered by Church Street to the north, Carlisle Street to the west, Academy Street to the east and King Street to the south. This is the smallest of the three sites reviewed, and encompasses approximately 110,000 square feet. It should be noted that the existing police site is approximately 70,000 square feet, while the remaining portions of the block currently contain existing residential buildings. The City of St. Catharines does not currently own any of the properties located within this block and as such, would need to purchase their freehold interest. Figure 46 Church Street Location – Site Location

Parking

While the Church Street site is located directly opposite the proposed Carlisle Parking Garage, this site has the fewest number of off-street municipal parking spaces within 500 metres. As outlined in Figure 48, following, the Church Street site benefits from approximately 1,050 parking spaces within 500 metres; this compares to the other two locations which have upwards to 1,650 parking spaces within 500 metres.

Site Suitability

Potential for VIP Onsite Parking – Due to the small size of the site it is difficult to assess, without proper site planning, whether sufficent on-site parking could be developed. Due to the proximity of the site to the Carlisle Street Parking Garage, it may be possible to grant preferred parking to Spectator Arena suite holders on a priority basis.


Figure 47 Church Street Location – Area Photos

Figure 48 Church Street Location – Parking Availability

Ability to accommodate additional or special event requirements – Due to the small footprint of the site, and without proper site planning, it may be difficult to accommodate special event requirements and building design would have to accommodate this issue. Street Exposure – This site is considered to have the least traffic exposure of the three proposed sites, however due to its location near the downtown library, city hall, bus station as well as a number of office towers, it would have significant pedestrian traffic. Traffic Flow – Greater analysis would have to be undertaken on this site, as this location benefits from the fewest number of off-site parking spaces and has more limited traffic arteries. The site however is well serviced by municipal transit and the central bus terminal is located within metres of the site. Construction Issues – The current site has a police detachment on site which is a special purpose building, and as such site, preparation costs may be higher for this site compared to other locations (due to the need to relocate this building). The site is bordered by a number of businesses and residential units and construction issues could be significant. Site Compatibility – The site borders existing residential properties, the Ministry of Transportation building, commercial buildings (including a funeral home) as well as the library. Of the three proposed sites, the Church Street Location is considered to be the least compatible with its surrounding properties.


Parking Spaces



Library Parking Lot 77

Market Square Parking Lot 113



Total 1,053


Soil Stability Issues – No geotechnical information was made available to ascertain the developability of the site.

Conclusions

Based on the foregoing, each of the locations identified for the proposed Spectator Arena have their advantages and disadvantages:

• The Gatorade Garden City Complex / Jack Gatecliff Arena site has the advantage of user group familiarity. In addition, the site is concluded to be large enough to accommodate a new 5,000-seat facility, as well as accommodate the requirements for transport truck access, on-site parking and have sufficient off-street parking within 500 metres. However, development staging will be an issue (as the site currently houses the arena where the Niagara Ice Dogs currently play) and additional land acquisition by the City will be required.

• The Lower Level Parking Lot site has the advantage of creating an iconic presence overlooking Highway 406, as well as complementing the City’s planned downtown performing arts centre and existing entertainment zone on St. Paul Street. Soil, geotechnical issues and the potential need to relocate existing underground services may, however, serve to significantly increase the cost of development at this location.

• The Church Street site has the advantage of being close to a number of businesses and is well serviced by municipal transit. However, a lower street presence (compared to the other two locations under consideration), coupled with the need for the City to acquire portions of this site and compatibility concerns, render this location the least preferred.

In conclusion, both the Gatorade Garden City Complex / Jack Gatecliff Arena site and the Lower Level Parking Lot site have a number of advantages as well as significant potential disadvantages, and it is recommended that the City undertake additional due diligence on these sites in order to identify a preferred location. The Church Street site is concluded to be the least preferred of the three sites evaluated.

Update

Subsequent to the issuance of the original report in April of 2010, the Spectator Facility Task Force chose the existing Gatorade Garden City Complex Site as the preferred site for development.


7. Financial Assessment

Base Assumptions

With the foregoing review and analysis of the greater St. Catharines / Niagara market, coupled with an examination of various comparable and competitive facilities, we developed a multi-year proforma cash flow model to depict the potential operations of a new 5,300- to 5,600-capacity Spectator Arena. In producing this model, Deloitte was required to make a number of assumptions pertaining to the design and amenity features that would be included within this building, as well as make assumptions regarding how the facility would be programmed to accommodate recreational ice users as well as concerts, family shows and other special events and building rentals.

Building Size

For the purpose of this assessment, we have assumed that the Spectator Arena would have a total capacity of 5,450 seats, comprising 5,200 fixed seats and a standing room capacity of 250 persons. In addition, it is assumed that the Spectator Arena would contain many of the amenities and other “revenue generating features” common to new / recently built facilities including suites, club-seat areas, in-house restaurants, enhanced concessions / food and beverage operations, etc. It has further been assumed that the all-in cost of delivering such a venue, inclusive of hard and soft costs, furniture, fixtures and equipment, but excluding land and extraordinary site preparation costs, would be $45.0 million. In providing these enhanced revenue generating features, the traditional lease / licensing arrangement between the lead tenant and their home arena are concluded to differ substantially to the arrangements that will be required. In addition, it is also assumed that the facility would be able to sell naming rights as well as secure other venue “sponsorships” (including “pouring rights” and other similar-type sponsorships). For the purpose of this assessment, it has been assumed that all revenues attributable to these features would accrue to the benefit of the building; similar to the arrangements structured at most other newly developed arenas. In reviewing and estimating the Arena’s development and operating economics, we identified a number of base assumptions and hypotheses. Such assumptions deal with a hypothetical calendar of events, and certain revenue and operating expense assumptions. Such assumptions and hypotheses are discussed below.

Inflation

All dollar measures are in current Canadian dollars, with an allowance for general expense inflation of 3.0% per annum, and an allowance for utilities expense inflation of 4.0% per annum. Facility revenue is projected to grow 3.0% per annum.

Calendar of Events

The calendar of events, event days and attendance levels for the Arena, for an average year of Facility operations is summarized in Figure 49, following. In total, some 84 event days, covering 81 separate events are assumed, including 37 OHL hockey games (three pre-season and 34 regular season), five concerts, ten family shows, eight other sporting events, eight other entertainment events, three multi-day trade and consumer shows and six other rentals. In addition, it is also assumed that the Arena would be available for use by minor and youth organizations on a regular basis throughout the winter season (approximately September 1 through April 30), including minor hockey (boys and girls), adult hockey, the St. Catharines Junior B Falcons, etc. It is also assumed that the ice would be removed between May 1 and July 31, during which time the Arena could be utilized for a broad range of floor events. During August, it is presumed that the ice would be reinstalled and that the Arena would be used for various hockey camps, training camps and other ice uses.


Figure 49 St. Catharines Spectator Arena – Calendar of Events

Figure 49 b Calendar of Events as a percentage of total events

Niagara Ice Dogs or Other Similar Lead Tenant

It is assumed that the Niagara Ice Dogs or other similar hockey team will serve as the main or lead tenant in the building and attract an average of 4,225 fans to each of their home games during the regular season (it is assumed that during the pre-season, the team would attract an average of 2,000 fans to each of their three exhibition games). Unlike the current lease arrangements with the City, it is assumed that the Niagara Ice Dogs (or other similar lead tenant) would pay a percentage of their gross ticket revenue for the right to utilize the facility. In addition, the Team would be entitled to receive a share of the net revenue generated from concessions (including luxury suite catering) during its home games, and advertising. Assuming allowances for complementary tickets and average realizable ticket prices, it is estimated that the lead tenant would pay some $212,000 per year in rent.

Concerts

Similar to other 5,000+-seat venues in Ontario which have, it is envisioned that the Arena would be successful in securing some concert dates per year. However, unlike sports and entertainment venues located in markets with reduced competition (for example, London, Kingston and Sault Ste. Marie), it is likely that a Spectator Arena in St. Catharines will directly compete for events and a portion of local consumer entertainment spending similar to facilities in Windsor and Oshawa. While assuming that the Spectator Arena would be able to secure events, it should noted, however, that the market for live entertainment is ever changing and during some periods of time, there may be a larger number of touring acts / events which would play within a 5,000-seat venue; as such the number of concerts which the Spectator Arena could attract will fluctuate, perhaps materially, from year to year.

User / TenantAnnual Number

of Event Days

Average

Attendance

Annual

Attendance% of Capacity

Lead Tenant (OHL Team) 37 4,225 149,650 77.8%

Concerts 5 4,500 22,500 86.5%

Family Shows 10 3,500 35,000 67.3%

Other Sports 8 4,000 32,000 76.9%

Other Entertainment 8 3500 28000 67.3%

Trade & Consumer Shows / Day Rentals 12 n/a n/a n/a

TOTALS 80 267,150

46%

6%13%

10%

10%

15%

Event Summary

OHL tenant

Concerts

Family Shows

Other Sports


We have assumed that the Spectator Arena would annually attract five concerts, with these shows attracting some 4,500 fans per event (including floor seats). The Spectator Arena would be paid a combination of a percentage of ticket revenue plus a sharing in merchandise sales; for the purpose of this assessment, it is assumed that building rent would be based of a percentage of ticket revenue, or some $53,400 per year.

