CRYSTAL CENTRE COUNCIL UPDATE PRESENTATION

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2 CRYSTAL CENTRE Market-Driven Master Plan COUNCIL UPDATE PRESENTATION Conrad Boychuk CEI Architecture Planning Interiors Ron Bidulka PricewaterhouseCoopers LLP Stephen Eborall Bird Construction

3 PRESENTATION AGENDA Open House comments Economic Assessment Concept Design Preliminary Budget Assessment / Class D Estimate Report Recommendations Questions

4 REVIEW OF MARCH 7 TH OPEN HOUSE

5 REVIEW OF MARCH 7 TH OPEN HOUSE

6 REVIEW OF MARCH 7 TH OPEN HOUSE

7 ECONOMIC ASSESSMENT

8 PricewaterhouseCoopers Scope of Work Scope of work performed by PwC involved the following elements: Needs assessment and market analysis Options assessment Financial assessment Impact assessment Operating model assessment

9 PricewaterhouseCoopers Scope of Work Needs assessment & market analysis helps to focus facility design Amount of flat floor space in Bowes Family Crystal Gardens number of seats in Canada Games Arena other amenities to be included in the building Needs assessment & market analysis also helps shed light on the type and nature of events which the Crystal Centre could attract conferences & meetings banquets and receptions Trade shows concerts family shows other entertainment

10 Existing Situation Canada Games Arena Average Canada Games Arena Lead Tenant Concerts Family Shows Other Sports Other Entertainment Total - CGA excluding lead tenant Bowes Family Crystal Gardens Events Event Days Total Events

11 Existing Situation comparison with other markets Grande Prairie Dawson Creek Lethbridge* Abbotsford Sault St. Marie Kingston Lead Tenant Concerts n/a n/a Family Shows n/a n/a Other Sports n/a n/a Other Entertainment n/a n/a Spectator Events excluding lead tenant Flat Floor / Other Rentals n/a n/a Total n/a n/a Net Operating Position ($1,064,900) ($1,418,600) ($1,477,600) ($1,616,300) ($1,415,400) ($1,103,000) ($2,466,100) ($568,100) $418,800 per capita ($19.35) ($25.78) ($127.57) ($139.54) ($16.95) ($13.21) ($18.47) ($7.56) $3.39

12 Needs Assessment & Market Analysis Event / Promotion / Hockey Industry Comments: EnCana is new kid on the block with aggressive approach to securing events Grande Prairie market more robust and mature More seats will be a game changer More inclined to go to a market with the ability to sell 5,000 to 7,000 seats than a market with only 3,000 to 5,000 Also needs enhanced rigging system / structure along with better load in / load out capability Grande Prairie seen as viable market for WHL (larger building with amenities required) Political will also required

13 Needs Assessment & Market Analysis Grande Prairie Lethbridge Medicine Hat Red Deer Dawson Creek Alberta Canada Population , ,800 78, ,000 11,600 3,817,800 34,931, , ,900 84, ,400 11,700 4,085,200 37,105,800 % change 11.9% 5.6% 6.5% 14.8% 0.9% 7.0% 6.2% Population Distribution (2012) % 18.6% 18.4% 12.4% 19.2% 18.3% 16.2% % 66.9% 67.4% 77.4% 67.9% 70.6% 69.0% % 14.5% 14.2% 10.2% 12.9% 11.1% 14.8% Households ,300 43,700 32,200 41,600 4,900 1,489,400 13,987, ,000 46,300 34,300 47,500 5,100 1,610,400 15,092,900 % change 11.8% 5.9% 6.5% 14.2% 4.1% 8.1% 7.9% Household Income 2012 $126,900 $86,900 $94,000 $105,700 $72,500 $115,600 $85, $152,200 $103,200 $113,100 $125,600 $82,800 $140,500 $101,500 % change 19.9% 18.8% 20.3% 18.8% 14.2% 21.5% 18.3% Discretionary Income 2012 $38,500 $25,500 $27,600 $32,400 $20,200 $34,800 $23, $46,200 $30,300 $33,200 $38,500 $23,100 $42,300 $27,700 % change 20.0% 18.8% 20.3% 18.8% 14.4% 21.6% 18.4%

