Don’t get lost in the buzz of rosy caffeine-laden headlines. With the addition of a new Starbucks, Servus Credit Union is indeed serving an extra dose of revenue but in the context of a nearly $9-million budget it’s about as big as an espresso shot. And unfortunately, espresso is the only thing that’s black in Servus Place’s budget or on its menu.
Every gingerbread latte you consume at Servus Place will help the facility net an extra $47,000 next year, a number that could double sometime in the next five years. Compare that to an overall net deficit projection of $837,400 in 2012, which is actually larger than this year’s losses but just a drop in the bucket compared to the $1.2 million in red forecast for 2013 and again in 2014. Not even frappucinos can cool the sting from those alarming downward trends.
Yet no one at council seems to be overly concerned. Even Mayor Nolan Crouse’s annual budget challenge to “do better” sounds half-hearted compared to year’s past.
“We’re looking forward to it being break-even someday,” he was quoted as saying last week. “I’m not sure we’ll live long enough, but let’s go for it.”
In other words, don’t hold your breath that Servus Place will suddenly become the revenue generator we were once promised. Memberships — the big revenue generator, still hover around 7,000 — less than half the numbers of multiplex darling Millennium Place — and likely won’t budge when money-making areas such as the fitness centre are maxed for space versus cost drains like the soccer pitches (utilization rate of just 43 per cent).
Stop me if you’ve heard this one before. Of course we have, and of course the city does its best to gloss over current realities by clinging to “smaller than budgeted” deficits that do nothing to help taxpayers since the city isn’t in the habit of giving back at fiscal year-end. A good portion of the public — and council and media types, too — are eating it up like chocolate-covered coffee beans. But make no mistake, the bleeding hasn’t stopped, and in fact the patient could be headed for a major setback.
Just when we’re told there is a glimmer of hope on the horizon with a corporate sponsor potentially coming forward soon to purchase the naming rights to Performance Arena, still unnamed after five years, we also learn a major sponsor is leaving the fold. Servus Place and the city brace for a reality check (make that no cheque) from Sturgeon County, which has ended its sponsorship role. With a $500,000 contribution over five years, Sturgeon County was among the more significant sponsors and an important revenue stream the city banked on (they even hoped on asking for more when it came time to re-up).
Given current leadership (Sturgeon County Mayor Don Rigney opposed the funding arrangement in 2007 when he was still a councillor) and the strained relationship between the two municipalities with the end of the intermunicipal development plan (IDP) and butting of heads over new acreage developments on St. Albert’s doorstep, this development should surprise no one but instead leaves a hole in Servus Place’s budget. With several sponsorships to renew in a community with limited corporate partners, it’s a significant hurdle to overcome.
Meanwhile, the city isn’t saying much about its new potential arena partner, only that there’s a letter of interest. That’s another chorus we’ve heard since day one, like so many stories at city hall during budget time. Unfortunately, not even sweet coffee drinks can mask that bitter reality check.
Bryan Alary is a former Gazette editor, city hall reporter.