Family Shows

Similar to concerts, it is presumed that the Spectator Arena would be successful in securing a number of family shows, including circuses, “Dora”, the “Wiggles”, “Lord of the Dance”, “So You Think You Can Dance”, etc. We have assumed that ten such events would be held annually, with the arena paid a combination of a percentage of ticket revenue plus a sharing in merchandise sales; for the purpose of this assessment, it is assumed that building rent would be based of a percentage of ticket revenue, or some $58,200 per year.

Other Sports Events

It has similarly been assumed that the Spectator Arena would be successful in securing a number of non-OHL sporting events, including “Top Prospects Games”, exhibition games by Canada’s women’s hockey team, curling events (provincial championships or professional bonspiels), professional and amateur figure skating, exhibition basketball (including Harlem Globetrotters), lacrosse, etc. We have assumed that eight such events would be held annually, with the arena paid a combination of a percentage of ticket revenue plus a sharing in merchandise sales; for the purpose of this assessment, it is assumed that building rent would be based of a percentage of ticket revenue, or some $38,000 per year.

Other Entertainment

Finally, it has been assumed that the Spectator Arena would be successful in securing a number of other entertainment events, including “WWE Wrestling”, monster trucks, motocross, rodeos, etc. We have assumed that eight such events would be held annually, with the arena paid a combination of a percentage of ticket revenue plus a sharing in merchandise sales; for the purpose of this assessment, it is assumed that building rent would be based of a percentage of ticket revenue, or some $53,200 per year.

Trade & Consumer Shows / Single Day Facility Rentals

Lastly, it has been assumed that the Spectator Arena would be made available for multi-day rentals, including rentals for trade and consumer shows, for community events, religious and cultural gatherings, for corporate fundraisers, film shoots, etc. We have assumed that three, three-day trade and consumer shows (home & garden shows, bridal shows, outdoor shows, etc.) could be brought into the facility, and that there would be six single day events programmed into the arena. For the purpose of this assessment, it is assumed that building rent would be based on a flat fee and generate some $60,000 per year.

Event Summary

Figure 50, following, summarizes the projected event calendar for the new St. Catharines Spectator Arena against other OHL venues. As noted above, it is concluded that a new Spectator Arena in St. Catharines will be negatively impacted in its ability to attract concert events. In our opinion, it is likely that a new 5,300- to 5,600-capacity facility will annually be able to attract some 80 events / event days, including games played by the lead tenant. Total revenue from facility events is estimated at some $475,000 annually.


Figure 50 St. Catharines Spectator Arena – Calendar of Events

Notes: 1 Essar Centre event information is for the 12-month period ended December 21, 2008.

2. GM Centre event information is for the nine-month period ended September 30, 2009.

3. WFCU Centre event information is for the period March 2009 through January 2010.

Source: Deloitte, City of Windsor, Global Spectrum, City of Kingston, City of Sault Ste. Marie, City of Oshawa.

Other Revenue

Concessions / Food & Beverage

Revenues from food and beverage operations, including concessions, suite catering and in-house restaurants, are expected to flow from the sale of food, beverage and other goods at Spectator Arena events. Concession revenues are dependent upon the total number of visitors to the facility over the course of an operating year. Major facility tenants are assumed to share in this lucrative revenue source, and in this regard, we have assumed a 50 / 50 split of net revenues between the Arena and the lead tenant during OHL games; the facility is assumed to retain 100% of net revenues for all other events. Concession revenues are based on “per cap” spending of $7.50 for general admission, $10.00 for club seat holders, and $15.00 for luxury suites guests. On an overall basis, per cap spending is projected to average $7.85. All “per caps” are gross spending amounts, and compare with historical concession spending at Ice Dog games (which approximate $4.00 per person) and at other new OHL facilities which, as we understand it, range to $8.00 per person. Based on comparable facilities, we have estimated a 80% cost of goods / sales ratio to account for concession operating costs (including salaries) and food and beverage purchases. Costs associated with suite hosts / hostesses are carried as part of the operating expenses of this facility. In total, some $300,400 in net income is projected for the Arena, with approximately $113,300 accruing to the benefit of the lead tenant. In addition to food and beverage sales, it is also assumed that the Spectator Arena would benefit from the sale of merchandise. Based on industry average per caps of $1.50 and 10% of net sale proceeds accruing the arena, some $51,800 could be generated for the facility.

Suites License Revenue

The proposed Arena is assumed to include 24 luxury suites, including three “founders suites”, which would not be available for rent (i.e., these would be provided to the City, the Arena’s naming right’s holder, and the lead tenant). The remaining 21 suites are projected to generate substantial revenue through their yearly rental. Their annual license fee and projected take-up will be directly dependent upon the number of events that take place in the Facility. We have assumed an average annual per suite rental rate of $15,000. Prices quoted herein represent suite license fees only, and thus exclude ticket prices. Based on industry standards, our opinion is that two-thirds of these suites could be leased. Based on the pricing information of comparable suites similar type venues, we believe that our estimates of suite revenues are appropriate, and could generate some $178,500 annually.

K-Rock Centre Essar Centre GM Centre WFCU Centre St. Catharines

Kingston Sault Ste. Marie1 Oshawa2 Windsor3 Spectator Arena

Lead Tenant - OHL 37 43 20 47 37

Concerts 19 9 1 4 5

Family Shows 14 13 8 3 10

Other Sports 5 17 10 2 8

Other Entertainment 9 7 14 5 8

Trade & Consumer Shows 21 21 n/a 0 12

Total 105 110 53 61 80


Club Seats License Revenue

Club seats are reserved seating areas within an arena, generally providing the spectator with greater proximity / better sight lines to the playing surface, a location straddling / near centre ice or alternatively in an end zone over-looking the visitor’s net, admission into a restricted access lounge, in-seat food and beverage service and a higher quality seat. Revenues represent the fees captured to allow the purchaser to secure access to these seats to any event staged at the facility. We have forecast a price of $250 per club seat, with this fee representing the seat license fee only, and thus exclude ticket prices. Based on our analysis, we believe that approximately 200 seats could be occupied at these prices, yielding some $42,500 annually to the Facility.

Advertising

Advertising revenue will flow from the sale of signage in the concourses, on scoreboards, fascia or other locations inside and outside the arena, as well as other sponsorships (i.e., beverage exclusivity contracts) that may be negotiated. Advertising revenue will also vary depending on the arrangements made with the arena’s various tenants. We have estimated a number of streams of advertising revenue including in-stadium advertising, concourse advertising, main scoreboard, and various other sponsorships. In-stadium advertising includes both backlits and electronic positions located on balconies and other exposed walls within the arena’s seating area. Scoreboard advertising relates to revenue generated from various advertisements placed around the arena’s scoreboard(s) and on its digital displays. Dasherboard and on-ice logos represent advertisements placed on the rink boards and on various locations within the ice surface. Finally concourse advertising relates to the various signage positions within the arena’s concourses, including entrances into the seating area (including posters, back-lits and scrolling signage). In total, we have estimated advertising to total almost $660,000 per year, with this income subject to a “cost of sale” (equal to 15%) and sharing with the lead tenant (generally, advertising able to be seen by spectators while sitting in their seats accrue to the benefit of the team, while advertising in other areas of the arena are shared). In total, we forecast net revenue to the Arena of some $181,700 per year.

Naming Rights and Other Sponsorships

Naming rights are the right to name a piece of property, either tangible property or an event, usually granted in exchange for financial considerations. Institutions like schools, places of worship and hospitals have a tradition of granting donors the right to name facilities in exchange for contributions. Securing the naming rights for arenas, stadia, theaters, and other public gathering places is seen by companies as a form of advertising, and naming rights deals worth millions of dollars have been made. According to industry sources, companies / sectors which have traditionally sponsored sports facilities (including financial services, automotive, transportation, technology, energy and beer companies) are currently undergoing fundamental change which has forced them to reduce their marketing budgets. Compounding this are current economic concerns which have included a volatile stock market, major currency fluctuations, challenges within Ontario’s manufacturing and auto sectors, the Canadian and U.S. economic slowdown / recession, etc. According to Street & Smith’s SportsBusiness Journal, “the naming rights market tumbled well before the economic slowdown in the U.S.”. For those facilities which are currently seeking to attract naming sponsors, these sources further indicate that marketing representatives continue to meet with interested companies; however, the sales cycle is considerably longer and values will be tied more directly to “return on investment”. Previously “branding” used to be the prime motivation (i.e., being associated with the building, the facility’s tenants, etc.); increasingly, corporations are looking at the strategic value of being associated with a building / team, and how that relationship can help further the overall corporate direction of the company, particularly with respect to growing its business. Generally, the value which an entity will attach to a venue will be dependent upon two principal factors:

• the philanthropic / sense of belonging / linkage to the local community which the naming sponsor / benefactor has to the local area, community, facility etc.; and

