Penticton working on new contracts for Vees and arena management

Economic impact analysis commissioned by Global Spectrum shows SOEC produced an economic impact of $36 million over 12-month period

The Penticton Vees are by far the single biggest economic generator at the SOEC

The Penticton Vees are by far the single biggest economic generator at the SOEC

Both the Penticton Vees and Global Spectrum are looking forward to when the city of Penticton awards a new contract to manage the South Okanagan Events Centre complex.

For Global Spectrum, it’s a competition to maintain their contract to manage the complex, which includes the events centre, Memorial Arena and the Penticton Trade and Convention Centre. Global’s current management contract ends on Dec. 31, 2013 and the city is currently seeking proposals from interested companies.

For the Vees, it’s a matter of negotiating a new lease with the city and the SOEC, as the previous agreement expired when the final whistle blew on April 21, ending the team’s championship hopes. According to a leaked draft copy of an economic impact analysis commissioned by Global Spectrum, the Vees are the biggest single contributor to economic activity generated by the SOEC, accounting for almost $3 million over the course of a season.

But rumours of major changes to the ownership of the Penticton Vees are unfounded, according to two members of the ownership cartel.

“We have a few minority owners and they come and go,” said Graham Fraser, president of the Vees organization and a majority owner.

Vees governor and part owner Neil Jamieson agreed, saying that while there are often expressions of interest in the team, he doesn’t know of any shareholders planning to sell.

Likewise, Penticton Coun. Andrew Jakubeit said there had been “some people kicking the tires” but no request from the Vees to review an ownership change. The city has the right to approve any ownership of any team or any business that would occupy any of the city’s facilities.

“There has been no formal application to the city to say person X is buying the team. We would have to approve whoever the impending sale is to,” said Jakubeit. “At this time we have had conversations with the team to renew their contract and we are still working through that, so council hasn’t endorsed anything new.”

According to director of recreation Chuck Loewen, a new lease agreement may take some time to work through, but until that point, the city council has approved an extension of the current agreement.

“Any time we have leases that expire, they basically go month to month under the current arrangements and terms until a new lease or extension or renewal is signed,” said Loewen. “The complication is that we’re in the middle of an RFP situation for the management, the operations and everything else.”

Loewen said there has been a strong response to the RFP, which covers everything from overall operation of the SOEC to food services, marketing and ticketing, all services currently handled by Global and its group of affiliates. A recent tour of the facilities drew a number of interested companies, he said.

“Based on the response to that, we are expecting a number of proposals coming in,” said Loewen.

Global Spectrum, however, is doing everything they can to present their case to continue management.

The economic impact analysis commissioned by Global paints a rosy picture of how successful they have been in operating the SOEC complex, including Memorial Arena and the Penticton Trade and Convention Centre.

Between September 2011 and August 2012, the report, dated December 2012, estimates direct spending by visitors using the complex was $25.3 million, producing an estimated total economic impact of $36 million.

The chosen period, however, falls after both a shuffling of the local management team and a long period where the SOEC was operating at a minimal level, with only a few events other than Vees hockey happening in the main arena.

The Economic Planning Group, who prepared the report, also inserted a disclaimer they were preparing the report after the review period, so there was no opportunity to directly survey users on the amount they were actually spending. Instead, secondary sources were used “supplemented by estimates of the analysts based on experiences elsewhere.”

Taken individually, the 2012 report does jibe with a 2004 feasibility study. That report predicted the building would add a yearly economic impact of $6 to $8 million, matching the $6.7 million impact the 2012 study attributes to the events centre portion of the complex.

The analysis also indicates the SOEC has been largely successful at attracting visitors from out of town. While attendance at Vees games is 87 per cent local, concerts, trade shows and other events are drawing more than half their visitors from other parts of the Okanagan or farther afield.

The trade and convention centre, by far, remains the main economic driver for the complex, drawing in more than 100,000 visitors and generating $14.1 million of the estimated direct expenditures.

Where those visitors are coming from depends on the type of the event, according to the analysis. Conventions draw approximately 78 per cent of their attendees from outside the Okanagan region, while consumer shows draw almost all locally and regionally.

Proposals for the SOEC contracts had to be in by April 30, which is when Loewen expects the city will receive the bulk of the submissions.

“It will take probably at least the month of May to get through all of them and make a decision as to what the shortlist is,” said Loewen. “We do hope that towards the end of summer we will have a sense of the direction we are heading.