An Ottawa Senators-affiliated company involved in the Sensplexes wants help from city hall to secure two multimillion-dollar lines of credit as two facilities struggle to make money during the COVID-19 pandemic, provoking the management of a competing private arena to call for equal treatment.
Ottawa Community Ice Partners (OCIP), a non-profit organization whose members are the Senators, the Senators alumni and Morley Hoppner Group, isn’t asking to borrow money from the City of Ottawa but it requires the municipality’s backing to access $5 million in lines of credit to prop up the finances of the Bell Sensplex on Maple Grove Road and the Richcraft Sensplex on Shefford Road.
OCIP wants a $2-million line of credit for the Bell Sensplex and a $3-million line of credit for the Richcraft Sensplex. The banks offering access to the money are requiring OCIP to have the city guarantee the borrowed funds.
The city has public-private partnership (P3) agreements with OCIP for Sensplexes and Capital Sports Management, another Senators company, operates the facilities. The city is eligible to take ownership of the facilities for a dollar each after the long-term contracts expire.
The city already guarantees OCIP loan repayments related to the construction of the Bell and Richcraft Sensplexes, with the the Bell Sensplex having a $25-million mortgage through the Bank of Nova Scotia and the Richcraft Sensplex having a $26-million mortgage through RBC.
Now, OCIP needs the city’s help to secure the lines of credit to make mortgage payments and cover other operational costs between March and December 2020.
OCIP chair Brian Crombie, who’s also the chief financial officer for the Senators, wrote to the city last month explaining that the facilities have had revenue problems because of the COVID-19 pandemic. The cash flow projections are “negative” for 2020, even after the organization reduced expenses, Crombie said in the letter.
There’s a third Sensplex, the Cavanagh Sensplex on Carp Road, but Crombie’s letter to the city regarding the lines of credit doesn’t mention the facility. The P3 structure involving the city and that arena is different. The city built the facility and continues to own it, but Capital Sports Management operates it under a 20-year agreement through July 2027.
City council on Wednesday will decide if it will help the company secure the lines of credit for the Bell and Richcraft Sensplexes.
Watching closely is the management of the Minto Skating Centre, which has been
for nearly six years over a previous arrangement that provided a tax break to the facility in exchange for the municipality receiving cheap rental rates. When the city ended the tax break and asked for back taxes, the skating club sued the city for the cost of subsidized ice time.
Aurele Simourd, CEO of Mask Management, which runs the skating centre, said he doesn’t take issue with the city proposing to backstop OCIP’s line of credit, since the city has a business interest in keeping the Sensplexes viable and providing important recreation services to residents.
But Simourd said the Minto Skating Club provides the same public services, “and yet, we’re faced with an uphill battle to even get a small portion of what the Senators are getting.”
Kyle Simourd, vice-president of Mask Management, said the centre was the first arena in Ottawa to allow skating activities during the pandemic and it attracted NHL players, while working with the city to implement important public health measures.
The proposal for the city to support OCIP’s lines of credit, which was recommended by city staff, should draw attention to the similar services provided by the Minto Skating Club, Kyle Simourd said.
“Now that we see this, we’re hopeful we can continue working with (the city) to reach an amicable conclusion to our outstanding litigation, and then start working with them very cohesively on a go-forward,” Kyle Simourd said.
There’s an underlying sore point for the Minto Skating Club when it comes to the city’s Sensplex partnerships, especially regarding the Richcraft Sensplex.
The city in 2012 pursued a P3 for the Richcraft Sensplex and waived the property taxes for the development as the skating club, which is also in the east end of Ottawa, was planning its own expansion.
A recent P3 report produced for council indicated all Sensplexes are meeting their obligations to the city.
A spokesperson for the Senators organization couldn’t be reached for comment about the financial impacts to the Sensplexes.