• the marketing / strategic value of the facility to the entity’s business. Valuing naming rights associated with the latter are relatively straightforward, and will generally be a function of the “number of eyes” and “number of ears” who see / hear the name of the entity which


sponsored the facility. As such, the greater the number of times a venue is likely to be referenced, the higher the calibre of sport team(s) that plays within a building, and the larger the market those teams play within, the greater will be the value of that sponsorship. Alternatively, the former is more difficult to value, given that it plays on the emotional sensitivity on individuals. Figure 51, following, summarizes the total and annual naming right values of various Canadian sports stadiums and arenas. It should be noted that in certain instances, the values quoted include sponsorships of various properties, not solely the stadium. For example, the Bank of Montreal’s sponsorship of BMO Field includes the stadium itself along with TFC’s jersey, and certain other properties including the Air Canada Centre, the Toronto Maple Leafs and Toronto Raptors. As such, the $24.0 million sponsorship figure needs to be interpreted with caution (the allocation of this sponsorship to the building is $10.0 million, or $1.0 million per year). Of interest are the following:

• With the exception of the John Labatt Centre, most OHL arenas have sold naming rights for approximately $1.5 million to $2.0 million; recent naming rights transactions have ranged between $1.5 and $1.75 million over ten years ($150,000 to $175,000 per year);

• In most instances, naming rights are paid in equal annual installments; and

• Apart from major facilities housing preeminent professional teams, most facilities in Canada generate annual proceeds from naming rights of less than $500,000 per year.

Based on our review, we project that naming rights for a new Spectator Arena could be sold for approximately $1.5 million for a term of 10 years, payable to the facility in equal annual installments. Other sponsorships include beverage exclusivity contracts, or “pouring rights’” for the facility. Pouring rights can be sold to soft drink, alcoholic beverage and bottled water companies. In addition, “platinum” sponsorships can also be sold, which such sponsors being able to affix their logo to various building components or otherwise become associated with the facility. Based on industry practices, we believe that such additional sponsorships could provide an additional $50,000 to the Arena. In each instance, a 15% cost of sale / commission has been assumed, yielding net proceeds to the Spectator Arena from the sale of naming rights and other sponsorships of $170,000 per year.


Figure 51 Value of Naming Rights at Various Canadian Hockey League Arenas and other Stadia

Notes: 1. Total sponsorship provided by BMO is estimated at $24.0 million with this amount allocated to the Team, the Team's jerseys, the

stadium and other related properties. The assumed figure for the stadium is $10.0 million.

2. Figures are a combination of Canadian and US dollars (most CHL arenas are listed in Canadian dollars)

Source: Street & Smith’s Sports Business Journal, Deloitte.

Ticket Surcharge

A ticket surcharge of $1.00, added to the price of each ticket, has been assumed. This revenue has been generated by many other comparable facilities, including the WFCE Centre in Windsor, and is generally collected to fund a capital reserve account to “preserve the long-term maintenance and improvement of the arena”. In calculating the amount of this surcharge, we have assumed that all event attendees (whether paid or having received complimentary tickets), would be assessed this levy. In total, some $267,200 is estimated to be collected.

Box Office Rebates

Most facilities charge a “convenience fee” for ordering tickets. Based on comparable information, it is assumed that some $61,700 could be generated from this source.

BUILDING NAME CITY NAMING RIGHTS SOLD TO PRICE TERMAVG. ANNUAL

VALUETENANT(S) Expiration

Canadian Hockey League Arenas

John Labatt Centre London Labatt Breweries $3,500,000 10 $350,000 London Knights 2012

Hershey Centre Mississauga Hershey Food Corp $1,900,000 10 $190,000 St. Michael's Majors 2007

WFCU Centre Windsor Windsor Family Credit Union $1,750,000 10 $175,000 Windsor Spitfires 2018

K-Rock Centre Kingston K-Rock FM $1,700,000 10 $170,000 Kingston Frontenacs 2017

General Motors Centre Oshawa General Motors of Canada $1,650,000 10 $165,000 Oshawa Generals 2016

Essar Centre Sault Ste. Marie Essar Steel Algoma Inc. $1,500,000 10 $150,000 Soo Greyhounds 2018

Sleeman Centre Guelph Sleeman Breweries $1,100,000 13 $84,615 Guelph Storm 2020

Powerade Centre Brampton Coca-Cola Canada n/a 10 n/a Brampton Battalion 2015

Urbandale Centre Ottawa Urbandale Construction n/a 1 n/a Ottawa 67's 2010

Credit Union Centre Saskatoon Saskatoon Credit Union, et. al. $1,600,000 10 $160,000 Saskatoon Blades 2013

Interior Savings Centre Kamloops Interior Savings $1,060,000 10 $106,000 Kamloops Blazers 2015

Colisee Pepsi Quebec City PepsiCo. $985,545 10 $98,555 Quebec Ramparts 2009

Mile One Stadium St. John's n/a $634,115 10 $63,412 former St. John's Fog Devils 2010

Enmax Centrum Red Deer Enmax Corp. n/a 6 n/a Red Deer Rebels 2008

Prospera Place Chilliwack Prospera n/a 10 n/a Chilliwack Chiefs 2014

American Hockey League / Other Minor League Hockey Arenas

MTS Centre Winnipeg Manitoba Telecom Services $5,900,000 10 $590,000 Manitoba Moose 2015

Ricoh Coliseum Toronto Ricoh Corporation $4,800,000 10 $480,000 Toronto Marlies 2013

Save-on-Foods Memorial

CentreVictoria Save-on-Foods $1,000,000 10 $100,000 Victoria Salmon Kings 2014

National Hockey League Arenas

Bell Centre Montreal BCE Inc. $63,940,000 20 $3,197,000 Montreal Canadiens 2023

Air Canada Centre Toronto ACE Aviation Holdings Inc. $30,397,191 20 $1,519,860 Toronto Maple Leafs, Toronto

Raptors, Toronto Rock2019

Pengrowth Saddledome Calgary Pengrowth Management Ltd. $20,000,000 20 $1,000,000 Calgary Flames, Calgary

Roughnecks, Calgary Hitmen2016

Scotiabank Place Ottawa Scotiabank $17,562,821 20 $878,141 Ottawa Senators 2016

General Motors Place Vancouver General Motors Corp. $16,887,328 20 $844,366 Vancouver Canucks 2015

Rexall Place Edmonton Katz Group Inc. n/a 10 n/a Edmonton Oilers 2013

Other Professional Sport Stadiums

BMO Field Toronto Bank of Montreal $24,000,000 10 $2,400,000 Toronto Football Club 2016

Rogers Centre Toronto Rogers Communications $18,000,000 10 $1,800,000 Toronto Blue Jays, Toronto

Argonauts2014

Saputo Stadium Montreal Saputo $7,000,000 n/a n/a USL Montreal Impact n/a

Mosaic Stadium at Taylor

FieldRegina The Mosaic Co. $3,567,000 10 $356,700

Saskatchewan Roughriders /

U of Regina2015

Canad Inns Stadium Winnipeg Canad Corp. of Manitoba $1,750,000 10 $175,000 Winnipeg Blue Bombers 2010

Telus Field Edmonton Telus Corp. $1,200,000 10 $120,000 Edmonton Cracker Jacks 2009

CanWest Global Park Winnipeg CanWest Global

Communications$1,100,000 25 $44,000 Winnipeg Goldeyes 2023

Rexall Centre Toronto Katz Group Canada n/a n/a n/a ATP Tennis Masters n/a


Ice Rentals

As noted above, it is assumed that the Arena would be available for use by minor and youth organizations on a regular basis throughout the winter season (approximately September 1 through April 30), including minor hockey (boys and girls), adult hockey, the St. Catharines Junior B Falcons, etc. It is also assumed that the ice would be removed between May 1 and July 31, during which time the Arena could be utilized for a broad range of floor events. During August, it is presumed that the ice would be reinstalled and that the Arena would be used for various hockey camps, training camps and other ice uses. Assuming ice utilization rates approximating 67% of available prime time hours (at $200 per hour) and 20% of available non-prime time hours (at $125 per hour), some $208,500 in total ice rental revenue could be generated.

Gross Operating Revenue

Based on the foregoing, gross operating revenue for a 5,200-seat (5,450-capacity) Spectator Arena in St. Catharines is estimated at some $1.937 million. At this level of projected operating revenue, the Spectator Arena compares favourably to the Essar Centre; however it is projected to have lower revenue compared t both Windsor (whose revenue total includes income generated from the operation of three community ice pads) and Kingston (whose event and market profile is concluded to be stronger than St. Catharines). Figure 52 St. Catharines Spectator Arena – Gross Operating Revenue

Notes: 1 Essar Centre event information is for the 12-month period ended December 21, 2008.

2. WFCU Centre financial information includes operating revenue from three community ice

facilities.

Source: Deloitte, City of Windsor, City of Kingston, City of Sault Ste. Marie.

