Saskatoon strikes tentative deal with operator of future downtown arena

The City has struck a tentative 25-year deal with Oakview Group to operate Saskatoon's planned downtown arena and convention centre.

Oakview Group, referred to as OVG360, will manage the convention centre and theatre two years before opening and then assume operations of the facilities once they open as part of the long term deal the city says will generate $170 million in cash flow.

"It's $170 million we won't need from property taxes to support the project," said Dan Willems, the city's director of technical services, transportation and construction.

"That's point blank what it is. That's huge."

Willems, who is leading negotiations for the project, said his heartrate was high throughout the "intense" negotiations, which began on May 15 as both sides worked to a final agreement.

• Get the CTV News app for Saskatoon area breaking news alerts and top stories 

Willems said the net present value of the deal would be equivalent to $89 million in funding for construction.

"Information we've received from OVG is this is the largest financial commitment they've made in the Canadian market," Willems said.

The city would receive an initial contribution totaling $20 million from OVG360 prior to the first events at either the event centre or the arena.

OVG360 would share up to 40 per cent of profits with the city for a booking, depending on the event.

Any event profiting less than $2 million would see OVG receiving a 10 per cent cut, which rises incrementally to 40 per cent for any event generating more than $4 million in profits.

"It's designed to drive the best performance they can possibly do," Willems said.

OVG360 would receive 20 per cent of any event profit at Sid Buckwold Theatre in TCU Place.

Other financial specifics of the deal include OVG360 receiving a $25,000 management fee each month as well an additional $25,000 per year for all off-site sales support functions.

OVG360 would be in charge of negotiating sponsorships and advertising for the venue, as well as receiving a commission on sales of naming rights, sponsorships and premium seating. Food and beverage inside the venues would be exclusively provided by OVG, but there is opportunity for some self-catered events.

The city is allowed one designated event day per year for Remembrance Day.

OVG360 operates more than 300 arenas, convention centres and stadiums across the world, and most recently entered an agreement with FirstOntario Centre in Hamilton, Ont.

Councillors will discuss the framework deal at the city's governance and priorities committee next Wednesday.

A detailed funding plan will be revealed on Aug. 21 in advance of the agenda being released for council's regular business meeting at the end of the month.

Willems said even if the project was fully funded today, it would be five to six years before an opening date.

However, he can't doubt the millions of dollars of economic impact the arena could bring to the area as the project continues to take shape.

"Our forebearers blessed us with an event facility that is a major concert destination. It's primary economic impact to the city, the region and the province is actually as a concert venue," he said.

"Our goal is not to lose our marketplace."