Upgrades to Budweiser Gardens would pay long-term dividends: KPMG report

Upgrades to refresh and expand Budweiser Gardens could begin in 2024 if city council endorses the financing plan.

A report to council’s Corporate Services Committee offered a detailed analysis of the $33.3 million project’s Return on Investment (ROI) by professional services firm KPMG.

For 20 years the city-owned sports and entertainment facility has shared its revenues with city hall, but venue operator OVG360 recommends a series of upgrades and a back-of-house expansion to ensure the Bud remains competitive in the coming decades.

“If we want to attract another World Figure Skating Championships or attract a World Junior Hockey Championship, or even host Memorial Cup Tournaments, the needs for those kind of events have changed since this building was opened,” explained Deputy Mayor Shawn Lewis.

The $33.3 million proposal would include two construction phases, the first focused on customer-centric enhancements ($15.1 million), and the second phase dealing primarily with so-called “back of house” enhancements ($18.2 million).

Phase 1 includes:

• Level 100 Club Lounge Expansion
• Level 100 Multipurpose Event Space Expansion
• Level 100 Knights Locker Room Renovation
• Level 200 Private Suites and Corridors Refresh
• Level 200 East Bowl Loges
• General Food and Beverage Concessions Upgrades
• General Audio/Visual and Technology Upgrade

Phase 2 includes:

• Level 100 Multipurpose Event Space Expansion
• Level 100 Office Renovation
• Level 200 Backstage Club/Kitchen
• Level 200 Administrative Office Expansion & Refresh
• Level 300 Feature Bar at North Concourse
• General Audio/Visual and Technology Upgrades

A cost sharing partnership between the municipality and venue operator OVG360 would see the city cover 80 per cent of the total reinvestment.

Recently, KPMG was retained to perform a high-level review of the financial model, reasonability of the assumptions, and the results.

The city’s ROI for Phase 1 is estimated at 15.3 per cent and 4.9 per cent for Phase 2.

The staff report reads, “Based on updated estimates incorporating KPMG’s observations, the expansion build and renovation is estimated to result in approximately $53 million of incremental cash flow for the City over the remaining term of the agreement “

“The city is going to do better than what was projected in the initial report,” explained Lewis.

London’s share of the cost would be borrowed and gradually repaid using annual revenue from the 4 per cent Municipal Accommodation Tax (MAT) on hotel rooms.

“The hotel tax was always designed to help pay for this sort of tourism and recreational infrastructure upgrades, lifecycle renewals,” explained the deputy mayor.

The Corporate Services Committee will consider the report detailing the financial case for the expansion on Oct. 3.