There is no denying the cost has always been a divisive issue when it came to the City of North Bay's proposed twin-pad arena and community centre to be constructed at the Steve Omischl Sports Complex on Lakeshore Drive.
Wednesday's bid reveal quashed 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 Wednesday's low bid and this is now a $78-million project.
See related: Low bid is $70.8M for construction of community centre
The City of North Bay issued a statement 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 City will be exploring options for Council’s consideration, including changes to the project," per the release. "An update will be provided once the next steps have been determined."
These higher bids in the tender process are becoming more commonplace. The Main Street reconstruction project saw all bids come in over budget, each by a minimum of $1 million. And, earlier this month, Sienna Senior Living acknowledged its long-term care development in North Bay, Northern Heights, had seen its overall cost jump from $55 million to $80 million. Cassellholme's final costs came in well above estimates at $122 million.
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
Mayor Peter Chirico has let it be known he was not a fan of the proposal due to the debt load.
"Affordability — I get that 50 per cent of this project could be, possibly, funded by the federal government," he said before the February vote to put the project out to tender. "I don't think we can afford to go ahead with it," even with the federal dollars. "Do we need it? Nobody's saying that we don't. Is it the right location? Is it the right design? I'm not sure."
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.
"My initial reaction was surprised — and a little disappointed — in that we had hoped the numbers would come back quite a bit lower since this is public money that we are talking about. Of course, $70.8 million, that's a significant amount, much higher than the Class 'A' estimate came back at."
What's next for the community centre with twin ice pads on Lakeshore Drive?
"Staff will need to speak with the lowest bidder and see how the project can be changed slightly to decrease costs and then it will be a decision of council," said Mallah.
The first-term councillor is not ready to completely give up on the project but said she can see how the bid results might change some minds.
"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."
On Feb. 14, the night the approval to go to tender was given, Coun. Gary Gardiner asked (then interim) CAO John Severino during the committee portion of the meeting how solid the November 2022 construction cost estimate of $43.5 million was and whether the volatile construction market would affect that number in the tender process.
Severino said the estimate was prepared with a variance of plus or minus five per cent by consultants "and it is based on the best available information for local construction, their modelling with all the information they have for similar types of construction. I would not hazard to guess as to what the market will do. I think the best we can do is have the actual cost and come back to council."
If the tender "comes back higher, how much higher are we willing to go, how much higher can we go?" Gardiner asked.
"We have a 6.9 per cent construction contingency," responded Severino. "As we would with any other tender that came in higher, we would go through the project with the low bid and we would see if there were opportunities to reduce costs, we would work with the project team, not just staff but the designers to ensure that we had everything covered or there weren't things that we could remove. At that point, we would come to council with a recommendation to identify where we could have additional dollars should that project come back from tender higher than the amount we have in that envelope."
See: Councillors seek clarity on arena project spending limit
Lowery later added, "It's worrisome that we don't have a fixed number."
Severino answered, "Once we have the tender package proposal, we will review it. We're coming to council either way whether it's over or under — much the same as we do with all other projects. We would present council with options ... but certainly, ultimately, it would come to council to be awarded.
"If it came in over, there would have to be thought given by the council on how best they would like to proceed — with options."
Lowery then posed the question, "What is too much? Is one million too much? Two million? Three million?"
"We'd be speculating at this time," Severino responded in kind.
"We need a hard stop. We've got a Class A estimate," observed Lowery. "What is that number and what is the appetite of this council to spend on this rec centre?"
On Wednesday, Mallah added, "I'm hoping we can come up with a much better solution that fits the needs of our community but with a lower price tag."
