Global Spectrum expecting increase in deficit for South Okanagan Events Centre

After years of declining subsidies required to operate the SOEC complex, Global Spectrum is anticipating an increase in 2015.

After years of declining subsidies required to operate the South Okanagan Events Centre complex, Global Spectrum is anticipating an increase in 2015.

The projected subsidy for 2014 is $1.195 million, far down from $2.2 in 2009. But in 2015, that subsidy could rise to $1.24 million.

Dean Clarke, regional vice president said changes to the contract with the SOEC’s major tenant, the Penticton Vees, are a key factor in the 6.2 per cent increase in the deficit for the complex.

That’s in addition to a drop in revenue from the Trade and Convention Centre and uncertainty about suite rental renewals.

In 2015, according to Clarke, the majority of suites are coming up for renewal.

“That is one of our biggest challenges for 2015,” said Clarke. “We’ve had indication from a number of our suite holders that they will not be renewing.”

There is a number of patrons, he added, that feel having access to the Vault restaurant is as entertaining as owning their own seats.

The lower projections for the PTCC, Clarke said, are not much from diminished bookings as the fact that 2014 was a banner year with events like the Elder’s Gathering last summer.

In terms of the Vees, the major tenant for the SOEC, the numbers add up to a $125,000 impact to the bottom line, considering the reduction in rent, incremental ticket revenue and increase in the percentage paid to the Vees of suite and club seat licence fees as part of the latest contract.

Taken together with other factors, the projected revenue decrease is $462,000.

“That’s significant for us. We had to make significant cuts, so the decrease in salaries as a result of staffing cuts is $244,000,” said Clarke. “The budgeted decrease in net income versus projected is $72,000.”

Clarke pointed out that the complex produces about $2 million in taxes for the city. Taking into account the 2015 budgeted net income loss of $1.24 million, he said, that still leaves the city with a positive cash flow of just over $750,000.

“It pays for itself and it is absolutely significant when we are talking close to $33 million a year in economic impact from the Event Centre and the convention centre,” said Clarke.