In what could be a term-defining decision for North Bay City Council, local politicians are being presented with three options by City of North Bay staff on the future of the proposed twin-pad arena and community centre.
The cost has been a sticking point for many when it comes to the City of North Bay's proposed twin-pad arena and community centre designed to be constructed at the Steve Omischl Sports Complex on Lakeshore Drive.
The bid reveal in mid-June ended any hope of keeping construction costs near the estimate of approximately $44 million as three contractors submitted tenders ranging from $70.8 million to $82.3 million. Add another $8 million in design and ancillary costs to the low bid and it is now a nearly $80-million project.
See related: Low bid is $70.8M for construction of community centre
And: What's next for $78M twin ice pads and community centre?
In a report from the CAO, John Severino provides background information on the project, the low tender, current general market conditions, and community
impacts of an unplanned closure of West Ferris Arena. It also summarizes three potential options for Council’s consideration.
See the full report: Community and Recreation Centre Update – July 2023
During the Tuesday, August 8 meeting, the council will be asked to choose from one of the three options presented in the report — and listed below — and direct staff to complete the work necessary to implement the selected option.
See our poll here.
Option 1, Building Redesign
According to the report, "This option involves cancelling the tender and initiating a redesign process of the building. The building redesign would make use of the existing functional program and site but would be constrained by the existing species at risk avoidance permit. This option would allow the project delivery
method to be changed if benefits are anticipated."
Risks:
- Price escalation due to inflation at current rates (12.3 per cent annualized) could result in adding $8.5 million to the build cost over the next year.
- Moves project completion out to 2027.
- Delays in project delivery increase the risk of unplanned closure of West Ferris Arena.
- Price reductions available through redesign without program cuts are minimal.
Option 2, Project Redesign:
This option involves cancelling the tender and initiating a redesign process of the building and the building function. This would make use of the existing site but would revisit the functional program.
Risks:
- Price escalation due to inflation at current rates could add $8.5 million to the build cost per year.
- May move project completion out to 2029.
- Delays in project delivery increase the risk of unplanned closure of West Ferris Arena.
- Reduction/loss of certain program functions would reduce the utility of this facility and may not meet the needs of our stakeholders.
- Project delivery method changes would likely increase the risk of uncertainty in pricing.
"This option offers the opportunity to achieve meaningful cost reductions through cuts to the functional program. This approach introduces risk in the form of escalation costs due to inflation during the time it takes to redesign the project. This factor can significantly inflate construction prices, eroding any potential cost-saving benefits derived from cuts to the functional program.
"Significant reductions to the functional program will be required to achieve meaningful cost reductions while also overcoming inflationary pressures.
Public re-engagement is recommended as part of this option."
Option 3, Award the Contract:
This option involves awarding the tender and initiating construction. The project team would work with the contractor and consulting team to identify potential reductions in project cost upon award.
Risks:
- Price reductions available through value engineering are minimal.
- This would see construction completion in the fall of 2025 and would minimize the risk presented by inflation as well as an unplanned failure at West Ferris Arena.
Severino also draws attention to concerns regarding the failure of West Ferris Arena: "The facility provided 1,500 hours of programmed ice during the 2022/2023 season. The limited capacity in nearby communities to absorb this programming would lead to disrupted and reduced schedules leading to decreased time available for ice sports.
"In addition, current sport tourism initiatives would be impacted significantly as tournament hosting would be severely restricted. Reduced sports tourism will
impact the local economy, affecting restaurants, retail establishments, and hotels that benefit from visitors attending tournaments and events."
The City of North Bay issued a statement in June acknowledging all three bids had come in at least $20 million over budget. "The City had estimated the total project cost at $51.6 million, including design, contingencies, allowances, furniture, fixtures and equipment." The construction cost included an estimated 1.5 per cent inflationary escalation amount per quarter.
The lowest bid for the construction of the building, excluding the planned redesign of the Lakeshore Drive and Booth Road intersection, came in at $69.263 million or approximately $808 per square foot, according to the CAO's report, "which significantly exceeded the estimated cost. The square foot cost is within the range of community centre project awards in the last six to eight months in Ontario."
The City of North Bay met with the contractor with the lowest bid "to understand the cost and cost drivers of the project," writes Severino. "The project team asked directly about the impact of the trident footprint design on construction costs. The contractor indicated that the trident footprint represents a minor difference in cost and is not a major factor.
"The project team inquired if redesigning the building as a side-by-side would save a considerable amount of money. The contractor responded that there
would be no major savings and such a redesign would not be recommended."
In December 2022, staff recommended the recently elected council "initiate the tendering for the construction of the multi-purpose community and recreation centre." In February, the majority of the council felt it was an effective way to move the project along while leaving itself a way out in the event the tenders come in too expensive for its liking.
North Bay City Council approved the project by a 6-5 vote in February while stressing the resulting financial implications of that move will ultimately decide whether or not to build. Councillors Maggie Horsfield, Lana Mitchell, Justine Mallah, Chris Mayne, Tanya Vrebosch and Mac Bain supported moving forward while Mayor Peter Chirico and Councillors Sara Inch, Mark King, Gary Gardiner and Jamie Lowery voted against going to tender.
Mallah said then, "It's time to initiate the tender process. Only then will we have the most updated costs and be able to make the most informed decision. As we have already discussed, we can turn away if the numbers come back massively higher than expected. We won't know until we go there."
See: Council approves new arena project
See also: More on council's decision to tender new community centre
Mallah inherited the arena file as chair of the community services committee — and a decade's worth of griping about the proposed building's location, design, and cost. Following Wednesday's opening of the bids, Mallah admitted she was taken aback by how far over the estimate the submissions had come in.
"I'm not prepared to move the project forward with that price tag," Mallah said, "but I'm hoping it can be altered to have a much lower price tag and still have the same sort of amenities. I do think starting a new twin-pad arena project from scratch will still be a significant cost and we have to consider the time and money already spent."
