Wolf Depner - Penticton Western News Published: May 21, 2009
New figures show that the company charged with operating several city facilities including the South Okanagan Events Centre has already used up two-thirds of its annual operating budget three months into the year. The released figures show that Global Spectrum has gone through $670,000 of its allocated 970,000 budget subsidy to run the SOEC, as well as the attached community rink, the Penticton Trade and Convention Centre and Memorial Arena. The public heard these figures as city officials are getting ready to meet with Global Spectrum executives to discuss the performance of the building, which has generated far fewer revenues than anticipated after opening its doors in the fall of 2008. Mayor Dan Ashton said the closed-door meeting is a chance for the city to take a “somber, second check” at SOEC operations. Ashton — facing questions about his level of confidence in Global Spectrum and potential city moves — said Global Spectrum is one of the most respected companies in the entertainment industry which has its ups and downs like any business. He also warned against losing sight of the big picture in saying that businesses do not operate on a day-to-day basis, but year-to-year. Global Spectrum has plenty of time left this year to turn revenues in the right direction, he said, noting that the SOEC faces the same difficulties as other local tourism businesses trying to get through the winter months, when economic activity generally slows down.“Traditionally January, February and March are slow months in any business in this community,” he said.But if Ashton used the occasion to publicly support the SOEC and its current operators, he also conceded that it may take years for the SOEC to fulfill its economic potential. New businesses may not be profitable for two years, he said.
Global Spectrum’s local manager Curtis Webb cited several reasons for the building’s poor performance. They include ongoing delays in building construction and staffing, the sagging economy and mixed responses to some of the events held so far in the facility. Some events have done well, others not, said Webb, who also assumed personal responsibility. “It’s my job and my job solely to book the building and I did not book anything during that timeframe (except for hockey),” said Webb, in acknowledging the numbers. “Honestly, I’m worried about it. But I am not going to give excuses out,” he said. He remains confident though that the building will perform better during the coming summer months. “This is a marathon, not a sprint,” he said, adding that he does not expect to show a shortfall of $650,000 by the end of the year. News of the SOEC’s performance so far gives critics of the building another arrow in their quiver, following escalating costs (its final total cost will be close to $30 million over the original budget of $56 million) and construction delays, which caused a minor public relations disaster as the building was not available for a conference attended by municipal and provincial leaders as promised. But city officials remain optimistic about the long-term prospects for the facility.
Director of corporate services Jack Kler said the building has already showed signs of breaking the city’s seasonal pattern of economic frenzy during the summer and tranquility during the winter, even if it appears to follow that pattern for this year. “We don’t like it (the current situation), but it does not come as shock,” he said. Another sign that the city appears to give Global Spectrum the benefit of the doubt is Kler’s statement that the city will wait until next year to assess its performance with respect to contractual performance bonuses and penalties. Things could certainly be worse, as Coun. Mike Pearce suggested, pointing to the fact that the city would have had to absorb an operating a subsidy of $750,000 for the convention centre and Memorial Arena before the SOEC and its revenues, a point echoed by Kler, But Kler also made it clear that the city would have to find additional revenues if Global Spectrum were to require more than $970,000 to operate the facilities. “We have to find the money in the budget,” he said, while also making it clear that the city will not be raising additional tax revenues to specifically cover SOEC operations.
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