Sudbury

City chooses Sudbury's Ball/TESC as 'preferred proponent' for KED arena

The City of Greater Sudbury has chosen the bidding party led by Dario Zulich as its "preferred proponent" to advance to the next stage to build an arena and event centre budgeted at $215 million in the Kingsway Entertainment District (KED).

Ball/Tesc advances to next stage of tendering process

The City of Greater Sudbury has chosen developer Dario Zulich as its "preferred proponent" to advance to the next stage to build an arena and event centre at the Kingsway Entertainment District. (Casey Stranges/CBC)

The City of Greater Sudbury has chosen the bidding party led by developer Dario Zulich as its "preferred proponent" to advance to the next stage for an arena and event centre budgeted at $215 million in the Kingsway Entertainment District (KED).

In a report expected to be presented to city council on July 12, the city said that Ball/TESC, one of the three shortlisted bidders for the project, scored highest in an evaluation based on quality, construction, finances and design/construction schedule.

"At the conclusion of the evaluation, the Ball/TESC team scored higher in both the technical and financial criteria," the report said about the joint venture. "Thus, the Ball/TESC team has been declared the Preferred Proponent and will progress to the next stage of the PDB Process." 

An earlier report from the city more than doubled the budget for the proposed arena and event centre, from $100 million to $215 million.

In a written statement, Zulich, who is the president and co-CEO of TESC, said he agreed that the escalating costs were unacceptable, and said the "next phase" will be to wrestle costs and project scale down to a manageable – and affordable – level.

"I completely agree with Mayor (Brian) Bigger that a price tag of $215 million is way higher than expected and is out of the question. But that number is just the estimate and not the budget," the statement said.

"Now that the preferred design-build team has been selected, I am looking forward to the next stage in the process whereby they can refine and polish the design with input of all stakeholders including the city, the operator and the Wolves/FIVE as major tenants while arriving to an acceptable project budget for City Council and the citizens of Greater Sudbury."

The city says that estimated budget for the proposed arena and events centre has skyrocketed to $215 million, leaving questions as to whether the project remains viable. (Jamie-Lee McKenzie/CBC)

Two other builders were shortlisted for the project – Ellis Don and PCL Construction. Ellis Don dropped out of the bidding process earlier this summer, leaving the Sudbury-based tandem Ball/TESC.

But whether the project will move foreward remains to be seen, as even stalwart supporters of the KED on city council are publicly dropping their support. 

"I cannot support staff's recommendation to accept a cost of $215 million for a new event centre knowing that the St. Catharines Meridian Centre was constructed in 2014 for $54.7 million," said Sudbury Mayor Brian Bigger in an email statement to media Wednesday, following the city's public report of the rising costs.

Bigger said the new budget for the arena and event centre would mean increasing municipal taxes by two per cent per year for the next 30 years.

Coun. Robert Kirwan, who has long been the most vocal proponent of the arena, and the KED, said he can't support the new $215-million budget estimate.

But Kirwan added that he still believes the community would benefit from having an arena on the Kingsway, and he would consider a proposal for a less expensive arena.

"I do believe that we don't need a Cadillac arena," Kirwan said. "We can make do with an arena that's pretty similar to what we've got now."

Kirwan added that even if an arena is never built, or is delayed, it does not put the KED project in jeopardy overall. He said the proposed casino and hotel at the property should still go ahead.

Casino and hotel developers still on board

In a letter to council dated July 6, 2022, Gateway Casinos & Entertainment Limited, which would operate the proposed casino at the KED, said it still supported the project overall.

The letter cited a number of setbacks, including an ongoing lawsuit from the Minnow Lake Group, which opposes the project because of inadequate consultation.

"Yet despite these setbacks and costs, we have not wavered in our decision to pursue the KED as the location for our new Sudbury casino," the Gateway Casinos letter said.

"To date, Gateway has invested over $4 Million in design, development and legal costs at the KED site."

It was unclear, however, if the letter was written before news broke of the ballooning budget for the arena.

In an undated letter to council, Genesis Hospitality Management, said it is "excited to be part of the KED and are hopeful that city council can come together and give the project the final commitment to commence."

The KED developers chose Genesis Hospitality to build a hotel which would be located on the site.

With files from Casey Stranges and Jonathan Migneault