Thursday April 1, 2004
ANDREW BRUCE
MERCURY STAFF

GUELPH -- Despite years of controversy, there is little denying that Guelph has a magnificent arena downtown.

It's well designed and built, a prominent feature on the urban landscape. It's a great place to see a hockey game. Gus Stahlmann, director of community services at the City of Guelph, often hears such comments from visitors to the city.

"We've got a great facility downtown," said Stahlmann firmly.

And Rob Code, until recently the chair of the Downtown Board of Management, said despite criticism surrounding finances, the Guelph Sports and Entertainment Centre appears to be good for downtown. It brings people in and adds to the core's character.

"It's been a terrific asset," said Code. "It's been an asset to the restaurants and bars."

Building the sports centre -- or at least its location on Woolwich Street -- was a unique idea. It's not every day a city decides to buy a mall, the former Eaton Centre, so it can demolish a department store anchor to make way for a new hockey arena.

The arena, which opened in late 2000, was the result of a long debate in the 1990s. In 1996, the city has intended to build a west-end facility with two rinks, one for major spectator events like the Guelph Storm junior hockey games.

Six private companies had been selected to submit bids to build and operate the facility in a public-private partnership -- after a long community debate.

The prevailing opinion, though short-lived, pointed to a west-end location over downtown.

That process ground to a halt when a group of downtown businesses, including the Co-operators, the Eaton Centre and the Downtown Board of Management, lobbied councillors to reconsider.

This coalition later hired an economist to look at the impact on downtown if Memorial Gardens, an old arena now mothballed on Carden Street, was to close, with replacement facilities built on a strip of land in a far-off corner of the city.

The economist's report was gloomy -- the loss would amount to $2.6 million in business each year.

"That's equivalent to the annual sales of five to 10 small or medium sized businesses," the economist, Cam Watson, warned at the time. City council took note.

And the downtown community, for better or worse, managed to first get a delay in calling for bids to build the west-end facility and then got the process scrapped by council.

Work began to find a suitable location for a major spectator facility in the core. It alone would be constructed there because a second ice pad, as initially envisioned, would not fit on any downtown parcel of land.

(Recreation facilities, including two ice pads, have since been built in the west end).

The city found a private sector partner, Nustadia Developments Inc., and began looking for a site. Guelph examined various locations, but they all seemed to have constraints.

The favoured spot was the Fountain Street municipal parking lot, across from the city police station, however clean-up from an old gas works operation there was expected to cost millions of dollars.

Then came a surprise proposal in the summer of 1997. Nustadia and the city began talking about building an arena on the site of the Eaton's department store, which was about to close. Its demise was a huge worry for mall merchants and the rest of the downtown community, because there appeared to be no one else willing to go into the mall anchor's space.

A year passed before plans were worked out, and it was late 2000 before construction was done and the new arena opened. Operations have not been as smooth as ice since however.

The first negative headlines came in mid-2001, when it became clear Guelph Centre Partners could not make payments on a $9-million construction loan.

The company blamed disappointing sales of box seats, hockey tickets and food, as well as failure to sell the sports centre's naming rights (which still hasn't happened).

The municipality had become partners with Nustadia by guaranteeing the loan to construct the sports centre, and putting in another $10.5-million for capital costs.

Now, the city is covering the loan payments -- eventually to be paid back to the city -- under a deal that ends in June 2005.

The arena has also had trouble attracting major events when the main tenant, the Guelph Storm, is not playing. Late last year, the city and the Guelph Centre Partners, formed by Nustadia to run the arena, created a special committee of community members to market the arena.

Stahlmann said the "challenge" is many promoters of events want the arena to assume much of the risk of poor attendance -- something that that is not acceptable.