Operating Expenses

Expenses have been divided into the following categories for comparison with operating information from other facilities, including personnel costs, operations and maintenance, marketing, utilities, insurance, and other. Operating expense assumptions are primarily derived from operating pro-forma estimates from comparable facilities. Costs associated with a special events (including security and electrical and mechanical set-up / tear-down) are assumed to be reimbursed by the event sponsor.

Personnel Costs

Personnel costs will be incurred in all aspects of arena operations including arena management, administration, facility operations, marketing and maintenance. With the exception of certain specific event costs, which are assumed to be charged back to the arena user or allocated as part of the

Year 1

FACILITY REVENUES

Lead Tenant (OHL Team) 211,800$

Other Events 262,800

Net Concession Revenue and Novelties 300,400

Net Merchandise Revenue 51,800

Net Advertising 181,700

Sponsorships 170,000

Suites License Revenue 178,500

Club Seats License Revenue 42,500

Ticket Surcharge 267,200

Box Office Revenue 61,700

Ice Rental Revenue 208,500

Total Revenues 1,936,900$

COMPARATIVE FACILITIES

WFCU Centre, Windsor 3,074,524

Essar Centre, Sault Ste. Marie 1,895,482

K-Rock Centre, Kingston 2,457,565


“Operations, Maintenance and Repairs” budget, this category is inclusive of all personnel employed by the Arena. A total staff compliment of some 40 individuals (comprising approximately 25 FTE’s) is assumed, with these individuals comprising the following positions:

• General manager; • Administrative assistant; • Finance Manager; • Marketing Coordinator; • Marketing Assistant; • Event Services Manager; • Director of Operations / Lead Hand; • Facility Maintenance Crew; • Facility Maintenance Crew / Event Operations support (part-time); • Box Office Manager; • Event Services Manager; • Customer Service Representatives / Booking Agents (part-time); and • Suite Hosts / Hostesses / Guest Services personnel (part-time).

Based on the foregoing, we estimate total Arena personnel costs to be some $920,000 per year, including benefits. This compares to costs incurred at facilities like the K-Rock Centre ($775,000 in 2009) and Essar Centre ($600,000 in 2008).

Utilities

Utility Costs encompass all costs related to heating, electricity, gas, water / sewer, etc. These costs are primarily driven by the amount of enclosed space within the arena, facility usage, as well as the energy efficiency of the building. We believe that utility costs will represent a significant annual operating expense given the need to light the arena during events, refrigerate the building and keep the ice at an acceptable temperature, and operate the scoreboard. Also, as utility prices continue to increase, this operating expense will become more significant in future years. Based on the comparable facility benchmarks, we have estimated utility costs to be $520,000 per year. This estimate compares to current costs at the K-Rock Centre (approximately $460,000 in 2009) and at the Essar Centre ($365,000 in 2008).

Operations, Maintenance, Repairs

Operations, maintenance and repair costs include various materials, equipment and services needed for the daily operation and upkeep of the arena. Potential costs include supplies, equipment, plumbing and electrical services, security, etc. Event costs, including staffing, are assumed to be passed back to facility users and tenants. These costs will be primarily driven by building usage and visits, with supplies, equipment and various service contracts required to upkeep and run the arena representing the majority of these costs. Based on our comparable facility benchmarks, we estimate building operations and maintenance to approximate $180,000 per year.

Marketing

The projected marketing budget is assumed to cover all costs associated with attracting events to the arena, and to secure advertising and other sources of revenue. We have allocated $75,000 to cover out-of-pocket marketing expenses including memberships, travel, advertising and promotions and other expenses related to marketing the arena and attracting events. Marketing salaries have been accounted for in the projection of Personnel Costs, above.

Insurance

Insurance costs are allocated to cover building and liability insurance. A benchmark value for insurance was not easily determinable from operating statements of comparable facilities based on the fact that some of these arenas are generally included in the insurance coverage purchased by the municipality. For the purpose of this assessment, it is assumed that additional insurance costs could approximate $60,000 per year.


Other Miscellaneous Expenses

The value for “Other Miscellaneous Expenses” of $210,000 was deemed reasonable through comparisons with various other arenas. This expense category is a reserve for those expenses not accounted for elsewhere, as well as those unforeseen expenses that are inevitably incurred during the Facility’s operations. Sample miscellaneous costs include travel, training, staff uniforms (normally required twice yearly), office expenses, activity expenses, box office expenses.

Capital Reserve

A Capital Reserve allowance has been estimated, using practice adopted in other arena facilities, and is based on a yearly allocation of $150,000, and subject to annual inflation of 3%. Capital reserve represents a sinking fund set up to account for future capital improvements or repairs.

Management Fee

Finally, a Management Fee of $150,000 has been assumed. This management fee is to be paid to a professional facility management organization / company responsible for the management of Facility on behalf of the owners. This fee compares to the $128,000 paid to the operators of the K-Rock Centre in Kingston in 2009.

Gross Operating Expense

Based on the foregoing, gross operating expenses for a 5,200-seat (5,450-capacity) Spectator Arena in St. Catharines are estimated at some $2.265 million. At this level of projected operating expense (projected to 2012), the proposed St. Catharines Spectator Arena compares with that incurred by both the K-Rock Centre and Essar Centre (with these facilities generating significantly more events); however it is projected to have lower operating expenses compared to Windsor (whose operations include expenses incurred in the operation of three community ice pads). Figure 53 St. Catharines Spectator Arena – Operating Expenses

Notes: 1 Essar Centre event information is for the 12-month period ended December 21, 2008 and

does not pay management fees to a third party facility manager.

2. WFCU Centre financial information includes operating revenue from three community ice

facilities.

Source: Deloitte, City of Windsor, City of Kingston, City of Sault Ste. Marie.

Summary of Operations

Figure 54, following, provides a summary of the expected cash flow for a new 5,200-seat (5,450-person capacity) Spectator Arena in St. Catharines. As noted below, arena revenues are projected to be almost $1.937 million in Year 1, growing to over $2.131 million by Year 5. Operating expenses, prior to capital reserves and management fees, are estimated at almost $1.965 million in Year 1, yielding a net operating

Year 1

FACILITY EXPENSES

Personnel Costs 920,000$

Utilities 520,000

Operations, Maintenance, Repairs 180,000

Marketing 75,000

Insurance 60,000

Other Misc Expenses 210,000

Capital Reserve 150,000

Management Fee 150,000

Total Expenses 2,265,000$

COMPARATIVE FACILITIES

WFCU Centre, Windsor 3,086,638

Essar Centre, Sault Ste. Marie 2,164,346

K-Rock Centre, Kingston 1,848,951


loss of approximately $28,000. Including capital reserves and management fees, the Spectator Facility is projected to realize a net operating loss of approximately $328,000. Throughout the duration of the forecast period, the arena is projected to realize an operating loss, increasing to a projected $464,000 by Year 5. Figure 54 Projected Operations – 5,200-seat Spectator Arena

Source: Deloitte

Project Financing Assessment

As outlined above, the City currently provides an operating subsidy to the Gatorade Garden City Complex, with this annual support estimated to have been approximately $1.0 million in 2009. Assuming the City would decommission this facility upon the opening of the Spectator Arena, it follows that the City could then free-up this annual support and allocate it to the new Facility. Figure 55, following, models the impact of a $1.0 million annual contribution by the City. As noted, the Facility’s net operations are projected to improve to some $670,000 in Year 1, before gradually declining to approximately $535,000 by Year 5. Assuming the City were able to capitalize the net cash flow projected for Year 1 (and further that the City would agree to annually increase this level of operating support to keep net operating income at $670,000), it is projected that the Facility would be able to support some $8.1 million in cash-flow supported debt (assuming a 6.00%, 20-year debenture). As such, the “Net Funding Gap” for realizing a new 5,200-seat (5,450-capacity) Spectator Arena is estimated at $36.9 million (Figure 56, following). Opportunities for closing the “Funding Gap” include:

• obtaining project funding from senior government sources, including P3 Canada (who will, in the near future, be commencing “Round 2” of its “P3 Canada Fund”, a program which may be able to fund 25% of the capital cost a project, or in this instance some $11.25 million);

• securing contributions from prospective facility sponsors and the lead tenant (as noted, we understand that the Windsor Spitfires paid for the scoreboard in the WFCU Centre, while a facility sponsor paid to upgrade the facility’s sound system);

• identifying and selling surplus property(ies) within the City’s real estate inventory to raise capital; and

