This is a preliminary business case for the expansion of the existing South Indoor Soccer Centre, owned by the City but operated by Edmonton Soccer Association (“ESA”), by adding a new adjacent facility on the existing site containing two additional fields for completion in 2018.Construction would start in September 2017
A conceptual Design phase has been completed by BR2 Architecture. Site plans, floor plans and exterior renderings are attached. A preliminary cost estimate has been provided at $14million plus design fees. This is very preliminary until schematics are completed. Schematics will commence as soon as the City staff have reviewed the concept design and approved as a basis to commence schematics. The Schematics will be funded by ESA, supported by an approved City CFPC planning grant of $15,000. Current budget for schematics is $168,000, including project oversight fees from the City.
ESA is a not for profit association incorporated in Alberta. Its Members are Edmonton Minor Soccer Association (“EMSA”) and Edmonton District Soccer Association (“EDSA”). ESA operates three existing Indoor Soccer Centres built and owned by the City as well as the outdoor Edmonton Soccer complex at Henry Singer Park.
Soccer is the largest participation sport in Edmonton, and one of the largest winter participation sports. Currently over 23,700 hours are utilized annually in the three Indoor Centres. In addition indoor soccer is a popular spectator sport with over $550,000 revenue collected annually at $4/ day or $29/ season pass. That translates to 138,000 visitors per year.
The need has arisen primarily due to the recent and projected growth in youth teams’ soccer registrations and the popularity of a ball hockey winter program that started in 2013 using field 6 in the East Indoor Soccer Centre. By September 2018, at the latest ,the Indoor Soccer Centres would have to end the use of Field 6 and convert back to soccer use at a time when Ball Hockey and other concrete sports groups would instead wish to double their winter programs. There is also unmet demand for more hours for use by senior teams for practices, coaching and referee clinics for the youth, and tryouts by each EMSA Zone.
The final project is estimated to cost between $13,000,000 and $15,000,000. This range will be narrowed after completion of schematics.
The project will require a CFPC grant of up to $3,750,000 (25%) and an initial capital financing contribution from the City of $9,000,000 in the form of a 20 year repayable debt repaid with interest at the current prevailing cost of funds rate, assumed to be 3% but likely lower due to low interest rates, in monthly lease installments by ESA, which operates all the existing Indoor Soccer Centres under long term lease and operating agreements. This proposed financial model is consistent with the existing partner model used for all 3 existing Indoor Soccer Centres. $500,000 will be funded by Provincial grants, and contributions from ESA and Ball Hockey. If costs come in over $13million then additional City grants or financial assistance will be required.
The Project’s viability takes advantage of the significant rent reductions on all three Indoor Centres starting with the East in February 2020, West in December 2023 and South in November 2024. These rent reductions provide the means to finance the construction of the new facility with a $9,000,000 debt whose debt service will be significantly covered by the increased operating cash flow arising from these reductions, which total $982,298 / year after November 2024.
Projected net additional annual operating revenues from the new facility are $267,000 before the additional rent to the City of $599,000. The shortfall is only for 17 months and can be covered by reducing new rents to the City by $332,000 / year during the first 17 months offset by increasing the rents payable by $25,000 / year over the remainder of the 20 years.
The new facility will continue to be aligned with the City of Edmonton Recreation Facility Master Plan and other strategic policies and will be a multi sport facility with public access, designed to meet the requirements of all applicable City policies such as EDC, Leed Silver Certification and % for Art.
After its completion the City and ESA will be asked to amend the existing lease and operating agreement for the South Indoor Soccer Centre to reflect the new facility and increase its annual funded Capital Reserve Contribution by $135,000 / year.
Alternatives have been evaluated in the Business Case but at this time the South expansion appears to be the best and most viable option.
Critical success factors at this planning phase, include receiving the initial support of City Council no later than November 30, 2016, and final approval after completion of schematics and updated cost estimates by April 2017, approval of a Capital CFPC grant in 2017, approval by the Province of a total $250,000 CFEP grant application spread over 2 grant years, and the financial commitment of Ball hockey for its capital contribution of $100,000. ESA financial contribution of $150,000 is already in place. Initial contribution of $175,000 is set aside for the concept and schematic planning phases.
In conclusion, this project should be approved by Community Services Committee and then City Council along with its Capital Budget Financing Plan and grant request.
The project will allow Soccer to grow, add coaching and referee clinics, expand the number of tryouts, and offer significantly expanded practice hours for teams.
The project will allow Ball Hockey to operate a winter program from September 2018 using two concrete fields instead of one, which will significantly increase their winter program and increase availability for other groups like In-Line and Lacrosse. If not approved, the Ball Hockey winter program will likely be cancelled in 2018 in order to accommodate the needs of Soccer. This will put at risk the continued support of Ball Hockey to use our facilities for their summer programs which contribute over $400,000 / year in revenue.
All these objectives will be met without creating significant financial burden to ESA’s continued operation of all the Indoor Soccer Centres.