14 Needs Assessment & Market Analysis SWOT assessment Strengths Opportunities - sizable and growing primary and secondary trade area - seat and building improvements seen as benefitting the - high disposable income CGA from an event attraction perspective - broad demographics - inclusion of multi-function meeting space in BFCG - market liked by event promoters - amenity expansion - strong public and corporate support for AJHL - establishment of community-wide event hosting strategy - market viewed positively for prospective new tenant and events Weaknesses Threats - roofing / rigging system insufficient (CGA) - EnCana Events Centre - event load / unloading viewed a deficient (both for the - Evergreen Park / TEC Centre CGA and BFCG) - entertainment routing and event pricing - geographically distant - political will to take on more event risk - BFCG sizing, configuration and amenity issues

15 Bowes Family Crystal Gardens Recommended Sizing Flat floor space in Bowes Family Crystal Gardens need to be differentiable from other venues in Grande Prairie Existing facilities generally contain less that 10,000 square feet; Evergreen Park contains largest expanse of trade and exhibition space in the region Property Room Size Daily Rental Rates Pomeroy Hotel Stanford Hotel Stonebridge Hotel Evergreen Park Cedar Ballroom 7,400 square feet (A - 3,700sf, B - 3,700sf) $1,000 Poplar Room 1,600 square feet $200 Birch Rooms 3,500 square feet (A - 820sf, B - 1,050sf, C - 1,530sf) $125 / $150 / $175 Willow Boardroom 460 square feet $120 Aurora Room 600 square feet $65 / $90 / $140 Kakwa Room 975 square feet $65 / $90 / $140 Richmond Ballroom 5,100 square feet (A - 1,500sf, B - 1,100sf, C - 2,500sf) $800 Clairmont Room 360 square feet $150 Main Exhibition Space 85,000 square feet Meeting Rooms 10,000 square feet $350 / $400 per day Circulation 20,000 square feet

16 Bowes Family Crystal Gardens Recommended Sizing Grande Prairie & District Chamber of Commerce lists 1,160 businesses in its 2013 Member Index ; over 3,465 business listed in other web sites Canada Revenue Agency lists 85 separate Registered Charities with the name Grande Prairie in its name; 132 associations and non profits listed Types of events and meetings that could: Meetings, conferences, trade shows and / or conventions related to the agriculture sector Meetings, conferences, trade shows and / or conventions related to the forestry sector Meetings, conferences, trade shows and / or conventions related to the oil & gas sector Meetings, conferences, trade shows and / or conventions related to tourism Meetings and conferences staged by municipal, provincial and / or federal government departments dealing with public sector issues (whether from a governance, health care, northern development, economic development, public finance, tourism, etc., perspective)

17 Bowes Family Crystal Gardens Recommended Sizing First Nations meetings, conferences, trade shows and conventions Meetings, receptions and banquets sponsored by local community groups, business associations, non profit groups, etc. (including annual general meetings, regular board meetings, fundraising events, etc.) Trade and consumer shows (home and garden shows, car shows, RV shows, boat shows, outdoor shows, wedding bridal shows, craft shows, health & wellness expos, etc.) Private rentals for weddings, receptions, banquets, etc. Recommended that the region establish as part Grande Prairie Tourism a centralized trade & convention strategy and group

18 Bowes Family Crystal Gardens Recommended Sizing Inclusion of room divider into existing BFCG to create two 8,500 square foot rooms Expansion of existing BFCG to create an additional 5,000 square feet of flat floor (increasing capacity to approximately 22,000 square feet) Expansion to include individual meeting rooms, divisible into rooms of approximately 750 to 1,500 square feet Trade and Consumer Shows Meetings (>100 ppl) Meetings (<100 ppl) Banquets / Receptions / Dances Other Rentals Total Bookings Average Dates Expanded Bookings BFCG Dates Increase from avg 33.3% 71.4% % 30.4% 36.4% 371.9% from max 0.0% 11.1% % 0.0% 25.0% 411.8% Revenue Rental Rate $2,500 $1,500 $500 $500 $1,000 Potential Revenue $83,300 $25,000 $50,000 $15,000 $10,000 $183,300