Year 1 Year 2 Year 3 Year 4 Year 5

FACILITY REVENUES

Lead Tenant (OHL Team) 211,800$ 218,200$ 224,700$ 231,400$ 238,300$

Other Events 262,800 270,700 278,800 287,200 295,800

Net Concession Revenue and Novelties 300,400 309,400 318,700 328,300 338,100

Net Merchandise Revenue 51,800 53,400 55,000 56,700 58,400

Net Advertising 181,700 187,200 192,800 198,600 204,600

Sponsorships 170,000 170,000 170,000 170,000 170,000

Suites License Revenue 178,500 178,500 178,500 178,500 178,500

Club Seats License Revenue 42,500 42,500 42,500 42,500 42,500

Ticket Surcharge 267,200 275,200 283,500 292,000 300,800

Box Office Revenue 61,700 63,600 65,500 67,500 69,500

Ice Rental Revenue 208,500 214,800 221,200 227,800 234,600

Total Revenues 1,936,900$ 1,983,500$ 2,031,200$ 2,080,500$ 2,131,100$

FACILITY EXPENSES

Personnel Costs 920,000$ 947,600$ 976,000$ 1,005,300$ 1,035,500$

Utilities 520,000 540,800 562,400 584,900 608,300

Operations, Maintenance, Repairs 180,000 187,200 194,700 202,500 210,600

Marketing 75,000 78,000 81,100 84,300 87,700

Insurance 60,000 62,400 64,900 67,500 70,200

Other Misc Expenses 210,000 218,400 227,100 236,200 245,600

Total Expenses 1,965,000$ 2,034,400$ 2,106,200$ 2,180,700$ 2,257,900$

Net Cash Flow Before Capital Reserves / Management Fees (28,100)$ (50,900)$ (75,000)$ (100,200)$ (126,800)$

Capital Reserve 150,000$ 154,500$ 159,100$ 163,900$ 168,800$

Management Fee 150,000 154,500 159,100 163,900 168,800

NET CASH FLOW (328,100)$ (359,900)$ (393,200)$ (428,000)$ (464,400)$


• expanding the scale / scope of the project to include other elements which could either (a) entice additional private sector investment, (b) enhance project cash flow such that additional project-related debt could be supported, and / or (c) free-up operating cash flow from other municipal facilities / departments (evaluating the implications of such a strategy are outside the scope of this assessment).

Figure 55 5,200-seat Spectator Arena – Projected Debt

Source: Deloitte

Figure 56 5,200-seat Spectator Arena – Capital Structure

Source: Deloitte


Total Revenues 1,936,900$ 1,983,500$ 2,031,200$ 2,080,500$ 2,131,100$

Total Expenses (incl. mgmt fees and reserves) 1,965,000$ 2,034,400$ 2,106,200$ 2,180,700$ 2,257,900$

NET CASH FLOW (328,100)$ (359,900)$ (393,200)$ (428,000)$ (464,400)$

Transfer of Operating Support (from Gatorade Garden City Complex) 1,000,000$ 1,000,000$ 1,000,000$ 1,000,000$ 1,000,000$

Net Financial Position after Operating Transfers 671,900$ 640,100$ 606,800$ 572,000$ 535,600$

CAPITALIZED AMOUNT 8,100,000$

Projected Capital Cost $45.0 million

Project Supported Debt $8.1 million

Funding Gap $36.9 million

Update

Economic Life

For purposes of this report we have assumed an economic or effective life of the spectator facility to be twenty years. Generally economic life is defined as the period over which an asset is expected to be usable, with normal repairs and maintenance for the purpose it was acquired or constructed.

Though the building itself may have an effective life longer than 20 years it is anticipated that to extend the economic life of the building a significant investment would have to be made in the building to extend the assumed life.

Additionally the building may have a service life longer than 20 years however in a diminished capacity. An example of this is that as the building ages and other facilities enter the market the building becomes less attractive for hosting concerts and other events and the building becomes primarily used as a general recreation facility.

We have included projections for 20 years in Appendix B of this report.


8. Economic Benefits

Background

Economic impacts are generally defined as changes to an economy as a result of a development, undertaking or activity. As such, economic impacts measure changes in the size and structure of a jurisdiction’s economy when goods and services are purchased using money generated from outside a region, or as the result of an infusion of capital for the construction of a new facility or service. Almost all activities can generate economic impact; however in its strictest sense, activities and expenditures which result in “new” spending are the types of activities which local officials most greatly desire. In evaluating and quantifying the economic impact of a facility, service, program offering, etc., four types of impacts are typically reviewed:

• Direct Economic Impacts: the total expenditures on goods and services, including wages and salaries, for the construction of a proposed development, the operations of a facility or service, the staging of an event, etc.

• Indirect Economic Impacts: refer to the purchase of goods and services needed to then produce the goods and services that are directly purchased in support of the construction of the proposed facility, the operation of that facility or service, the staging of the event, etc. Indirect impacts therefore measure the magnitude of interactions with other businesses which supply the necessary materials and services, which lead to indirect demand for goods and services from other industries.

• Induced Impact: refer to the impact of personal expenditures by people who have been paid wages and salaries for the construction or in the operations of the facility or service, the staging of the event, etc., as well as for the production of indirect goods and services.

• Associated Economic Impacts: refers to the spin-off impacts generated by the construction of the facility, the operations of the facility or service, the staging of the event, etc., including spending by visitors and tourists. For example, the spending by non-residents could be considered an associated impact.

In quantifying the economic impact of a facility, event or service, four types of impact are generally quantified:

• Spending Impact: commonly referred to as GDP impact, it measures the impacts resulting from the purchase of goods and services;

• Employment Impacts: the increases in employment resulting from the purchase of goods and services;

• Income Impacts: the increases in personal income resulting from increases in employment; and

• Tax Impact: the amount of tax revenue government agencies could be inferred to generate from the construction of a facility, the operations of a facility or event, consumer spending, new employment income, etc. (inclusive of property taxes, income taxes, sales taxes, etc.).

In an attempt to assess the economic impacts associated with the construction and operation of the Spectator Arena, Deloitte utilized its economic impact model for Ontario. In preparing this assessment, the following assumptions / data inputs were utilized:

• Spectator Arena development costs were estimated at $45.0 million;

• Operating costs for the Spectator Arena were based on the proforma cash flow statements included in Section 7 of this Report; and

• Statistics Canada Input-Output multipliers for 2003 were utilized to quantify the various economic impacts associated with the construction and operation of the Project.


Construction Impacts

Spending Impact

As noted above, the assumed cost of the 5,200-seat (5,450-capacity) Spectator Arena is projected to cost in the range of $45.0 million, including hard construction costs, soft costs (fees paid to architects, project management, etc.), building fit-out (furniture, fixtures and equipment, “FF&E”), project indirects and contingencies. Excluded from this total are costs associated with land acquisition and extraordinary site preparation (whether geotechnical or demolition costs). The construction of the Spectator Arena will generate a number of economic impacts, ranging from direct construction employment, GDP impacts both locally (where goods are secured from local vendors) and abroad, as well as tax revenue impacts to government (sales taxes associated with the purchase of goods and services, as well as income tax from the wages paid to the various construction employees and service providers). Labour costs associated with each major expense item were then estimated and Statistics Canada Input-Output multipliers were utilized to identify the indirect impacts associated with these various expenditures. Based on this review, the Total Development Impact, including indirect economic impacts of construction, consulting, FF&E purchases and pre-opening expenses is estimated at more than $64.3 million. Figure 57 Direct and Indirect Spending Impacts – St. Catharines Spectator Arena

Source: Deloitte

Employment Income Impact

In developing the Spectator Arena, it is estimated that the various construction workers, consultants and other advisors involved in pre-opening activities will be paid approximately $23.5 million in total salaries and wages. Utilizing Input-Output multipliers obtained from Statistics Canada to identify the indirect impact, the Total Income Impact is estimated at more than $34.0 million, including indirect impacts from workers employed to produce the goods and services needed to construct the Spectator Arena. Figure 58 Direct and Indirect Employment Income Impacts – St. Catharines Spectator Arena

Source: Deloitte

Employment Impact

Utilizing total employment multipliers from Statistics Canada, it is concluded that the construction of the St. Catharines Spectator Arena could directly generate 405 person years of direct employment and give rise to a Total Employment Impact of 485 person years of employment (the reader should note that “person years of employment” does not necessarily translate directly into the “number of jobs created”, as a number of part-time positions could result; when added together, these part-time positions combine to make the equivalent of one full year of employment for one person).

