Posted September 12, 2013
It seemed like a good idea at the time.
Build an indoor soccer pitch in Centennial Park and they will come.
Five years ago, Mayor Farbridge opened the facility that was to be operated by Guelph Community Sports with the Guelph Soccer Club as tenants.
Nobody considered that soccer is a warm weather sport that is played outside for seven months of the year in Canada. During that time the soccer dome sits idle with little revenue. The argument provided was that the dome, built in Centennial Park, is not air-conditioned.
In July, Guelph Community Sports told the city it could no longer make the payments on the $900,000 mortgage that has $500,000 still outstanding. In fact, the August payment was not made and the mortgage is now in arrears.
It is not clear who owns this structure. It is built on city land but who is the registered owner?
The taxpayers of Guelph are now on the hook for that amount because the city guaranteed the loan. Guelph Community Sports is also a guarantor but they apparently have no money. Guelph Soccer refuses to guarantee the mortgage although it would use the facility for the next ten years if a deal could be salvaged.
City staff has been negotiating a solution that includes extending the mortgage amortization period to 15 years to reduce the mortgage payment by 50 per cent.
This is where it gets sticky. The playing surface has to be replaced in 2018 and the Dome itself must be replaced in 2023. Both those fixes are expensive and must be completed before the mortgage is paid off.
This project was star-crossed from the beginning. It is apparent there was no business plan that nailed down the obligation of Guelph Community Sports. Such questions as the ability to pay down the mortgage and maintain the building for the original amortization period, come to mind.
Was there any monitoring of the operations, in the past five years, on the part of the city staff? Was there any reserve for repairs and replacement in the original budget?
Was it ever considered that playing soccer all year round is a very expensive proposition, particularly in a country like Canada?
Does the city not provide playing fields for soccer enthusiasts to enjoy during the warmer months?
What was the thinking behind guaranteeing taxpayer support to allow soccer to be played year around?
Even city hockey facilities close down during the summer months.
It is another example of special interest groups receiving taxpayer support for their projects without a careful analysis of the financial consequences.
This is a similar situation to what occurred during Mayor Fabridge’s first term, when the now known as the Sleeman Centre, was turned over to a Calgary company to operate the facility. That deal also fell apart when the operator failed to pay the mortgage on the building and meet other obligations. It eventually cost the taxpayers $4 million to return the operation to city control.
Somebody must watch the store if this soccer deal is to be rescued.