Saskatoon digs plan on despite OVG360 fallout

Image: City of Saskatoon

Details are expected this spring on a federal program that could provide money for a proposed downtown Saskatoon (the largest city in the Canadian province of Saskatchewan) arena district as the City Hall resets its funding plan.

‘cbc.ca’ stated that the Council rejected the framework for a deal with the Denver (US)-based OVG360 to operate the district when it opens. The Council voted 5-3 against the deal three years after deciding to pursue a private partner to run the district.

The OVG360 is the Oak View Group’s (OVG’s) full-service division specializing in sports, live entertainment and hospitality. The OVG’s portfolio of 300 + client-partners spans the arenas, the stadiums, the convention centers, the performing arts centers, the cultural institutions, and the State fairs around the globe.

The Oak View Group (OVG), LLC is an American professional sports and commercial real estate company based in Denver.

The Mayor of Saskatoon Cynthia Block voiced strong support for the OVG360 agreement but said “it’s time to move on”.

Stated Mayor Block, “We always knew that funding from the other levels of Government is foundational to our ability to move forward.”

Mayor Block said while the city is not moving forward with OVG360 the arena project itself is still very much alive.

She averred, “We are a city that rises and we will get up tomorrow and figure out what the next strategy is to make sure that this can move forward.”

Before the vote, representatives from OVG360 were at the City Hall making their case to the Council to continue talks on a framework to operate the new arena.

Pointed out Peter Zingoni, OVG360’s Senior Vice-President, Business Development, “We’ve done these projects across the globe. As we’ve mentioned, we want to bring that expertise. We want to bring the banking relationships. We want to talk about the creative deal structures that we’ve put together.”

The Federal Ministry of Housing, Infrastructure and Communities Canada said in an emailed statement that the $51-billion Build Communities Strong Fund is intended to “invest in the infrastructure projects that strengthen the communities” while also helping facilitate housing.

The email further stated, “The Government will continue working collaboratively with its partners in Cities like Saskatoon to achieve these goals.”

‘cbc.ca’ further stated that the Ministry declined to answer specific questions about Saskatoon’s downtown arena district which is estimated to cost $1.2 billion and has yet to secure any funding commitments.

But the email says the fund is intended to “revitalize the local infrastructure” and references a number of categories including “the community spaces that help the residents bond together”.

The City Hall’s funding plan for the ambitious venture would require contributions of a third of the project cost, about $400 million each, from the Federal and the Provincial Governments.

The City council considered a report recently that said a “refresh” is needed for the funding model “to confirm financial feasibility” of the project.

The Saskatchewan Ministry of Government Relations Spokeswoman Karen Hill also referenced the Build Communities Strong Fund in an emailed response. Hill said the province will negotiate with the Federal Government for money from the fund “that reflects Saskatchewan’s priorities”.

The Government Relations Minister Eric Schmalz visited Ottawa (capital City of Canada) in the Fall along with representatives from the Municipalities including Saskatoon.

Hill’s email read, “The intent was to speak with the Federal Ministers and their staff on the importance of cost-shared programs and for the recreational projects in particular as they tend to be overlooked as fundamental to building the communities where the Canadians choose to live and work.”

The Build Communities Strong Fund will spend $51 billion over a decade starting this fiscal year and be followed by $3 billion a year after that.

Hill’s email said the city failed to apply for funding for the arena under the Investing in Canada Infrastructure Program that provided more than $900 million for projects in Saskatchewan.

The report considered by the Council said no programs exist that would cover the costs of the Downtown Event and Entertainment District. An email from the City Hall said conversations with the higher levels of Government have been “positive”.

The same email said the project could proceed in stages citing as an example a $500-million convention center expansion in Calgary that received $166.6 million from both the Federal and the Provincial Governments.

The City’s updated funding plan will include a new estimate that reflects inflation.

The current estimate was established in 2024 and includes $632 million for a new downtown arena and $273 million for an expanded and updated 2,003-capacity TCU Place Convention Centre in Saskatoon, Saskatchewan, Canada.

Saskatoon’s current arena, 15,195-seat SaskTel Centre, opened in 1988 on the City’s (Saskatoon) Northern periphery. The TCU Place opened in 1968 as the Centennial Auditorium.

Dan Willems, the City’s Director of Technical Services, said in an email, “Work will continue toward making the district a reality. The funding strategy is a living framework that will be refined over time as firm commitments and the necessary authority are secured for the specific funding sources.”

OVG360 Fallout

Under the proposed agreement which could have lasted up to 30 years the City estimated $411 million in total revenue with the OVG360 receiving $176 million in management fees and commissions and the City taking in about $235 million.

If the profit is below $2 million it would be split evenly between the City and the OVG360. If it’s between $2 million and $4 million the City would receive 100 percent of the profit. For profits above $4 million the OVG360 would receive between five and 15 percent depending on the amount.

The company also committed $15 million toward construction of the downtown event and entertainment district.

Trevor Jacek, a Board Member with the SaskTel Centre, urged the council not to approve the deal arguing it does not benefit the Saskatoon residents – “Our conclusion is that this is not a favorable deal for the City of Saskatoon as a Municipality or the City of Saskatoon taxpayers.”

The Council spent several hours pressing OVG360 on details including operations, performance targets, revenue projections, and potential conflicts of interest for the event bookings before ultimately voting down the agreement.

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