Reaffirming their marginal support for the Kingsway Entertainment District (KED), Greater Sudbury city council voted 7-6 in favour of proceeding with the project during a Sept. 29 meeting.
More specifically, the vote was to approve staff negotiations to commence site preparation work for the long-talked-about municipal hockey arena and entertainment centre project, which is now cleared to break ground by Nov. 29.
Those to vote against the associated motion included Councillors Fern Cormier, Mark Signoretti, Michael Vagnini, Gerry Montpellier and Geoff McCausland. Although Deb McIntosh opted to abstain from voting, the decision was more symbolic than anything as it counted toward the nays.
The balance of council supported the plan; a group that included Councillors Bill Leduc, Joscelyne Landry-Altmann, Robert Kirwan, René Lapierre, Mike Jakubo, and Al Sizer and Mayor Brian Bigger.
As with any council discussion regarding the KED, the meeting was long and at times heated, prompting Bigger to call an end to questions after only the initial round despite prior assurances councillors would have another chance to speak.
“Zero risk is not the way to move forward, you can’t advance with zero risk, what you do is you appropriately manage risk,” Bigger said, adding that staff has done their due diligence and are being “responsible on our behalf.”
Not everyone on council supported this notion, with Signoretti noting that guarantees among partners involved in the KED have been limited to the project’s site preparation work.
“Once the site preparation is completed we don’t have anything in place right now that guarantees us … that the hotel and/or the casino will be building,” he said. “If one of those partners … doesn’t follow through with their actions, then the model doesn’t really work.”
The partners in question include Gateway Casinos & Entertainment, the developer (a numbered company headed by Sudbury Wolves owner Dario Zulich) and an unnamed hotel represented by the developer.
After clarifying that the cost-share agreement also extends to include shared infrastructure, Ian Wood, the city’s executive director of Strategic Initiatives, Communications and Citizen Service, said their existing commitments carry significant sunk costs.
“All three parties are relying on the others to deliver their component,” Wood said. “They are relying on the city to deliver the events centre as much as we’re relying on the other two parties to bring forward and complete their builds.
“Yes, all three parties are, for the most part … responsible for their individual builds in realizing the collective vision.”
This contributed to Montpellier later declaring, “It’s a standalone arena, and that’s how I see it.”
Much has changed since the KED was first approved by city council in 2017, Cormier said, adding that almost half of council doesn’t believe their inquiries have been adequately addressed.
“We don’t need to rush with taxpayers’ money when that risk is, in my opinion, heightened,” he said, citing the fluctuating markets as a result of the COVID-19 pandemic as being of concern.
“This is the single biggest investment in the city’s history,” Cormier said. “We have to be more responsive to the changes we’ve seen on this file over the past 24 months-plus, and I just think it’s worth measuring twice and cutting once if it means getting it right.”
As council’s most outspoken proponent of the KED, Coun. Robert Kirwan appeared taken aback by the evening’s lengthy discussion, noting that council made their final “go or no-go” decision during their July 14 meeting, at which they gave city staff approval to move forward with the project along a timeline that would include a grand opening in 2024.
“Clearly, that was the meeting where council had to make a decision on whether we were going to go ahead with this project or not go ahead with this project,” he said.
“There’s no way that I anticipated that every one of these decision points would be a decision over the KED again.”
Through Wood, Kirwan confirmed that any delay at this stage would put the 2024 target at risk.
“We cannot delay any more,” Kirwan said. “We have to go forward with this.”
And that’s exactly what they’re going to do.
Site preparation work is expected to be undertaken by Oakville-headquartered Bot Engineering & Construction Ltd., which is prepared to mobilize on the site in November and issued the lowest bid in 2018 at $8.5 million.
The revised contract total will be approximately $9.4 million, which is more than the bid approved in 2018 but still brings them in as the second-lowest of seven bids received in 2018.
This cost will be bolstered by the city’s retention of an engineering consultant to provide contract administration and inspection services, at a cost of approximately $330,000. The city is currently negotiating with J.L. Richards & Associates Ltd., headquartered in Ottawa with offices in Sudbury.
The total site preparation cost of $9.73 million will be split as per the cost-sharing agreement between the project’s key partners.
The city will commit $5.9 million, Gateway Casinos & Entertainment will spend $2.2 million, the hotel share is $1.1 million and the developer’s share is $530,000.
The city’s share is the greatest in this initial stage of the project due in large part to the fact they are responsible for the $5.6-million events centre parking area, according to the report by engineering services director David Shelsted, which council considered at tonight’s meeting.
The project’s partners (city, Gateway and the developer) have resumed meeting on a biweekly basis and all parties have agreed to the contents of the report being presented to city council on Tuesday, according to Shelsted.
The decision will be followed “in the next few weeks with a process to select a venue manager/operator so that this company can be in place to participate in the design-build RFP process as it begins early in 2022,” according to Shelsted’s report.
The plan is still to have the KED celebrate its grand opening in 2024.
In addition to tonight’s decision on a site preparation contract, city council will later vote on a venue operator and a final budget based on the results of a design/build request for proposals.
After council approved city staff moving forward with site preparation work tonight, McCausland introduced a motion that would have pushed for stronger assurances from partners moving forward.
The motion read: “To further support the project’s success, and without affecting the advancement of the project, staff negotiate with the project partners to establish a new contract for the construction phase of the Kingsway Entertainment District that adds reciprocal commitments to advance each partner’s project to substantial completion, establishes timelines for construction and to report the results of this agreement for council’s consideration no later than Dec. 14, 2021.”