Deferral of Saskatoon’s downtown arena deal ‘could mean a better contract’

Saskatoon city council’s decision to defer its vote on a new downtown event and entertainment district could mean a better contract in the long-run, Greater Saskatoon Chamber of Commerce CEO Jason Aebig says.

Aebig said the potential agreement between the City of Saskatoon and Oakview Group 360 (OVG 360) is complex and “could have long-standing implications for the city into the future.”

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With that in mind, Aebig said council made the “right call” deferring its decision.

By holding off on a vote, councillors have more time to discuss the deal and meet with subject matter experts who can, “comment on the high-level terms of the deal as they’ve been negotiated to this point and see where there’s room for opportunities,” potentially re-negotiating areas of concern, he said.

While Aebig supports the deferral, he spoke positively about the current drafted agreement, saying it ticks most of his boxes.

Even though OVG 360’s upfront capital contribution has lowered from $20 million to $15 million, Aebig said the shorter contract term, the incentive fee structure that pays for performance, and the commitment to absorb losses tied to the arena’s operation are all positive. They’re also all terms that weren’t included in the previous agreement.

But, one of the arguments voiced by Trevor Jacek, CFO of Midwest Development, against the city’s partnership with OVG 360 was that it could hinder financial supports from the federal and provincial governments because the company is American.

Aebig isn’t so sure about that.

“It’s not quite accurate to suggest that [OVG 360] is not a Canadian company or doesn’t have an interest in protecting Canadian jobs and ensuring that Canadian dollars stay in the country,” Aebig said.

According to him, OVG 360 has “a strong and relevant Canadian operation” and governments will likely come to the table so long as “the business case is solid.”

Aebig also pointed out that there are a number of companies in Saskatoon which have roots in both Canada and the U.S.

While Jacek’s proposal for avoiding a partnership with OVG 360 was having the City of Saskatoon fund, own, and operate the project on its own, Aebig said having a private partner can give a competitive advantage in a “hyper-competitive industry.”

That advantage would come in the form of securing shows, entertainment, conferences and other events.

“If there is a case to be made that we can do this on our own and we can achieve the same level of performance, we can be just as competitive, and we can reduce the risk to taxpayers, then I think that is a viable option,” Aebig said.

So rather than avoiding a partnership with a Denver-based company, Aebig said deciding to make the project an entirely Saskatoon-based operation would need to be done with these considerations top of mind.

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