19 Canada Games Arena Recommended Sizing Average Attendance 07/08-12/13 Arena Capacity Occupancy 2011 Population City County / CA / CMA Market Penetration Rates City County / CA / CMA Brandon 4,209 5, % 46,061 53, % 7.9% Calgary 8,965 19, % 1,096,833 1,214, % 0.7% Chilliwack 3,810 5, % 77,936 92, % 4.1% Edmonton 5,720 16, % 812,201 1,159, % 0.5% Kamloops 4,397 5, % 85,678 98, % 4.5% Kelowna 5,982 6, % 117, , % 3.3% Kootenay 2,761 4, % 19,319 25, % 11.0% Lethbridge 3,569 5, % 83, , % 3.4% Medicine Hat 4,006 4, % 60,005 72, % 5.5% Moose Jaw 2,889 3, % 33,274 34, % 8.4% Prince Albert 2,278 3, % 35,129 42, % 5.3% Prince George 2,270 5, % 71,974 84, % 2.7% Red Deer 5,117 5, % 90,564 90, % 5.7% Regina 4,429 6, % 193, , % 2.1% Saskatoon 4,916 11, % 222, , % 1.9% Swift Current 2,168 3, % 15,503 17, % 12.4% Vancouver 7,620 16, % 603,502 2,313, % 0.3% Victoria 5,386 7, % 80, , % 1.5% WHL Average 4, % 5.6% 4.5% Grande Prairie 3,800 5, % 55,032 82, % 4.6%

20 Canada Games Arena Recommended Sizing Projected event calendar Average Projected Number of Events GP Storm WHL Projected Growth Lead Tenant Concerts Family Shows Other Sports (3) - (5) Other Entertainment Trade & Consumer Shows / Other rentals TOTAL excluding lead tenant

21 Canada Games Arena Recommended Sizing Projected event calendar comparison with other markets Grande Prairie Storm WHL Dawson Creek Lethbridge Abbotsford Sault St. Marie Kingston Lead Tenant Concerts n/a Family Shows n/a Other Sports n/a Other Entertainment n/a Spectator Events ' excluding lead tenant Flat Floor / Other Rentals n/a n/a Total n/a n/a excluding lead tenant n/a n/a 58 68

22 Prospective Based Operations Expanded Crystal Alternative Centre Base Scenario Scenario (GP Storm) (WHL) Base Revenues $ 980,000 $ 980,000 Additional Revenue Naming Rights $ 127,500 $ 148,800 Luxury Suites 255, ,000 Event Income 150, ,000 Concessions / F & B 134, ,000 Tenant - 64,800 Office Lease 23,200 23,200 BFCG 183, ,300 Total Additional Revenue $ 873,000 $ 1,200,100 Total Revenue $ 1,853,000 $ 2,180,100 Total Expenses $ 2,820,000 $ 2,820,000 Net Operating Position $ (967,000) $ (639,900) Average Operating Position $ (1,283,600) $ (1,283,600) Better / (Worse) $ 316,600 $ 643,700

23 Impact Assessment ONE-TIME IMPACTS Spending Employment Income Jobs Federal / Provincial Tax Revenue $65.8 million $30.7 million 275 FTE $5.7 million ANNUAL IMPACTS Spending Employment Income Jobs Federal / Provincial Tax Revenue $1.7 million to $4.1 million $300,000 to $1.1 million 10 FTE to 30 FTE $800,000 to $1.0 million 5-YEAR CUMULATIVE IMPACT Spending Employment Income Jobs Federal / Provincial Tax Revenue $8.9 million to $21.6 million $1.6 million to $5.8 million 50 FTE to 150 FTE $4.2 million to $5.3 million ASSOCIATED BENEFITS Enhaced sport and event hosting ability Increased spending by visitors Incremental investment / economic development impacts

