Mr. Steve Barclay Assistant Director, Efficiency Unit

1. PPP Duty Visit to CanadaExperience Sharing Seminar31 July 2006PPPs in Sports and Entertainment Facilities Mr. Steve Barclay Assistant Director, Efficiency Unit

2. Sports and entertainment facilities visited • Ray Friel Recreation Complex • Brampton Centre for sports and entertainment • Save-On-Foods Memorial Centre

3. Brampton Centre for sports and entertainment

4. Powerade Centre • Formerly known as Brampton Centre for sports and entertainment • Renamed for a corporate sponsor in Summer 2005

5. Demand from public Strong demand from public to build the arena • Large venue for OHL hockey, figure skating competitions, shows • Future venue for Toronto Olympic bid • Surveys validated that public wanted this size of facility • Project identified in the City’s Strategic Plan

6. Difficulties however.. • Limited funding available for additional capital facilities – could not provide with municipal resources alone

7. Local political support for PPP • City Council made this a high priority • Rally the public, community stakeholders, & local business • Support for P3 fundamentals for large capital facility • Financial support

8. Facilities • 5,100 seat spectator arena • 30 private suites • 3 practice ice pads • 350 seat restaurant • 200 seat “end-zone” bar

9. Progress Heads of agreement Release RFP Opening Event 1996 1997 1998 Memo of understanding Start construction Select successful proponents • Completed in less than 3 years

10. Partnership Private Public Brampton Sports Centre Inc. Construction Design, build, finance, operate

11. Agreement • Total capital cost - ~ $27 million City - $6 million + land Private - $5.2 million Guarantee on privately secured mortgage - $15.5 million

12. Agreement • Recurrent Cost - ~ $1.7 million • Build & manage for 34 years • Hand back to city at the end with no additional cost

13. Agreement • Share rewards and the downside LOSS PROFIT • Private partners receive $230,000 / yr • The city receives $250,000 / yr • Remaining • $600,000 / yr – City • Remaining - Private • 60% - City • 40% - Private

14. Benefit of PPP • A project today - at a lower cost • Diversify the delivery methods • Reduced risk in operating specialty building • Expand community potential/visibility • Expand investment in the community

15. Ray Friel Recreation Complex

16. Ray Friel Recreation Complex Development • Need for expanding Ray Friel Recreation Complex identified in 2002 • City Council approved in 2003 • Serco was awarded contract to manage the complex and manage the construction project in June 2004 • New facilities available in August 2005

17. Partnership Design & Build

18. Expertise from private partners NEW facility OLD facility • New expansion – design, build, finance and operate • Old building – management & operate

19. Agreement • Upon completion of construction, the new expansion becomes the property of the City • Through the above arrangement, all property taxes and development charges could be waived Profit sharing • Serco receive 100% profit up to $250K • Serco receive 75% profit from $250K - $350K • Serco receive 50% profit above $350K

20. Agreement • The City will purchase 2,400 hours of prime ice time annually • Rate from Serco - $148 • Public Sector Comparator - $250 • The City will re-sell the 2,400 hours to users at the existing city rate • Serco can freely convert the ice rink to basket ball court (or other facilities) in summer • Free to let out shops or other premises

21. Benefit of PPP • City can provide service to the public at a lower cost ($148 from Serco vs $250 as indicated in PSC) and without initial capital costs • More flexibility • to change the use of facility to generate revenue • to accept advertisement • to let out shops

22. Save On Foods Memorial Centre

23. Save On Foods Memorial Centre • 7,000 seats • Home of Ice hockey team Victoria Salmon Kings

24. Partnership RG Facilities for management and operation

25. Built – in special facilities • Built-in luxury facilities during construction • Luxury suites, Club seats, King Club seats

26. Agreement • Construction + 30 years operation agreement between City of Victoria and RG Facilities • Schedule time specifically for city community use • 1,700 hours of ice time • 300 hours of dry floor time • 500 hours of meeting room • 2 fundraising special events • All other daily O&M duties are responsibility of RG, including naming rights, advertisements, food kiosks, etc.

27. Benefits of PPP • Better planning on generating more revenue • Built-in luxury facilities to generate extra incomes in construction stage • Sell naming rights to private companies • Incorporate terms for community use in the contract without extra costs

28. Summary

29. Benefits of PPP • Less capital cost requirements from the city • Fast delivery • Expertise in operation • Provide community facilities at lower cost • City maintains ownership of asset – bring public confidence and may have financial benefits • Flexible to generate more income

30. Lessons learnt • Know what you want! • Public support is important • Select “best” potential partner • Evaluate financial and political risk • Plan for & discuss operational insulation …but be a“partner” • Be patient! (may not profitable in short term)

31. Thank You