Vees contract leaves city coffers shorthanded

Bruce Walkinshaw - Penticton Western News Published: November 17, 2009

Penticton residents who don’t care which team wins the RBC Cup (along with those that do) have a good reason to follow the Penticton Vees: their tax dollars. As of September this year, the City of Penticton has subsidized the BCHL hockey franchise’s presence at the South Okanagan Events Centre to the tune of $299,809, according to a city SOEC financial report. “Yes, we are subsidizing the Vees significantly,” Jack Kler, Penticton’s director of corporate services, told council at Monday night’s meeting.

Kler explained that when the city entered into a $650,000 a year contract with the team, paying them to play at the SOEC, there was “an expectation of a certain level of attendance.” The people coming to the Vees games were also projected to spend a certain amount of money on food, beverages and other merchandise. “Those projections haven’t panned out the way we expected them to,” said Kler. “So, by default, we are now in a position where we are not making the revenues that we thought we would and so one could term that as a subsidy that we are providing to the Vees simply because we have a loss there.” The lack of projected attendance at Vees games certainly concerns Coun. Mike Pearce, who chairs of the SOEC advisory committee. “We have taken steps at the centre to make it a more human place to go... and we lowered the prices. And people still aren’t supporting hockey at the level that was estimated would occur,” said Pearce. “There are only so many people interested in the Vees and I think the expectations might have been set too high.” Pointing out that both the payment-contract with the Vees and the inaccurate attendance projections the contract was based on were approved by the previous council, Pearce said it is a contract that the city is “stuck with right now” but that when it comes up for renegotiation after the 2010/11 hockey season, “council will probably have to make some choices about it.”“I know if I have to think about the deal, it is costing us, I am guessing, about $10,000 a game and that is not something that pleases me very much so certainly we are starting to turn our minds to that,” said Pearce. “There is no sense at all in doing anything other than trying to work this situation out with all the parties concerned.”

The $299,809 deficit due to the city’s arrangement with the Vees was not the only fiscal shortfall discussed in the report. According to Kler, the financial statements for the performance of the Memorial Arena, Penticton Trade and Convention Centre and SOEC show a combined loss of $119,000 for all three facilities during September, “bringing the total combined loss at the events centre to approximately $1.6 million.” Prior to Global Spectrum taking over, the city was already subsidizing the Memorial Arena and Penticton Trade and Convention Centre to the tune of $750,000 a year, explained Kler, so the city is spending “about $850,000 a year on the South Okanagan Events Centre alone.” Pearce said that while the SOEC advisory committee is working to bring that number down, it should not be an expectation to run the SOEC at a profit as a major part of the centre’s function is to host non-money-making events for the community. “The SOEC in all aspects is a challenge. It is a new facility. It is a good facility, provincewide and Canada-wide,” Pearce said. “And we are going to work it out to make this thing more viable for the taxpayer.”