St. Catharines Spectator Arena - Construction

Expenditures on Buildings, Land and Site Services $43,550,000

Indirect Spending $20,798,200

Total Expenditures Attributable to Construction $64,348,200


Direct Income $23,475,000

Indirect Income $10,541,400

Total Income $34,016,400


Figure 59 Direct and Indirect Employment Impacts – St. Catharines Spectator Arena

Source: Deloitte

Tax Impacts

The construction of the Spectator Arena is projected to generate significant revenue to each level of government, including provincial sales taxes generated from the purchase of goods used to construct the facility, and federal and provincial income taxes paid to workers retained to physically construct the venue. Municipal revenues, including building permit revenues and other development charges have not been estimated as part of this analysis. Overall, the construction of the Spectator Arena is estimated to generate some $3.5 million in federal and $3.9 million in provincial taxes. In total, almost $7.5 million in federal and provincial tax revenue is projected to be generated. Figure 60 Direct Tax Impacts – St. Catharines Spectator Arena

Source: Deloitte

Operational Impacts

Spending Impact

Once the Spectator Arena has been constructed, its operations are similarly projected to give rise to a series of economic impacts. As summarized in Figure 54, above, it is projected that a 5,200-seat (5,450-capacity) Spectator Arena would incur total operating expenses in its initial year of operations of approximately $2.265 million, comprised of $1.965 million in direct operating expenditures, $0.15 million in capital repairs, and $0.15 million in project management fees. In addition, food and beverage / concession operations are projected to give rise to an additional $1.655 million in total expenditures. This range of direct expenditure will give rise to a series of indirect impacts, including spending and employment impacts generated as a result of the Spectator Arena’s purchases. For example, the Arena’s purchase of materials and supplies from local distributors / merchants would require those store owner’s / supplier’s to purchase goods and services (and employ workers) in order to produce / obtain the materials needed to fill the Arena’s order. Utilizing input-output multipliers generated by Statistics Canada for Ontario for various expenditure categories, it is estimated that the Spectator Arena’s annual value-added impact (direct plus indirect impacts only) resulting from its annual expenditure of $3.92 million will approximate almost $5.85 million annually. Figure 61 Direct and Indirect Spending Impacts – St. Catharines Spectator Arena

Source: Deloitte


Direct Jobs 405

Indirect Jobs Created 80

Total Jobs Attributable to Capital Expenditures 485


Federal $3,541,800

Provincial $3,945,300

Municipal $0

Total $7,487,100

St. Catharines Spectator Arena - Operations

Direct Spending $3,920,000

Indirect Spending $1,928,800

Total Expenditures Attributable to Construction $5,848,800


Employment Income Impact

Income impacts measure the total earned salaries and wages generated in the broader economy as a result of an increase in employment. As noted below, the direct employment impact of the Spectator Arena is estimated at some 25 person years of employment, with these individuals being paid some $0.92 million in annual salaries and wages. In addition, a number of workers will be paid salaries and wages associated with the sale of concessions at the Arena. Utilizing similar input-output multipliers published by Statistics Canada for Ontario, it is estimated that the annual employment income impact (direct plus indirect impacts only) of the Spectator Arena will approximate $2.40 million annually. Figure 62 Direct and Indirect Employment Income Impacts – St. Catharines Spectator Arena

Source: Deloitte

Employment Impact

The direct spending and employment supported by the Spectator Arena is estimated to directly sustain approximately 25 person years of employment (i.e., full-time equivalents); this total excludes food and beverage / concessions workers. This direct spending and employment is concluded to give rise to increases in employment as a direct result of the purchase of goods and services. Based on Statistics Canada Input-Output multipliers, it is estimated that an additional 55 person years of employment will be indirectly supported by the Arena, yielding a total employment impact of approximately 80 jobs. Figure 63 Direct and Indirect Employment Impacts – St. Catharines Spectator Arena

Source: Deloitte

Tax Impacts

The operations of the Spectator Arena is projected to generate significant revenue to each senior level of government, including federal and provincial sales taxes generated from the sale of concessions and event tickets, in addition to federal and provincial income taxes paid to workers. The City of St. Catharines is not projected to generate any direct revenue from the operations of the Arena (as it has been assumed that the Arena would be declared a Municipal Capital Facility in order to exempt the facility from property taxes). Overall, the operations of the Spectator Arena are estimated to generate some $1.37 million annually for the federal government and more than $1.52 million in annual revenue for the Province of Ontario. Figure 64 Direct Tax Impacts – St. Catharines Spectator Arena

Source: Deloitte


Direct Income $1,478,200

Indirect Income $920,500

Total Income $2,398,700


Direct Jobs 25

Indirect Jobs Created 55

Total Income 80


Federal $1,371,200

Provincial $1,521,200

Municipal $0

Total $2,892,400


Associated Impacts

In addition to the above presented economic benefits directly associated with the Spectator Arena, a number of social and other benefits can be expected to accrue from the siting and operation of this Facility. These associated benefits include:

• Economic benefits associated with hosting an OHL Team; • Economic development benefits; • Event hosting benefits; and • Incremental investment.

Benefits of an OHL Team

Hosting an Ontario Hockey League team can generally be concluded to impart a number of positive benefits on a community. These benefits may include the following:

• An OHL hockey team is an approximate $2.5+ million dollar community business. The hockey club purchases goods and services from local businesses and directly employs a number of individuals (in club administration, marketing, etc.). The hockey club also indirectly employs / supports the employment of many part-time individuals including individuals employed at the team’s arena (concession staff, security, ticket takers, ushers, etc.). Because the majority of players who comprise the team are billeted, many local families are also provided with supplemental income.

• Because of the nature of their operations, OHL teams bring in new people to the community including individual players, players’ families (periodically during the season), scouts, television crews, etc. The attraction of such people can generate increased demand for room nights and increased spending at local restaurants and shops.

• Hosting an OHL team also generates “brand name” marketing exposure for the local community. During the hockey season, the name “St. Catharines” will be included within various news media throughout Canada and parts of the United States, with a minimum of 68 regular season games being “advertised” throughout the season. Frequently, articles on the Niagara Ice Dogs and therefore the City of St. Catharines are included in newspapers, including newspapers in the hometowns of competing teams and in national sporting magazines. Individuals are also exposed to the City of St. Catharines through the numerous sports highlight shows on local television news programs and on specialty cable channels.

Viewers of these media are exposed or introduced to St. Catharines, and as a result, their awareness of St. Catharines as a prospective tourist destination / sports entertainment area and a potential business location (and hence as a “major league city”) is increased. These advertisements for St. Catharines therefore provide name recognition benefits which could go far beyond what could be accomplished through the more limited budgets of government marketing / economic development agencies like the City’s economic development department. This name recognition results in many individuals being exposed to “St. Catharines” on a regular basis, and potentially results in more people visiting the region than would have otherwise been the case if St. Catharines did not have a team (because their exposure to St. Catharines would not be as great or as regular as would otherwise be the case).

• Finally, teams tend to be actively involved in the local community and in particular with various community outreach programs, especially youth-oriented programs. The economic value of such community out-reach is, in some instances, considerable.

Economic Development Benefits

A spectator arena facility can also be positioned as part of the “quality of life” package that economic development and marketing officials use to attract new business and which companies use to lure young, well educated workers to the area. It is generally perceived that entertainment and access to higher quality entertainment, as part of overall “quality of life amenities”, are considered important locational considerations for expanding and / or relocating companies (the foregoing is not to say that such a facility, or an OHL team are, by themselves, critical elements without which the economic development of the St. Catharines / Niagara region would be severely constrained; rather, each of these entities comprise pieces to the overall corporate amenity infrastructure that enhance the ability of St. Catharines to effectively market and sell itself as a location for business).


Event Hosting Benefits

A spectator facility would comprise a larger capacity, high-quality entertainment venue for the St. Catharines area which can be used to attract other sporting events, concerts, family shows and various corporate events to the City. The staging of such events can result in considerable spending taking place within the local community, as such events regularly require the use of local trades, and purchase goods and services from local entities; similarly event crews and attendees will converge on the city and potentially result in additional spending (at hotels, restaurants, etc.).

Incremental Investment Benefits

Spectator arena facilities have been used as catalysts for additional entertainment-related economic development including new restaurants, retail, hotels and ancillary development for existing business. While numerous studies have attempted to document or disprove the relationship between the ability of sports and entertainment facilities to positively influence development, it is worth noting that many new stadia and arenas are increasingly being developed as integrated commercial developments in order to capitalize on the ability of these facilities to attract large crowds. Examples cited which support the notion of the positive correlation between sports facilities and commercial development include Ottawa (ScotiaBank Place) and London (John Labatt Centre) Ontario, Grand Rapids Michigan and Scranton Wilkes-Barre Pennsylvania, to name only a few. However, the ability of any investment in public infrastructure or in a sports facility to positively influence growth (as opposed to directly cause growth to occur), must be viewed in combination with the growth policies of the local municipality, the availability of adequate transportation infrastructure and general market forces.

Summary

A number of positive economic benefits are generally presumed to accrue within the City of St. Catharines and Niagara Region as a result of constructing and operating a 5,200-seat / 5,450-capacity Spectator Arena. These impacts include:

During Construction

• $64.3 million in direct and indirect spending; • $34.0 million in employment income growth; • 485 person years of employment; and • $7.5 million in direct tax revenue to the federal and provincial governments.

During Operation

• $5.8 million annually in direct and indirect spending; • $2.4 million annually in employment income growth; • 80 person years of employment annually; and • $2.9 million annually in direct tax revenue to the federal and provincial governments.

Figure 65 Summary of Projected One Time and Annual Impacts – St. Catharines Spectator Arena

Source: Deloitte

Economic Impact

ONE-TIME IMPACTS

Spending $64.3 million

Employment Income $34.0 million

Jobs 485 FTE

Taxes $7.5 million

ANNUAL IMPACTS



Jobs 80 FTE

Taxes $2.9 million

5-YEAR CUMULATIVE IMPACT, INCLUDING CONSTRUCTION



Jobs 885 FTE

Taxes $22.7 million


Over the first five years of operation, including construction, the St. Catharines Spectator Arena is projected to impact significant economic benefits on the community / region, including:


The above noted quantitative impacts would be in addition to the numerous associated / qualitative impacts which the presence of such a building could be expected to impart, including

• Quantitative and qualitative benefits associated with hosting an OHL Team; • Economic development benefits; • Event hosting; and • Incremental investment.


