Milton will receive the Pan Am Velodrome with the help of a $7 million donation from the CEO of Mattamy Homes, millions in additional donations and a possible partnership with Wilfrid Laurier.
By Ryan McGreal
Published January 31, 2012
In a press release issued this morning, Toronto 2015, the Pan Am Games host corporation, confirmed that the town of Milton has committed to building a permanent velodrome at Milton Educational Village (MEV) that will be used for cycling events during the Games.
TO2015 CEO Ian Troop is quoted saying, "On behalf of TO2015, we would like to thank the Town of Milton for making this velodrome a reality. This is the result of sound deliberation and an appreciation for the potential associated with a permanent velodrome."
This dashes the hopes of a group of Hamilton Velodrome supporters who have been trying to keep Hamilton's velodrome bid alive by fundraising to top up City Council's $5 million contribution cap.
Last October, TO2015 responded to Council's decision by stating that the city's contribution was too low and it would have to pursue alternate locations. By December, Milton emerged as a serious contender.
According to the staff report [PDF] presented to Milton Town Council at last night's meeting, the Town has committed to raising $19.8 million, or 44 percent of the $45 million total.
The Town will directly contribute $3.8 million in capital. $7 million will come from the Peter Gilgan Charitable Foundation, a private charity run by Mattamy Homes founder and CEO Peter Gilgan. The Mattamy Group has offered a further $2 million for naming rights.
$2.5 million could come from Wilfrid Laurier University, which is considering building a Milton campus at MEV. However, that money is not yet confirmed.
A fundraising campaign run by Gilgan and Tim Hockey, CEO of TD Canada Trust, is expected to generate a further $3 million, and the organizers hope to attract $1.5 million in in-kind capital contributions from local suppliers.
The town does have some wiggle room, as the $45 million capital construction cost is regarded as a high estimate. The actual cost could come in $5 million lower.
The report concludes that it is in the town's long-term interest not to cut corners in the construction, as a cheaper, low-quality facility will have limited capacity to attract high-profile events:
We know, for example, that the Velodrome in Los Angeles, the ADT Event Centre, has suffered as a premium international events centre as a result of being constructed with minimal investment in the quality and quantity of interior spaces and builtins within the building.
Between payroll costs and operational expenses, the velodrome is estimated to cost $1.6 million a year to run. However, after three years of operation this will be offset by between $1 million and $1.5 million in total revenues.
Some or all of the balance will be offset by annual payments from the Pan Am Legacy Fund. TO2015 cannot guarantee how much the Legacy Fund will pay out annually, as that will depend on interest rates of return on the $70 million fund.
The staff report notes that the primary purpose of the facility is not to generate a net revenue, but to provide a community resource:
As a municipal facility which represents a legacy facility for community use and for the sport of cycling in Canada, this facility represents a public investment similar to other public buildings. Many of those do not have operating account which provide a revenue neutral or surface revenues over costs, that require some level of subsidy to meet annual deficits from facility and program operation.
The town plans to generate operating revenue by selling tickets to watch sports events (it will have 1,500 permanent seats and another 750 temporary seats) and renting facilities to athletes - both the 250 metre (820 feet) track and the 1,858 square metre (20,000 square feet) infield (an appendix to the staff report [PDF] demonstrates a number of infield configurations).
The facility will also seek to generate revenue from commercial retail, food concessions, office space, and a fitness centre.
An additional proposal will study the feasibility of a geothermal heating system to reduce both capital and operating costs.
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