The City of St. Albert reiterated its existing commitment of support to the St. Albert Steel at a meeting Friday afternoon, but the Alberta Junior Hockey League team believes a new lease agreement will still be negotiated prior to Feb. 28.
“We were clear that we’re not going to continue to negotiate a different deal. This is the offer,” stressed Mayor Nolan Crouse. “What we basically did was share with the Steel that we had reached the end from a negotiations point of view. We explained council’s position and basically the ball is in their court now.”
The Steel’s current lease at Servus Credit Union Place expires Aug. 31, 2012. The deadline for the Steel to renew their contract, based on the information the city shared with them Friday, is Feb. 28. If the Steel want to relocate, they would have to present their case at the AJHL’s annual general meeting in January.
“What we’ve basically done is communicated to the Steel, as well as by email to the league president, our current position,” Crouse said. “I don’t know that there is any pretty way of telling somebody that we’re not going to negotiate further.”
Despite the stalemate in negotiations over ice times and rates, sponsorship and advertising agreements and repayment of dressing room construction costs, it’s business as usual for the Steel.
“We’re optimistic that we can work something out,” said Greg Parks, head coach, general manager and part owner of the Steel. “We certainly want to find an amicable solution and we’re going to continue to work towards that.
“We’re very open to sitting down and having some true negotiations. Our door is always going to be open.”
Parks is upset the city issued a press release at 11 a.m. Friday, before the 3 p.m. powwow, in which Crouse was quoted as saying: “We believe the current agreement is fair when compared to all the other AJHL teams.”
“I’m very disappointed that they would send out a press release before sitting down and talking to us,” Parks said of the city’s decision to halt negotiations.
The press release outlined the value of the city’s in-kind support of the Steel, approximately $289,000 a year since 2007 for use of the facilities, which includes office/storage space and reduced ice rates.
A significant portion of the gift in-kind is advertising space at Performance Arena that equates to a value of $213,000 in inventory allocated to the team.
The city also spent $215,000 in 2007 to upgrade the dressing room to AJHL standards and is being reimbursed by the Steel in instalments. They currently owe $193,500.
Parks said the in-kind support given to the Steel needs to be clarified.
“It’s important that it’s understood that the city does not give any money directly to the Steel,” he said.
Parks noted the $213,000 of inventory is advertising space sold by the Steel at their expense and is not a guaranteed revenue stream, creating a risk for a small not-for-profit organization.
Ice rates are standard minor sports partner rates, he added.
The remaining balance is office, storage and gym memberships, which is mandatory for all AJHL team requirements.
Parks also rejects the mayor’s notion the current agreement is fair in comparison with other AJHL teams. He said information was provided to council to show that all the teams receive 100 per cent of their advertising inventory and considerable reduction in ice rates, along with additional support, anywhere from forgiving dressing room remodelling all the way to concession sales.
“I’m not sure the city is thinking this through. Servus Place has come out and said that the ice we rent for practices [mid-afternoon slots on week days], that’s ice time they can’t rent out. That’s a lot of revenue Servus Place is going to miss out on,” Parks said of the ice rates that generate almost $50,000 from the Steel to Servus Place.
Losing the main tenant would also affect advertising in the building, Park said, not to mention the impact on other Servus Place leaseholders who would lose game night revenues.
He added the existing arrangement of splitting advertising inventory 60/40 creates nothing but confusion to potential advertisers and does not allow for exclusive partnerships.
“Servus Place and us have come to an agreement that the way the advertising is structured now does not work. Servus even came to us and said ‘Here, let’s do this. We can make this happen. It would work for everybody. It would be good for potential advertisers.’ But the city pulled that off the table as well. It’s very clear that it doesn’t work for Servus and it doesn’t work for the St. Albert Steel and no one is trying to fix it,” Parks said.
The Steel have lost money since the Fort Saskatchewan Traders set up shop at Performance Arena in 2007. At a budget meeting in November, Steel governor Kelly Smith asked council for $125,000 annually for 10 years to give the team a boost financially but the request wasn’t approved.
The Steel’s operating budget has been pegged at $525,000 per season.
Attendance hit rock bottom in 2010/11, as season ticket sales dropped from 454 in the Steel’s debut in St. Albert to 117 in 2010/11. The Drive for Five campaign launched in June to sell 500 season tickets has generated about 75 sales.
“I hope the people of St. Albert understand that we are committed to the city and we’re doing everything we can to make it work. Hopefully the people will come out and support us. It’s a great product and the only people that lose out in the end are the kids out on the ice and that’s unfortunate for them,” Parks said. “We hope to come to some agreement that benefits both parties.”
Crouse is concerned the Steel will leave the city like the St. Albert Saints did in 2004, when the AJHL board of governors approved their relocation request to Spruce Grove.
“This happens … at every level of sport and eventually councils have to say, ‘OK, how much are we going to continue to provide funding,” he said.
However dire the financial situation is for the Steel, Crouse said council would prefer the team finds other ways to raise revenue.
“What this does is provide them the better part of six months to either raise more funds, find different fundraising strategies or get the clipboard out and get 10, 15 people selling season tickets,” he said. “They need to enter August knowing the agreement. Greg owes it to the fans. He knows where he stands now. They’ve got the winter to decide just exactly where they stand and we have transferred the ball to them until Feb. 28.”
