City to pay more than $1M to cover convention centre loan payment

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This article was published 19/03/2023 (402 days ago), so information in it may no longer be current.

THE City of Winnipeg will pay more than $1 million this year to cover an annual loan payment for the downtown convention centre.

A memo to council notes the city will provide roughly $1.3 million of hotel tax revenue by the end of March to cover the annual payment on a $33-million loan guarantee. The tab is linked to the convention centre’s expansion several years ago, which the city has used hotel tax dollars to support every year since the first charge came due in 2017.

The agreement does require the centre to pay the money back.

Coun. Jeff Browaty, council’s finance chairman, said it’s not surprising the money is needed again.

“This is the portion of the convention centre expansion that was contingent on being successful with the addition of a new hotel next door,” said Browaty.

The city loan guarantee was created following a $180-million expansion of the convention centre, which was officially completed in 2016. A hotel was supposed to open the same year, triggering $17 million of new convention centre business and $16 million of tax revenues to support the project.

Instead, a proposal wasn’t secured for years.

The Sutton Place Hotel is now under construction adjacent to the convention centre at the northwest corner of Carlton Street and St. Mary Avenue.

It is slated to open in 2025, the company’s website says.

Browaty said the fact large events have resumed since the peak of the COVID-19 pandemic should help to improve the financial picture.

“My understanding is business is back at the convention centre… In terms of the destination marketing reserve (hotel tax) funds to pay (for) this, hotel taxes have come back (too), room rates are healthy. There’s not real concern on that front anymore,” said Browaty.

While the expansion project wasn’t able to secure a hotel in time to meet its original financing plan, Browaty said pairing the expansion with that development did make sense.

“If Winnipeg wanted to continue to be a top-tier city to host events, we really needed the convention centre expansion… With that convention centre expansion, we also did need additional hotel rooms… So tying them together, I don’t think, was the worst idea,” he said.

Council approved the loan repayment strategy in 2015.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga