Saskatoon city council rejects deal for third-party arena operator

After hours of debate at City Hall, councillors decided to turn away from OVG group, after years of courting the Florida-based company as a potential operator.

Saskatoon city council rejected an agreement with a third-party operator for the proposed arena and event centre.

Councillors voted 5-3 against the recommendation to move forward with talks with U.S. based Oak View Group, or OVG360 during Wednesday’s council meeting.

Councillors Kathryn MacDonald and Senos Timon were not in attendance during the vote, while Coun. Scott Ford recused himself to avoid a conflict of interest.

Mayor Cynthia Block said she supported the agreement.

“It seemed to me, based on everything that we heard today, that it was a good deal for the city and that it was an opportunity for us to move forward,” Block told reporters.

Before the vote, representatives from OVG360 were at city hall, making their case to council to continue talks on a framework to operate the new arena.

“We’ve done these projects across the globe. As we’ve mentioned, we want to bring those expertise. We want to bring the banking relationships. We want to talk about the creative deal structures that we’ve put together,” said Peter Zingoni, OVG360’s senior vice-president of business development.

• Download the CTV News app to get breaking news alerts sent to your device

Under the proposed agreement, which could have lasted up to 30 years, the city estimated $411 million in total revenue, with OVG360 receiving $176 million in management fees and commissions, and the city taking in about $235 million.

If profit is below $2 million, it would be split evenly between the city and OVG360. If it’s between $2 million and $4 million, the city would receive 100 per cent of the profit. For profits above $4 million, OVG360 would receive between five and 15 per cent, depending on the amount.

The company also committed $15 million toward construction of the downtown event and entertainment district.

Trevor Jacek, a board member with the SaskTel Centre, urged council not to approve the deal, arguing it does not benefit Saskatoon residents.

“Our conclusion is that this is not a favorable deal for the City of Saskatoon as a municipality or the City of Saskatoon taxpayers,” Jacek said.

SaskTel Centre executives have previously said they want to oversee the downtown arena.

Council spent several hours pressing OVG360 on details, including operations, performance targets, revenue projections and potential conflicts of interest for event bookings, before ultimately voting down the agreement.

Mayor Block said while the city is not moving forward with OVG360, the arena project itself is still very much alive.

“We are a city that rises and we will get up tomorrow and figure out what the next strategy is to make sure that this can move forward,” she said.