St. John's city council votes unanimously to backstop Avalon Celtics' purchase of Feildian Gardens

St. John's city council has voted unanimously to backstop a $3-million real estate deal that will see the Avalon Celtics minor hockey association purchase and operate Feildian Gardens arena.

It's a deal that will wipe out nearly 50 per cent of business from another well-known privately owned rink, but the owner of Yetman's Arena says he is not ready to panic, and says the city should also consider financial aid for his and other private facilities.

Councillors voted 11-0 Monday afternoon at its weekly public meeting, held via videoconference because of physical distancing rules related to the COVID-19 virus.

"It's to the city's advantage to maintain those recreational facilities in the city," said Mayor Danny Breen, who was the only member of council to speak to the motion. There was no debate among council members at the public meeting about the $3-million deal, which was discussed only at a private committee meeting in February. 

Breen said the city provided similar financial support for the Avalon Arena Association several years ago to buy Twin Rinks, which is home to the St. John's Caps Minor Hockey Association.

"It's a better situation for the city to have that partnership in place, where the operating of the building is the responsibility of the community group," he said.

The city has already approved a $100,000 capital grant for the Avalon Minor Hockey Association to purchase Feildian Gardens on Pennywell Road from Northpoint Sports.

Monday's vote was to approve a direct interest-free loan of $400,000 to Avalon Minor Hockey, with no payments for five years, and a city guarantee for a $2.5-million loan from a lending institution.

Storied history for hockey organization

The Celtics are a hockey institution in Newfoundland and Labrador, with a long and storied hockey history in St. John's. The organization has an enrolment of just under 400 players, aged five to 18.

There are 50 minor hockey clubs in the province, and the Celtics is the only one that practises and hosts its home games at a private, for-profit rink: Yetman's Arena on Bonaventure Avenue.

The association pays some of the highest hourly ice rental fees in the province, roughly $220.

Celtics president Mark Sexton said city approval was the final piece of the puzzle, and the deal will be finalized within the next month.

Sexton said there was frustration about having to pay such high rates to a for-profit rink.

We're very confident that instead of paying rent to someone else, we can pay it to ourselves and own our own building over time.- Mark Sexton

"It appeared there would be an ever-increasing ice time cost. The escalations were regular in the private world and we expected that to continue into the future, and we had no way stem the rising ice time costs," he said.

Sexton said the association is not promising to lower registration fees, but will instead focus on an aggressive campaign to pay off its debt.

"Although it sounds quite ambitious, we're very confident that instead of paying rent to someone else, we can pay it to ourselves and own our own building over time."

The association generates almost all of its revenue through registration fees, and Sexton said the fees the organization collects will "more than cover" the operating costs and debt payments.

Feildian Gardens opened in the 1960s, said Sexton, and is well-maintained with reliable ice-making equipment and two ice resurfacers.

As for upgrades, the association hopes to available for federal infrastructure funding that would not have been available to a for-profit rink.

Meanwhile, the association will maintain the name Feildian Gardens for now, but Sexton would not rule out selling the name rights if the right sponsor came along.

The plan is for Avalon Minor Hockey to establish a non-profit entity called the Celtics Centre Hockey Corporation to operate the facility, similar to a model already used to operate Twin Rinks, which is home to St. John's Capitals minor hockey.

An assessment of Feildian Gardens found "no issues identified" with the structure and ice plant.

'That's a big hole'

Meanwhile, Yetman's Arena owner Pat Yetman Jr. acknowledged that losing the Celtics will be a serious blow to his business, which he said is already on thin financial ice.

Yetman said Avalon Minor Hockey purchases 33 of the 56 hours of ice available each week at his facility.

"I did whatever I could to make sure they were looked after," he said, but he admitted "sometimes it was difficult" because of the requirements of his own hockey school and other customers.

"I'm pretty nervous about it," said Yetman. "That's a big hole."

Yetman said it's hard for him to compete with public rinks.

"I don't have anyone guaranteeing my loan and I have a high interest rate."

Because of the high costs of energy, repairs and operations, Yetman admitted that operating an ice rink is a challenge.

He said he is facing a $500,000 expense to repair or replace the ice plant, had to invest heavily to repair his ice resurfacers and upgrade safety equipment, and said the marginal business numbers make it hard to even get a loan.

"If I could survive at $200 ice rates, I would. But as of now, who knows where they're going to be?" he said.

City should be fair, owner says

Yetman said he's happy the Avalon organization was able to get help from the city. But he also says the city should provide assistance to operations like his, which provides much-needed ice time for users.

"I just hope they don't forget about the other two arenas that have been supplying ice time and recreation services to the kids in town for many years," said Yetman, referring to his facility, and privately owned Capital Hyundai Arena, formerly Prince of Wales Arena.

Yetman played 10 years of professional hockey in Europe before his career was cut short by a wrist injury. He purchased the former O'Hehir Arena as an investment, and ensure adequate ice time to operate his family's hockey school.

He said he's unable to draw a salary from the business because his costs make it difficult to turn a profit, and said Avalon Minor Hockey represented nearly half his annual revenue.

Now he said he will have to compete with an arena that can offer lower ice rentals because it is receiving the backing of the city. And will also have to scramble to find customers to fill the slots traditionally occupied by Avalon Minor Hockey.

"Are we getting financial help as well? I could definitely use a grant to do some upkeep at the arena," he said.

Avalon Minor Hockey will pay $175,000 annually to service its $2.5-million loan, and will pay the city $25,000 annually after five years.

Should the organization default on its loan, the city will take over. But city officials believe it's worth the risk.

"It reduces the need for the city's involvement in the construction of another ice surface by increasing the hours available for minor sporting groups," according to a city brief. "Surrounding municipalities have had to invest in constructing rink facilities at substantial cost. The proposal here allows the city to greatly support minor hockey at a minimal comparable cost."

Read more from CBC Newfoundland and Labrador