9. Risk Assessment

Per the requirements of the City’s RFP, the attached “Risk Allocation Matrix” was prepared (see Figure 66, following). For the purpose of completing this table, the following assumptions have been utilized:

• In generating a projected net operating loss of approximately $28,000 in its first year, a 5,200-seat / 5,450-capacity Spectator Arena is not projected to be able to support third party financing. As such, 100% of the cost of realizing the facility is assumed to come from the City of St. Catharines, whether from a traditional debenture obligation, or through a combination of operating transfers from other City budget accounts (including the current operating subsidy directed towards the Gatorade Garden City Complex), other operating guarantees, or through revenues directed toward the Project from other sources (including from the sale of surplus real estate assets).

• Because of the inability of the Spectator Arena to be able to support any level of third party debt or equity, it is likely that the overall delivery of the Spectator Arena will need to be undertaken in a manner similar to that pursued by the cities of Kingston, Oshawa, Mississauga, Windsor and Sault Ste. Marie. In each instance, the 5,000+-seat spectator arena developed by these communities was undertaken exclusively by the municipality; with the exception of Sault Ste. Marie, the cities of Kingston, Oshawa and Windsor also retained the services of a third party operator to assist it in successfully positioning the facility within the market.

• As such, it is recommended that the City retain a third party operator to maximize the ability of the Spectator Arena to attract entertainment and other events. In retaining this firm, it is further recommended that the management agreement contain incentive clauses (tied to the net financial performance of the building and the number of entertainment events they are able to schedule into the facility), and thereby limit, to the greatest extent possible, programming and demand risk while operating the facility (it should be noted, however, that this risk cannot be eliminated or transferred).

• In designing the Facility, it is advisable that the third party operator be on hand in an advisory capacity to ensure that the Spectator Arena contains all necessary features (and at an appropriate level of finish and design quality) for it to function properly and generate maximum revenue.

• Finally, given that the operations of the Spectator Arena are not projected to generate sufficient operating income to cover operating expenses (including major maintenance and management fees, all operating risk, regular and major maintenance, life cycle repairs and allowances, etc.), it is concluded that 100% of such risks will need to be retained by the Government in order for the project to go forward. Such risks can, however, be minimized through the retention of a third party operator, tasked and incented to operate, maintain and program the Spectator Arena for a fee (transferring risk of such items to the third party operator will, however, be difficult).


Figure 66 St. Catharines Spectator Arena – Risk Allocation Matrix

Source: Deloitte


10. Conclusions and Recommendations

Summary

Purpose

Deloitte was retained by the City of St. Catharines to evaluate the feasibility of the private sector designing, constructing, financing, marketing, operating and maintaining a 5,000+ seat Spectator Arena on a municipally-owned site within the downtown core of the City.

Market Assessment

The City of St. Catharines, with a local population of more than 130,000 people and a regional trading area exceeding 400,000 people, is the largest community and is a regionally-dominant centre in Niagara Region. While traditional manufacturing have played an integral role in St. Catharines development, health and bioscience, green industry, interactive media and tourism have been identified as being key to driving future economic growth in the St. Catharines area. After experiencing three consecutive years of economic decline, it is projected that the regional economy will grow by 2.4% in 2010 and by an average annual rate of 3.1% between 2011 and 2014.

Market Assessment

The St. Catharines market is projected to be able to support OHL attendance in the range of 4,225 fans per game playing within a new multi-purpose spectator event facility similar to buildings recently constructed in Sault Ste. Marie, Windsor, Oshawa and Kingston. Assuming a “target” capacity figure of 75% and 80%, a building in the range of 5,300 to 5,600 seats (including standing room) would appear to be appropriate. In estimating the potential cost of building a new 5,300 to 5,600-seat Spectator Facility in St. Catharines, consideration was given to recently constructed facilities in Ontario and elsewhere in Canada; additionally, input was sought from contacts in the facility construction and design industry. In conclusion, an appropriate allowance is estimated to be in the range of $8,500 to $10,000 per seat, or roughly $45.0 million to $56.0 million.

Comparative and Competitive Facility Assessment

Since 1996, ten Ontario Hockey League teams have moved into new 5,000- to 9,000-seat sports and entertainment spectator facilities. Depending on the location of these facilities, the nature and extent of revenue generating amenities, the state of the local economy, and the “gate success” of the OHL team anchor tenant, among other factors, these facilities can realize net operating positions ranging from a loss of $0.5 million, to a profit of $0.5 million (this is provided as a general range and note that actual results can vary materially, due to the previously mentioned factors). Depending on the market within which a facility is located, and its location vis-à-vis competing centres and facilities, the number of events a facility is able to secure may be dramatically impacted. It is concluded that within the greater St. Catharines / Niagara region, there exists a number of entertainment venues that will be competitive with a proposed new spectator facility in St. Catharines. This competitive landscape includes a number of existing venues in Hamilton, Buffalo, Niagara Falls and Toronto, and involves both venues and promoters creating competition for artists and events and, in turn, venues and promoters creating competition for the entertainment spending of consumers.

Locational Assessment

Based on a high level review of alternative locations identified for the proposed Spectator Arena, each were concluded have their own distinct advantages and disadvantages:

• The Gatorade Garden City Complex / Jack Gatecliff Arena site has the advantage of user group familiarity. In addition, the site is concluded to be large enough to accommodate a new 5,000-seat facility, as well as accommodate the requirements for transport truck access, on-site parking and have sufficient off-street parking within 500 metres. However, development staging will be an issue (as the site currently houses the arena where the Niagara Ice Dogs currently play) and additional land acquisition by the City will be required.


• The Lower Level Parking Lot site has the advantage of creating an iconic presence overlooking Highway 406, as well as complementing the City’s planned downtown performing arts centre and existing entertainment zone on St. Paul Street. Soil and other geotechnical issues may, however, serve to significantly increase the cost of development at this location.

• The Church Street site has the advantage of being close to a number of businesses and is well serviced by municipal transit. However, a lower street presence (compared to the other two locations under consideration), coupled with the need for the City to acquire portions of this site and compatibility concerns, render this location the least preferred.

In conclusion, both the Gatorade Garden City Complex / Jack Gatecliff Arena site and the Lower Level Parking Lot site have a number of advantages as well as significant potential disadvantages, and it is recommended that the City undertake additional due diligence on these sites in order to identify a preferred location. The Church Street site is concluded to be the least preferred of the three sites evaluated.

Financial Assessment

In constructing and operating a 5,200-seat (5,450-person capacity) Spectator Arena in St. Catharines, arena revenues are projected to be almost $1.937 million in Year 1, growing to over $2.131 million by Year 5. Operating expenses, prior to capital reserves and management fees, are estimated at almost $1.965 million in Year 1, yielding a net operating loss of approximately $28,000. Including capital reserves and management fees, the Spectator Facility is projected to realize a net operating loss of approximately $328,000. Throughout the duration of the forecast period, the arena is projected to realize an operating loss, increasing to a projected $464,000 by Year 5. Based on this range of net operating profit, it is unlikely that the proposed Spectator Arena would be able to support any level of debt obligation or be able to attract an equity investment of a material amount.

Economic Impact Assessment

A number of positive economic benefits are generally presumed to accrue within the City of St. Catharines and Niagara Region as a result of constructing and operating a 5,200-seat / 5,450-capacity Spectator Arena. These impacts include:

During Construction


During Operation

• $5.8 million annually in direct and indirect spending; • $2.4 million annually in employment income growth; • 80 person years of employment annually; and • $2.9 million annually in direct tax revenue to the federal and provincial governments.

Over the first five years of operation, including construction, the St. Catharines Spectator Arena is projected to impact significant economic benefits on the community / region, including:


The above noted quantitative impacts would be in addition to the numerous associated / qualitative impacts which the presence of such a building could be expected to impart, including

• Quantitative and qualitative benefits associated with hosting an OHL Team; • Event hosting; • Increased spending by visitors attending events / competitions held at the Arena; and • Incremental investment in the vicinity of the Spectator Arena.


Risk Assessment

A high level risk assessment of the Project was undertaken. In generating a projected net operating loss of approximately $28,000 in its first year, a 5,200-seat / 5,450-capacity Spectator Arena is not projected to be able to support third party financing. As such, the majority of capital, financing, operating, maintenance and design risks are assumed to remain with the City of St. Catharines; only construction risk is likely able to be transferred to a third party. In order to minimize its risks, it is recommended that the City retain a third party operator to maximize the ability of the Spectator Arena to attract entertainment and other events. In retaining such a firm, it is further recommended that management agreement contain incentive clauses (tied to the net financial performance of the building and the number of entertainment events they are able to schedule into the facility), and thereby limit, to the greatest extent possible, programming and demand risk while operating the facility.