24 Operating Model Assessment Options considered: full public ownership and operation (Option 1) public ownership with contracted private operation and management (Option 2) public ownership and operation with certain functions contracted to third party (Option 3) Generally, impetus for considering move from Option 1 is the replacement of an older arena facility with a newer spectator / events centre Rationale for considering private management / operating functions access to entertainment industry cost efficiencies revenue maximization management efficiencies marketing / branding expertise pre opening services and support separation of municipal responsibility

25 Operating Model Assessment Under all options net financial responsibility rests with municipality In addition, facility manager paid a fee (in addition to having all salary and operating expenses paid from facility operations) depending on nature of relationship, fee can range from $150,000 to $250,000 plus incentives few instances exist where facility manager at risk for facility operations while operator will manage the facility pursuant to the terms and conditions set out in its management contract, the operator will not assume risk for individual event promotion Pros and cons exist with all options

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87 BUILDING AREA SUMMARY Bowes Family Crystal Gardens Existing ground floor 2,622 m 2 28,224 ft 2 New ground floor 1,710 m 2 18,406 ft 2 65% increase TOTAL AREA Bowes Family Crystal Gardens 4,332 m 2 46,630 ft 2 Canada Games Arena Existing ground floor 3,223 m 2 34,692 ft 2 New ground floor 2,505 m 2 26,964 ft 2 78% increase Existing concourse level 1,630 m 2 17,545 ft 2 New concourse level 1,026 m 2 11,044 ft 2 63% increase Existing third floor 150 m2 1,615 ft 2 New third floor 1,276 m 2 13,735 ft 2 850% increase Existing bleachers 2,095 m 2 22,550 ft 2 New bleachers 560 m 2 6,028 ft 2 27% increase Total existing building 7,098 m 2 76,402 ft 2 Total new building 5,367 m 2 57,771 ft 2 75% increase TOTAL AREA Canada Games Arena 12,465 m 2 134,173 ft 2 Crystal Centre Total existing area 9,720 m 2 104,626 ft 2 Total new area 7,077 m 2 76,177 ft 2 73% increase TOTAL AREA 16,797 m 2 180,803 ft 2

88 PRELIMINARY BUDGET ASSESSMENT Bowes Family Crystal Gardens base building estimate $10,665,720 Canada Games Arena base building estimate $18,640,280 TOTAL BASE COST $29,306,000 Design contingency of 10% $2,930,600 Construction contingency of 10% $2,930,600 Cash allowances Electronics to media room $50,000 Kitchen equipment and warm up plates $250,000 General equipment sports, gym, etc. $350,000 Tannoy and speaker systems $75,000 Upgrade fire alarm systems $150,000 Total cash allowance $875,000 Provision for parking lot adjustments $1,000,000 SUB TOTAL $37,042,200 FF&E allowance $3,000,000 Planning, design and project management fees $4,004,200 TOTAL PROJECT COST $44,046,400

89 Impact Assessment ONE-TIME IMPACTS Spending Employment Income Jobs Federal / Provincial Tax Revenue $65.8 million $30.7 million 275 FTE $5.7 million ANNUAL IMPACTS Spending Employment Income Jobs Federal / Provincial Tax Revenue $1.7 million to $4.1 million $300,000 to $1.1 million 10 FTE to 30 FTE $800,000 to $1.0 million 5-YEAR CUMULATIVE IMPACT Spending Employment Income Jobs Federal / Provincial Tax Revenue $8.9 million to $21.6 million $1.6 million to $5.8 million 50 FTE to 150 FTE $4.2 million to $5.3 million ASSOCIATED BENEFITS Enhaced sport and event hosting ability Increased spending by visitors Incremental investment / economic development impacts

90 REPORT RECOMMENDATIONS Re-invest in the Crystal Centre to suit the market Expand in a single, sequential phase Confirm the operating model Make immediate improvements to the roof higher load capacity rigging grid more extensive catwalk system Move forward on next steps detailed review of funding opportunities higher level of economic impact traffic/parking study

91 Questions on today s presentation