City ready to go to market on new arena with $60M target

Citing a "target budget" of $60 million, a recommendation to North Bay City Council by City of North Bay staff would see authorization given to issue a "Request for Proposal for a Progressive Design Build for the design and construction of the Community and Recreation Centre."

A staff report notes — that upon majority approval from the council and a successful RFP process — the project is scheduled to "achieve substantial construction completion in 2025 and meet the Zero Carbon Building (ZCB) Design Certification requirements of the Green and Inclusive Community Buildings (GICB) Program funding contribution agreement between the City and the Government of Canada."

See related: Council moves new arena to next step — costs estimated at $60M+

The plan is for the target budget of $60 million to cover the design and construction of a new community and recreation centre.

In August 2023, a trident-shaped community and recreation centre project was shelved as bids to build ballooned to more than $70 million.

In December 2023, council members learned a rebooted project would, according to a hired Colliers Project Leaders consultant, come with an estimated cost of at least $60 million. 

See also: Cheaper arena project recommendation on council agenda

And: Report: Proposed arena target budget of $52M is 'insufficient'

The requirements of the Net Zero Carbon CaGBC design standard v2 must be met to receive the GICB Program funding from Infrastructure Canada. Projects must submit for certification before September 30, 2024, or upgrade to version 3.

Industry insiders stated in December 2023 the "2025 timeline for completion was aggressive ... Most participants in the market-sounding report agreed that construction would range from 16 to 20 months from start to finish," while two "suggested the City may wish to amend the target for the Centennial to having a groundbreaking in 2025 as this would likely be more achievable than opening the facility in 2025."

"If we use the Progressive-Design-Build (PDB), we'll be costing it at certain milestones — 20 or 30 per cent, 50 or 60 per cent — that we'll get potentially more competitive prices if supply and demand issues are aligned but there are no guarantees. The marketplace will determine that," said CAO John Severino then.

Mayor Peter Chirico also favoured the PDB approach. "As we move forward in this project, we can ensure as a council that everything we need as a functional program — including barrier-free — is maintained."

After reviewing the information received from the Colliers report, the design and budgets of similar community centre projects and "current cost guides and construction indices," such as Statistics Canada Building construction price indexes, staff advises "it is necessary to include a budget target of $60 million to attract serious and broad market interest and participation in the RFP that will lead to the selection of a qualified proponent to undertake a Progressive Design Build of the project that meets the current expected functional program, Zero Carbon Building technical requirements and target schedule within the Target Budget."

Under a Progressive Design Build, cost estimates for the project will be checked and confirmed "at a minimum of two key milestones and presented to Council for consideration and direction to continue based on the expected functional program, Zero Carbon Building technical requirements and target schedule within the Target Budget."

However, at those key milestones, should the target budget be insufficient, the council "will be given further options to decide whether to continue, de-scope or discontinue," the project.

The City's financial staff has prepared a new preliminary financing plan that "includes the $25.778 million in GICB funding from the Government of Canada, one-time dividends and funding from the Canada Community Building Fund, OLG revenues, PAYGO, Municipal Accommodation Tax, potential surplus from open and cancelled projects and Special Debt to finance the Project and inform the Target Budget to be included in the Project’s RFP for construction of the community and recreation centre."

Preliminary Capital Financing Plan (Jan. 31, 2024)

• GICB Program Funding $25,778,016
• Canadian Community Building Fund (formerly Federal Gas Tax) $9,420,792
• Municipal Accommodation Tax $1,000,000
• OLG $1,000,000 — At the discretion of the council, additional funds can be allocated from OLG. As of February 6, 2023, an additional $1.5 million is available to be allocated.
• Reserve - Special Dividends 2,074,896
• Capital Levy/Paygo Funding 2,942,351

Subtotal = $42,216,055

• Surplus from Open/cancelled Projects 3,050,000 — As part of the Year End and June 30 Capital Variance processes, capital projects will be closed and at the discretion of the council a portion of the surpluses can be directed to this project.
• Special Debt $14,733,945 — Special Debt may be issued to reach the Target Budget. Special Debt has always been a requirement to complete the project. As such the City has been actively monitoring debt to ensure balance sheet strength and ensure debt capacity for this project.

Total Target Budget = $60,000,000

The target budget will be included in the 2024 capital budget, as well as in the issuing of the RFP, if approved by the council during its Tuesday, Feb. 12 regular meeting.

Only once the final design is substantially completed and a construction contract negotiated as part of the Progressive Design Build will the financing plan be finalized.

"At the time that the construction contract is negotiated, the City will then have better clarity of the total costs of the Project to finalize the required financing.
A further Report to Council will be brought forward for the purpose of awarding the construction contract for the Project. That report will include the
financing plan for the Project," per the staff report.

In September 2023, the Community and Recreation Centre Ad Hoc Committee recommended — and the council soon after approved — investigating the feasibility of a new project with a $52 million upset limit that will include the minimal possible functional programming, according to this report from Severino. A third-party Class A estimate was completed in November 2022. Council committed in September to an inclusive budget of $52 million for a rebooted project with the budget covering the complete cost, including all consultants, construction, and internal costs.

See: Council sets in motion new arena project with $52M upset limit

In the Colliers report, the participants indicated the desired project budget of $52 million was "likely insufficient given the current design and Net Zero energy requirements ... the overall commentary was that even with a redesign, the Net Zero requirements will drive the cost higher and likely above the budget. The full impact on cost and schedule was unknown."

The City of North Bay has set key milestone dates of September 2024 for construction drawings that meet v2 design requirements for the federal GICB program and substantial completion in 2025 to coincide with the City of North Bay’s centennial celebration.