Budget for KED arena in Sudbury doubles to $215 M

The budget for a proposed arena and events centre at Sudbury's Kingsway Entertainment District (KED) has more than doubled to $215 million, according to a new report from city staff.

In 2017 the project was budgeted at $100 million, but the staff report said long delays due to groups that oppose the KED have led to increased costs.

"Delays in the project have stretched to beyond five years and pushed the detailed cost analysis to 2022," the report said.

"These new estimates, prepared in the context of the pandemic, supply chain shortages and extraordinary inflationary pressures, are significantly higher than previous estimates but in line with industry trends." 

The report said additional financing to cover the extra $115 million would require funding of around $7.48 million per year, over a 30-year term, with $6 million from a property tax levy and $1.48 million from event centre revenue sources.

Those revenue sources would include additional parking charges, a capital surcharge on tickets for events, and increased naming rights fees.  

Despite the budget increase, the report said the arena project remains on schedule to be completed by 2025.

Sudbury city council is scheduled to meet on Tuesday, July 12, and the arena is expected to dominate those discussions.

"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.

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

Bigger said the city secured $205 million at an interest rate of 2.63 percent over 30 years to cover capital projects.

"I have asked staff to provide council with an update and summary of all projects approved by council, where staff anticipate financing these projects with new debt. I will ask city council to defer any further debt financed projects at this time," he said.

Time to move on, says councillor

Ward 4 Coun. Geoff McCausland, who has opposed the KED project, told CBC News he hopes the report will convince some of his colleagues to move on from a proposed arena at that location.

"We've been wasting so much energy and so many resources and creating so much strife, trying to make something happen that truly does not make sense," he said.

"And that we can move past this time on the Kingsway and focus on city-building, and focus on the outcomes, and focus on renewing our (downtown) arena in a way that makes sense for our city." 

McCausland has been a proponent for Project Now, which would renovate Sudbury's current downtown arena.

He said that the project was originally budgeted at $55.5 million. 

"So even with significant price escalations, you know, it should fall under our $80 million, $90 million that we already have borrowed and set aside for a new arena."

I nearly fell over when I saw the numbers. ​​- Ward 2 Coun. Michael Vagnini

Ward 2 Coun. Michael Vagnini said he supported an arena and event centre at the KED early on, but changed his mind as costs have gone up.

Vagnini said the city has an aging population and shrinking tax base to cover major cost overruns. 

"I nearly fell over when I saw the numbers," he said about the new staff report.

"Somebody has to recognize that this is just going in the wrong direction," he said.

Can't have the Cadillac of arenas

Ward 5 Coun. Robert Kirwan, who has supported the KED and proposed arena from the start, said he can't support the new $215-million budget estimate.

But Kirwan said he still believes the community would benefit from having an arena on the Kingsway.

He said he will ask staff to go back to the drawing board and request proposals for a cheaper arena.

"I do believe that we don't need a Cadillac arena," Kirwawn 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.

Ward 11 Coun. Bill Leduc agreed staff will need to revisit their plans and propose a less expensive project.

"I think there's still an opportunity there to build an arena, maybe not the Cadillac of arenas, but still building the arena, an event centre for potentially, let's say $130 million, $140 million with upper levels of support from the government," he said.

Leduc said that if organizations like the Minnow Lake Restoration Group hadn't opposed the KED arena, it would already be built by now.

"If we wouldn't have experienced these delays, we would have had a new event centre and arena opening up this year and people being able to enjoy it," he said.

He added the staff report does not open doors for the city to refurbish the existing downtown arena. 

"The KED is very much alive," Leduc said.