The Southeast Event Centre will cost nearly $20M more than initially expected.
On Tuesday, Steinbach City Council awarded the construction tender to Graham Construction and Engineering Inc. for a guaranteed maximum price of $61M.
And, Councillor Michael Zwaagstra says this doesn’t even come close to the three original bids submitted by construction companies in September.
“The initial lowest bid came in at $75M and then you have to add an extra $5M or so to come to about $80M and that was simply outside of our price ability."
Approximately $5M will also be needed for some redesign work, land costs, and site work that is outside of construction.
Back in October of 2019, when the City of Steinbach committed $10M to the project and began looking for funding from the provincial and federal governments, the project estimate was $42.5M, however, prices have risen sharply in the last three years. The city received funding from other levels of government in 2021.
So, how have all the parties involved managed to shave $14M off the project?
Well, City Manager Troy Warkentin notes “the key areas of revision include changes to mechanical and electrical components and specifications, building envelope finishes, and site revisions.” He adds “We are committed to maintaining, as much as possible, the original functionality, architectural integrity and finishes at least from the public perspective that have always been a part of the project.”
As an example, Warkentin says one of the options the team has been looking at is deleting the new ice plant from the project which would have added capacity and redundancy. Instead, they may modify the existing ice plant to run both rinks.
Warkentin says they are also now planning to build the SEC in one phase instead of two, which will provide significant cost savings.
“In order to proceed in one phase, this would require the demolition of the existing Centennial rink during the summer of 2023 and result in only one ice surface, the TG Smith rink, being available for use during the 2023/24 winter season. This would reduce the availability of ice for all community-based ice programming for the next winter season.”
Even with all of these savings, $61M is still $20M more than initially anticipated.
To make up these funds, Steinbach City Council passed a resolution on Tuesday, committing a further $13M to the project, bringing the city’s total contribution to $23M.
$11.3M will come from the city’s reserve funds, $1.785M, will come from the operating fund, and the city has authorized additional borrowing capacity as a contingency as well.
The Southeast Events Group has also stepped up and committed an additional $10M, bringing private contributions to $25M as a whole.
Zwaagstra notes, “yes, we are contributing more than we planned to contribute initially, but we are still only contributing approximately 35% of the total cost of this project. We are contributing just over one third and we are getting an incredible event centre."
Councillor Susan Penner also weighed in, saying “every effort has been made to reduce the cost of the project without reducing the scope. She adds “we can still pay it off in five years and as it currently stands, it will not have a further impact on mill-rate.”
Construction should get underway in January with the Centennial Arena set to be torn down in summer. Warkentin says the completion of the project is anticipated by the fall of 2024.