Southeast Event Centre budget increases by another $8 million

The Southeast Event Centre will cost $8.153 million more than the previously approved budget of $61 million.  

After Steinbach City Council’s meeting on Tuesday, the project now has an approved budget of $69 million. 

In November of 2022, after tendered bids for the Southeast Event Centre came in significantly over budget, the City of Steinbach and Graham Construction entered into an agreement to re-design and construct the Southeast Event Centre.  

At that time, their target for the final construction budget was $61 million.  

The City says a list of redesign scopes was created in hopes to produce an alternate building that could be constructed for $61 million. These changes would represent $14 million in cost reduction from the original tender value of $75.3 million Graham Construction initially submitted on September 13, 2022.  

Design consultants were retained to work through the redesign process with Graham Construction and the City of Steinbach, with the expected timeframe of four months to complete the design changes.  

An added benefit of this plan was the re-working of the original construction phasing, pulling forward the anticipated project completion and opening date from Spring 2025 to Autumn of 2024.  

However, there were some unexpected constraints that became apparent, which the City says influenced many of the decisions relating to redesign opportunities.  

The redesign timelines extended from the planned four months to a full year, and the level of effort to keep costs down by all parties involved was extensive.  

Deputy Mayor Michael Zwaagstra thanks city staff for all the work they put into this project. 

“I believe that our staff have been as diligent as possible here. This has not been an easy process, but they've been working with our consultants to try to bring down costs as much as possible.” 

As the redesign opportunities minimized, and the redesign schedule extended, the City says the $61 million budget was becoming increasingly difficult to reach without significant changes to the original vision the City and community had for this building.  

More cost-saving options were proposed, but those changes contradicted the initial intent and long-standing desire of the ownership group for the building.  

Also, building efficiency and the desired long-term operational functionality of the building would be compromised, which would potentially impact federal funding.  

Zwaagstra says that with the nature of this project, they are not going to ‘cut corners’ and take out key components. 

“If we started taking any of those components out, we potentially put at risk the funding that we got from other levels of government, not to mention the contributions we're receiving from the private sector.”  

The City says that due to these factors, several significant cost-saving redesign opportunities were rejected.  

The redesign process is now complete, and the updated project budget has become $69.153 million, which factors in all of the changes that were made and that will be incorporated into the final design of the building. 

Without compromising the original design intent and finished Southeast Event Centre, about $6.2 million in cost savings has been achieved from the original tender value of $75.3 million.  

Council approved additional funding of $8.5 million for the project.  

Zwaagstra says some of the funding will come from their operating funds and reserves, but there is also additional provincial funding that came in, and $1 million of that is from the province specifically designated towards this project.

“The funding from the provincial and federal governments has now increased to $18.5 million. Back when the price had increased to $61 million, we had also gotten extra funding commitments from our private donors up to $25.5 million.” 

To cover the additional $8.5 million needed in funding, $1.55 million will be provided through the General Operating Fund, $3.6 million will come from new provincial grant funding, $850,000 will be from the L&B reserve fund, and $2.5 million will be provided through a debt issue.  

Zwaagstra notes that taxpayers are still getting a good deal on the Event Centre. 

“We're still on the whole getting a good deal in that we are contributing less than half of the total cost.” 

The target completion date for construction remains late 2024.

The construction site of the Southeast Event Centre as of mid-December. Photo courtesy of Graham Construction.

 

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