CRYSTAL CENTRE COUNCIL UPDATE PRESENTATION

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

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

REVIEW OF MARCH 7 TH OPEN HOUSE

ECONOMIC ASSESSMENT

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

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

Existing Situation Canada Games Arena 2008 2009 2010 2011 2012 Average Canada Games Arena Lead Tenant 31 35 28 31 29 30.8 Concerts 6 2 4 4 3 3.8 Family Shows 8 11 4 0 1 4.8 Other Sports 0 21 2 23 1 9.4 Other Entertainment 5 5 3 0 2 3.0 Total - CGA 50 74 41 58 36 51.8 excluding lead tenant 19 39 13 27 7 21.0 Bowes Family Crystal Gardens Events 34 32 32 24 28 30.0 Event Days 113 92 111 80 86 96.4 Total Events 163 166 152 138 122 148.2

Existing Situation comparison with other markets Grande Prairie Dawson Creek Lethbridge* Abbotsford Sault St. Marie Kingston 2010 2011 2010 2011 2010 2011 2011 2011 2011 Lead Tenant 31 29 18 23 36 36 41 34 37 Concerts 4 3 12 7 n/a n/a 13 5 19 Family Shows 0 1 1 1 n/a n/a 10 0 14 Other Sports 23 1 13 4 n/a n/a 3 27 5 Other Entertainment 0 2 1 1 n/a n/a 7 3 9 Spectator Events 58 36 45 36 50 50 74 69 84 excluding lead tenant 27 7 27 13 14 14 33 35 47 Flat Floor / Other Rentals 111 80 22 29 n/a n/a 14 23 21 Total 169 116 67 65 n/a n/a 88 92 105 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

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

Needs Assessment & Market Analysis Grande Prairie Lethbridge Medicine Hat Red Deer Dawson Creek Alberta Canada Population 2012 86,600 109,800 78,900 104,000 11,600 3,817,800 34,931,600 2017 96,900 115,900 84,000 119,400 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) 0 14 21.3% 18.6% 18.4% 12.4% 19.2% 18.3% 16.2% 15 64 71.4% 66.9% 67.4% 77.4% 67.9% 70.6% 69.0% 65+ 7.3% 14.5% 14.2% 10.2% 12.9% 11.1% 14.8% Households 2012 31,300 43,700 32,200 41,600 4,900 1,489,400 13,987,100 2017 35,000 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 $85,800 2017 $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 $23,400 2017 $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%

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

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

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)

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

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 2008-13 Bookings 7.5 5.8 1.2 11.5 3.7 29.7 Average Dates 33.7 13.7 2.2 35.5 13.0 98.0 Expanded Bookings 10.0 10.0 100.0 15.0 5.0 140 BFCG Dates 50.0 25.0 150.0 45.0 15.0 285 Increase from avg 33.3% 71.4% 8471.4% 30.4% 36.4% 371.9% from max 0.0% 11.1% 4900.0% 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

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 5,102 82.5% 46,061 53,229 9.1% 7.9% Calgary 8,965 19,289 46.5% 1,096,833 1,214,839 0.8% 0.7% Chilliwack 3,810 5,000 76.2% 77,936 92,308 4.9% 4.1% Edmonton 5,720 16,839 34.0% 812,201 1,159,869 0.7% 0.5% Kamloops 4,397 5,658 77.7% 85,678 98,754 5.1% 4.5% Kelowna 5,982 6,507 91.9% 117,312 179,839 5.1% 3.3% Kootenay 2,761 4,654 59.3% 19,319 25,037 14.3% 11.0% Lethbridge 3,569 5,479 65.1% 83,517 105,999 4.3% 3.4% Medicine Hat 4,006 4,006 100.0% 60,005 72,807 6.7% 5.5% Moose Jaw 2,889 3,146 91.8% 33,274 34,412 8.7% 8.4% Prince Albert 2,278 3,299 69.1% 35,129 42,673 6.5% 5.3% Prince George 2,270 5,967 38.0% 71,974 84,232 3.2% 2.7% Red Deer 5,117 5,858 87.4% 90,564 90,564 5.7% 5.7% Regina 4,429 6,336 69.9% 193,100 210,556 2.3% 2.1% Saskatoon 4,916 11,310 43.5% 222,189 260,600 2.2% 1.9% Swift Current 2,168 3,239 66.9% 15,503 17,535 14.0% 12.4% Vancouver 7,620 16,281 46.8% 603,502 2,313,328 1.3% 0.3% Victoria 5,386 7,400 72.8% 80,017 344,615 6.4% 1.5% WHL Average 4,633 66.1% 5.6% 4.5% Grande Prairie 3,800 5,000 76.0% 55,032 82,767 6.9% 4.6%

Canada Games Arena Recommended Sizing Projected event calendar 2008-2012 Average Projected Number of Events GP Storm WHL Projected Growth Lead Tenant 30.8 30 38 0-8 Concerts 3.8 8-10 8-10 4-6 Family Shows 4.8 6-8 6-8 1-3 Other Sports 9.4 4-6 4-6 (3) - (5) Other Entertainment 3.0 4-6 4-6 1-3 Trade & Consumer Shows / Other rentals 0.0 12 12 12 TOTAL 51.8 64-72 72-80 12-28.0 excluding lead tenant 21.0 34-42 34-42 12-20

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 30 38 23 36 41 34 37 Concerts 8-10 8-10 7 n/a 13 5 19 Family Shows 6-8 6-8 1 n/a 10 0 14 Other Sports 4-6 4-6 4 n/a 3 27 5 Other Entertainment 4-6 4-6 1 n/a 7 3 9 Spectator Events 52-60 '60-68 36 50 74 69 84 excluding lead tenant 22-30 22-30 13 14 33 35 47 Flat Floor / Other Rentals 12 12 29 n/a n/a 23 21 Total 64-72 72-80 65 n/a n/a 92 105 excluding lead tenant 34-42 34-42 42 n/a n/a 58 68

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 255,000 340,000 Event Income 150,000 150,000 Concessions / F & B 134,000 290,000 Tenant - 64,800 Office Lease 23,200 23,200 BFCG 183,300 183,300 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

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

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

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

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

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

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

Questions on today s presentation