Convention centre vows ‘committed’ to payback

The City of Winnipeg will spend another $1.44 million this year on a loan payment for the convention centre expansion.

A finance memo to city council notes the city will use hotel tax revenue to make the annual payment on a $33-million loan guarantee, which is linked to the convention centre expansion completed in 2016.

The city has made similar payments every year since the first charge came due in 2017. The new payment will bring the total to just over $11 million since the project was completed.

“We’re still at a point (where) the hotel development north of the convention centre has yet to be completed and that just hinders our ability to capture the necessary business that positions us that we can both pay down the loans that we have and also appropriately maintain the centre,” said Drew Fisher, the RBC Convention Centre president and chief executive officer, in an interview Friday.

The city loan guarantee was created following the $180-million expansion. The original plan called for a hotel to open in 2016 as well, triggering $17 million in new convention centre business and $16 million in tax revenue to support the project.

However, a hotel proposal wasn’t secured until long after the project was finished.

Plans to build a Sutton Place Hotel at the northwest corner of Carlton Street and St. Mary Avenue to support the project were announced later, with an initial target completion date of 2021.

A Sutton Place website now states the hotel is expected to open in 2025, but owner Northland Properties did not confirm a specific target date in an email Friday. Northland did note the hotel is “currently under construction.”

Fisher said the convention centre will pay back the city in full, with payments beginning when the hotel is open.

“This was within our expansion business plan. The financial projections from that plan would place us in a… position to pay down these loan commitments, once the hotel was completed and also operational,” he said. “We remain committed to that. We’ve always been steadfast in that commitment.”

Fisher said a new hotel would allow the centre to attract more national and international events, whose organizers tend to seek out sites with ample hotel space close by.

“When that hotel development is built, we’ll be able to capture larger conventions, we’ll be able to capture multiple conventions at the same time,” he said.

Since the centre’s north building is 50 years old, Fisher said the repayment plan must take place without compromising proper maintenance of the entire complex.

“It’s a balancing act there but we are absolutely very confident that when the hotel project is built that we’ll be able to capture that extra level of business that will allow us to… pay back our loan commitments and… maintain the convention centre at a very competitive level,” he said.

Coun. Jeff Browaty, council’s finance chairman, said the city can afford the payment, which is covered by hotel tax revenues, not property taxes.

“There are sufficient funds within those pools to pay for it,” said Browaty (North Kildonan). “It’s expected that the convention centre’s business should improve once the new hotel in the precinct of the convention centre is completed, specifically the Sutton Place Hotel.”

Browaty said he has not received a recent update on when the hotel will open but it would “surprise” him if that happened before the end of this year.

The city is set to make this year’s loan guarantee payment, which was approved by council, by March 31.

joyanne.pursaga@freepress.mb.ca

X: @joyanne_pursaga