Appendix A – General Assumptions and Limiting

Conditions

General Assumptions and Limiting Conditions

1. The use of any Projections made in conjunction with this Report may not be appropriate for use outside

of their intended purpose. These Projections, which will not reflect actual financial results, may reflect a possible scenario for a prospective 5,000-seat Spectator Facility located in the City of St. Catharines, during the Projection Period, given Deloitte’s judgment as to a probable set of economic conditions, together with the hypotheses which are consistent with the purpose of the Projections. Each of the financial scenarios produced in conjunction with our analysis may contain hypotheses and assumptions which are based on a set of economic conditions or anticipated courses of action that are reasonable and appropriate in Deloitte’s judgment, are consistent with the purpose of the projections, but which may not materialize as set out therein. The hypotheses represent plausible circumstances, but need not be, and may not have been fully supported.

Since future events are not subject to precise projections, some assumptions will not materialize in the exact form presented by our analysis. In addition, other unanticipated events and circumstances may occur which could influence the future performance of a 5,000-seat Spectator Facility in St. Catharines. Therefore, the results achieved in future operating periods will vary from the analysis of prospective market and financial conditions set out therein. While there is no recourse to predicting these matters with certainty apart from informed and reasoned judgments, it must be stated that future events may lead to variations in Project performance which may materially alter Project results. Deloitte does not warrant that actual results achieved during the Projection Period will be the same, in whole or in part, as those shown in the Projection. The Projection is based on hypotheses and there is a significant risk that actual results will vary, perhaps materially, from the results projected.

2. Unprecedented and ongoing events in the financial and credit markets have resulted in an uncertain

and volatile economic environment. While some historic initiatives are being investigated by the U.S. Treasury and Federal Reserve, as well as other Central Banks to halt the disruptions in capital markets, there is still considerable uncertainty about the near to medium term outlook. Any continued constriction of the credit markets, along with weakening economic fundamentals may impact all asset classes both in terms of value and liquidity. While the Canadian economy may not yet have been impacted significantly, that situation may not continue. Given volatility within the current environment, of necessity, this report has been based on the assumption that the economy will remain stable of soften without further significant disruptions and deterioration in credit availability.

3. Responsible ownership and competent property management are assumed. 4. Information furnished by others upon which all or portions of this report are based, is believed to be

reliable, but has not been verified in all cases. No warranty is given as to the accuracy of such information.

5. Our report and work product cannot be included, or referred to, in any prospectus, securities and

exchange commission filing or other public or investment document. 6. It is assumed that all required licenses, certificates of occupancy, consents, or other legislative or

administrative authority from any local, provincial, or national government or private entity or organization have been, or can readily be obtained, or renewed for any use on which the estimates provided in this report are based.

7. No investigation has been made of, and no responsibility is assumed for, the legal description or for

legal matters including title or encumbrances. The property is assumed to be free and clear of liens, easements, encroachments and other encumbrances unless otherwise stated.

8. Full compliance with all applicable federal, provincial and local zoning, use, occupancy, environmental,

and similar laws and regulations is assumed, unless otherwise stated.


9. No responsibility is taken for changes in market conditions and no obligation is assumed to revise this

report to reflect events or conditions which occur subsequent to the effective date of this report. 10. Any financial structure within this report is predicated on the market conditions prevailing as of the

date of this report. 11. Areas and dimensions of the property were obtained from sources believed to be reliable. Maps or

sketches, if included in this report, are only to assist the reader in visualizing the property and no responsibility is assumed for their accuracy. No independent surveys were conducted.

12. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures

that affect value. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them.

13. No soil analysis or geological studies were ordered or made in conjunction with this report, nor was an

investigation made of any water, oil, gas, coal, or other subsurface mineral and use rights or conditions.

14. Neither Deloitte nor any individuals signing or associated with this report shall be required by reason of

this report to give further consultation, to provide testimony or appear in court or other legal proceedings, unless specific arrangements thereof have been made.

15. This report has been made only for the purpose stated and shall not be used for any other purpose.

Neither this report nor any portions thereof (including without limitation any conclusions as to value, the identity of Deloitte or any individuals signing or associated with this report, or the professional associations or organizations with which they are affiliated) shall be disseminated to third parties by any means without the prior written consent and approval of Deloitte.

16. We have not been engaged nor are qualified to detect the existence of hazardous material which may

or may not be present on or near the property. The presence of potentially hazardous substances such as asbestos, urea-formaldehyde foam insulation, industrial wastes, etc. may affect the value of the property. The estimates presented herein are predicated on the assumption that there is no such material on, in, or near the property that would cause a loss in value. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required to discover them. The client should retain an expert in this field if further information is desired.

17. We have not audited or otherwise verified the capital cost associated with constructing a new multi-

purpose spectator arena.


Appendix B – 20 Year Forecast


FACILITY REVENUES


Other Events 262,800 270,700 278,800 287,200 295,800



Net Advertising 181,700 187,200 192,800 198,600 204,600

Sponsorships 170,000 170,000 170,000 170,000 170,000






Total Revenues 1,936,900$ 1,983,500$ 2,031,200$ 2,080,500$ 2,131,100$

FACILITY EXPENSES

Personnel Costs 920,000$ 947,600$ 976,000$ 1,005,300$ 1,035,500$

Utilities 520,000 540,800 562,400 584,900 608,300


Marketing 75,000 78,000 81,100 84,300 87,700

Insurance 60,000 62,400 64,900 67,500 70,200


Total Expenses 1,965,000$ 2,034,400$ 2,106,200$ 2,180,700$ 2,257,900$


Capital Reserve 150,000$ 154,500$ 159,100$ 163,900$ 168,800$

Management Fee 150,000 154,500 159,100 163,900 168,800

NET CASH FLOW (328,100)$ (359,900)$ (393,200)$ (428,000)$ (464,400)$


Appendix B – continued


FACILITY REVENUES


Other Events 304,700 313,800 323,200 332,900 342,900



Net Advertising 210,700 217,000 223,500 230,200 237,100

Sponsorships 170,000 170,000 170,000 170,000 170,000






Total Revenues 2,189,900$ 2,243,500$ 2,299,000$ 2,356,100$ 2,414,800$

FACILITY EXPENSES

Personnel Costs 1,066,600$ 1,098,600$ 1,131,600$ 1,165,500$ 1,200,500$

Utilities 632,600 657,900 684,200 711,600 740,100


Marketing 91,200 94,800 98,600 102,500 106,600

Insurance 73,000 75,900 78,900 82,100 85,400


Total Expenses 2,337,800$ 2,420,600$ 2,506,400$ 2,595,300$ 2,687,600$


Capital Reserve 173,900$ 179,100$ 184,500$ 190,000$ 195,700$

Management Fee 175,600 182,600 189,900 197,500 205,400

NET CASH FLOW (497,400)$ (538,800)$ (581,800)$ (626,700)$ (673,900)$




FACILITY REVENUES


Other Events 353,200 363,800 374,700 385,900 397,500



Net Advertising 244,200 251,500 259,000 266,800 274,800

Sponsorships 175,100 180,400 185,800 191,400 197,100






Total Revenues 2,484,900$ 2,559,500$ 2,636,400$ 2,715,400$ 2,796,700$

FACILITY EXPENSES

Personnel Costs 1,236,500$ 1,273,600$ 1,311,800$ 1,351,200$ 1,391,700$

Utilities 769,700 800,500 832,500 865,800 900,400


Marketing 110,900 115,300 119,900 124,700 129,700

Insurance 88,800 92,400 96,100 99,900 103,900


Total Expenses 2,783,100$ 2,882,100$ 2,984,600$ 3,090,800$ 3,200,900$


Capital Reserve 201,600$ 207,600$ 213,800$ 220,200$ 226,800$

Management Fee 213,600 222,100 231,000 240,200 249,800

NET CASH FLOW (713,400)$ (752,300)$ (793,000)$ (835,800)$ (880,800)$




FACILITY REVENUES


Other Events 409,400 421,700 434,400 447,400 460,800



Net Advertising 283,000 291,500 300,200 309,200 318,500

Sponsorships 203,000 209,100 215,400 221,900 228,600






Total Revenues 2,880,500$ 2,967,000$ 3,056,100$ 3,147,900$ 3,242,400$

FACILITY EXPENSES

Personnel Costs 1,433,500$ 1,476,500$ 1,520,800$ 1,566,400$ 1,613,400$

Utilities 936,400 973,900 1,012,900 1,053,400 1,095,500


Marketing 134,900 140,300 145,900 151,700 157,800

Insurance 108,100 112,400 116,900 121,600 126,500


Total Expenses 3,315,100$ 3,433,400$ 3,556,000$ 3,682,900$ 3,814,600$


Capital Reserve 233,600$ 240,600$ 247,800$ 255,200$ 262,900$

Management Fee 259,800 270,200 281,000 292,200 303,900

NET CASH FLOW (928,000)$ (977,200)$ (1,028,700)$ (1,082,400)$ (1,139,000)$

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RFP Spectator Centre With Appendix

Documents

totaldesign contingency multiplier

jack gatecliff complex

economic data profiling

economic demographic segments

auxiliary locker rooms

coaches locker room

net cash flow

great big sea