Two P3 ice rinks in the nation’s capital are skating on thin ice, leaving the City of Ottawa holding the bag for the failures, according to a leaked city council report.
P3s were championed for the Bell Sensplex and Ray Friel Centre by then-mayor Bob Chiarelli. At the Sensplex groundbreaking, Chiarelli said the privatization would “allow Ottawa residents to incur little or no debt while enjoying the benefit of outstanding facilities”, and said the rink was “a prime example of new infrastructure sooner and for less cost to everyone.”
The reality is nowhere close: the arena opened late, and is now getting bailed out to the tune of $1.4 million.
This places the city even further on the hook for a project that has yet to break even. The city took responsibility for the private sector’s $25.6 million debt to build the arena, waived property taxes and development charges and agreed to buy 2,400 hours of ice time from the Capital Sports Group. The city is also paying for a business consultant for the project.
According to the Ottawa Citizen, city staff also recommends ending a P3 with Serco Facilities Management, the company running the Ray Friel Complex, “because the company is performing poorly.” Serco’s bid for the complex underestimated operating costs and relied on overly confident revenue projections.
According to the Citizen, the report says “the company is underperforming in several areas and isn’t trying very hard to make things better,” and leaves little option but for the city to take over the facility, as well as the company’s $12 million debt.
The Ottawa failures join a growing list of unsuccessful recreation P3s. In BC, Cranbrook’s RecPlex has just returned to public hands where it belongs.
A termination agreement between the city and Keen Rose saw the P3 recreation facility returned to the city in March. It’s good news for the people of Cranbrook and a feather in the cap of Mayor Ross Priest and city staff, says CUPE BC secretary-treasurer Mark Hancock.
“It also sends a signal to other municipalities to stay clear of privatization deals,” Hancock added. “They can and do go bad and taxpayers pick up the tab.”
“Recreation facilities are a source of civic pride and healthy community living,” Hancock said. “Keeping them public is the best way to ensure good service. The RecPlex now will be operated publicly, as it should be.”
Municipal officials have heard that message loud and clear in Medicine Hat, AB. During his address to the CUPE Alberta Division convention, Mayor Garth Valley rejected the idea of a P3 for a new arena.
Read CUPE’s research brief on recreation P3s here.
With files from the Ottawa Citizen