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City puts Challenge Penticton up for sale

The second Challenge Penticton race is still six months away, but the City of Penticton has announced plans to find a private individual or group to take over operation of the race.

“Challenge Penticton Canada is seeing steady increases in registrations, sponsors and business partners and we feel that now is a good time to investigate options for the future of our stellar race,” said Litke.

The request for expressions of interest asks for community-minded entities that have the qualifications needed to organize the race, including appropriate experience, financial capacity, and commitment to a quality race experience.

“The ideal operating model will see an individual or private entity with a vested interest lead this race to its maximum potential,” said Paulette Rennie, president of the Penticton Triathlon Race Society.

Financial capacity may end up being the most important of those qualifications. The inaugural 2013 race lost $377,000 and Mayor Garry Litke said prospective operators will need to take on the race’s debt.

“The expression of interest that is going out is asking that consideration be given to that,” said Litke, adding that if they can’t find an operator willing to address the debt, they will continue on with the current structure.

The race society, to which the city assigned the licence it obtained from the Challenge Family in 2012, will continue to operate the race through this year’s event, then assist with the transition to the new operators as of Aug. 26,  the first day of registration for the 2015 race.

The city’s press release announcing the change in direction paints a positive picture, thanking the volunteers who invested their time on the race society board and referring to the first year as a success.

Pointing out that it takes time to build a race up to the large event that the Penticton Ironman became, Litke defended describing the first Challenge Penticton as a success.

“The last week in August, this town was abuzz with activity, restaurants and hotels were full, businesses were thriving, our local business community is very happy with the fact this race continues in this community. That is a success,” said Litke.

“The reason we are so adamant about making this race survive and thrive in this community is because without the race, this town will roll up the streets the last week of August.

“If we can keep people in this town, and keep businesses active and making money, that is a success.”

Rob Appelman, president of the Penticton Hospitality Association and owner of the Lakeside Villa, disagrees with Litke’s sentiment.

“We were far from full,” said Appelman.

“A lot of the accommodators had very few, if any, people come in for the race.”

But though he questions the $5.7 million in economic impact that Challenge Penticton is attributing to the inaugural 2013 race, Appelman said it still has potential.

“It is our race and we should all embrace it and work with it as best as possible and try and get people to come to the Penticton for the race,” he said.

Even when a new operator is in place, according to Litke, the city won’t be able to just turn over the licence to them.

“The licence is held by the Challenge family in Roth Germany. If there is a local group that is willing to operate that licence, we will cooperate with them in their bid to obtain that licence from Challenge Family in Roth,” he said. “They have been part of this conversation throughout, so they are well aware of what is happening here tonight.”

“The Challenge Family has committed to working with the City and future organizers to ensure that Penticton’s legendary race continues,” said Challenge Family CEO Felix Walchshöfer.

According to Litke, reviewing the governance structure of the race was always part of the plan. Council began in camera discussions early in 2014 about the possibility of finding a new operator.

In Dec. 2013, the Western News revealed that Challenge Penticton had suffered serious financial losses in it’s first year, and that the city was backing a $200,000 line of credit to help cover those losses. The scope of the losses became apparent in Feb. 2014, when the society released its financial statement showing the total loss was $377,000.

Litke said the request for expressions of interest will be issued as soon as possible and will close at the end of April. After review, a recommendation will be brought forward to the council table.

 

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