Penticton city council will have to make a decision on whether or not to return a $6 million grant for arena development strategy.
The challenge before city council and staff is the project is not yet at a stage where the total impact to taxpayers and funding sources can be confirmed.
A number of funding sources were identified, all of which include the $6 million Strategic Priorities Grant as a capital contribution to the overall funding needs. However, the grant is conditional on confirming remaining funding sources by March 31. The grant guidelines state the money would also have to be spent by 2024.
READ ALSO: Penticton gets $6 million grant for arena
“The Strategic Priorities Grant application was initiated as a result of an opportunity that came up while the Arena Task Force was going through the arena development discussions. The Arena Task Force recommended at the time that the city take advantage of the funding program, knowing that the arena development project was still in its early stages,” said Bregje Kozak, recreation and culture director for the City of Penticton, in her report that will be discussed at the next city council meeting on Tuesday.
Kozak told the Penticton Western News in January that there was still a lot of planning and design to be conducted before construction on a new ice arena in the city could get underway.
READ ALSO: Business case for new Penticton arena being updated
In 2017, the Arena Task Force (through various studies, reports and engagement with the community) provided direction on the future of Penticton’s aging arena facilities. The strategy included construction of new twin-pad arena, decommissioning of McLaren Arena and re-purposing Memorial Arena to a dry-floor multi-use sports facility at a capital costs of approximately $34 million.
The task force felt at the time they were applying for the grant that there was enough time in subsequent phases of arena development strategy to confirm details of the project and seek any electoral or other approvals that would be required to implement the strategy. According to the report coming to city council, the grant administrators recognized that the project was in early stages and supported the strategy, however they were skeptical about the city’s ability to fund the project and placed the conditions on the grant.
READ ALSO: Task force recommends new arena
City staff requested an extension on the conditions but it was denied, as the UBCM wishes to re-allocate funding that can’t be used for its original intent.
“Although it may be difficult to give up a grant with a $6 million capital value, the due diligence for this project isn’t complete and it would be irresponsible to make budgetary decisions without a detailed funding strategy that is understood and supported by the community,” said Kozak in her report.
City staff are recommending that the grant be returned to Union of B.C. Municipalities as the conditions of the grant cannot be met. Options to move forward for city council include that they could direct staff to plan base building repairs for McLaren and Memorial arenas, as required to keep the buildings operational for the short term (up to 10 years). As well, staff would develop a long-term funding plan for replacement or upgrade of the facilities in the next 10-plus years.
Option two, before council, is that they would direct staff to plan for base building repairs, functional upgrades and renovations for McLaren and Memorial arenas in order to extend the life expectancy for an additional 10 to 20 years and report back to council with detailed upgrade options and associated costs.
Option three is that council provide an alternate direction to staff.
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