REGINA — Brandt Properties Ltd. has moved one step closer to purchasing several assets at the Regina Exhibition Association Limited (REAL) District after the city's executive committee voted 7-4 to move the deal to next week's council meeting for final approval.
On Friday, Regina announced a proposed agreement for Brandt to acquire several city-owned buildings at the REAL District, including the Brandt Centre, the Canada Centre Building, the Queensbury Centre, and the Agribition Building.
Brandt intends to pay $6.5 million for the acquisition of the building and the land surrounding it. City administration had said the value of the purchase would be at full-market price.
Details of the deal
If council approves it next week, Brandt would take over REAL assets in phases.
The sale of the Canada Centre/Avana Centre would close by July 1 of this year followed by the remaining buildings by Sept. 1, and finally the subdivision and land sale by Dec. 31, 2027.
Brandt is also proposing to lease the International Trade Centre (ITC) at a rate of one dollar per year, maintaining operations while also contributing to a capital maintenance reserve of $550,000 yearly, which can be adjusted based on inflation.
As part of the agreement, Brandt has to invest $15 million into REAL within two years of the acquiring all the buildings.
In the current package rendering, the majority of the investment — at least $10 million — would be directed toward upgrades at the Brandt Centre, such as new building entrances and an improved sound system, among other enhancements.
Failure to invest in this timeframe would result in the city taking back the purchased assets.
Despite selling the buildings, the city would still be on the hook for several items.
Regina is required to invest $6 million in the first year of operational costs, followed by $3 million in the second year. The city will also invest $500,000 per year to share parking, services and access with Brandt for Canadian Western Agribition and Queen City Ex.
In this deal, Brandt would oversee both events, but the Queen City Ex would only continue operating if it’s commercially viable.
Regina also plans to commit upwards of $4.5 million for capital upgrades for parking lots and access improvements completed by Brandt within 12 months of the deal closing.
In terms of property tax, Brandt would receive a five-year exemption.
City council could approve further exemptions down the line. If not approved, Brandt would receive an operating grant equal to the municipal and library portions of the taxes applied to the ITC and the Brandt Centre, and 95 per cent of the taxes applied to other purchased assets operated directly by Brandt.
Along with properties, Brandt would take on nearly 700 REAL employees.
Perspective of former politicians
The city is expected to save $79 million in operating and capital costs over five years from the deal. However, it has not identified how it will cover the remaining costs, which would likely require mill rate increases.
Daren Anderson, Regina’s chief financial officer, said the transaction would reduce taxpayer subsidies currently paid for the operation of the campus by $115,000 per week or $6 million per year.
Pat Fiacco, former Regina Mayor, said he wished Brandt had made this offer when he was in office.
Fiacco said the city continuing to make significant investments in REAL to preserve the status quo would continue to place a burden on taxpayers.
“This proposal shifts the financial burden away from the taxpayer and onto the private sector.”
While in office, Fiacco had multiple years of 0 per cent mill rate increases.
Fiacco also called this move a “game-changer” for the entertainment, business and experience side of the community.
“This is going to be one of the legacies council leaves the City of Regina.”
Terina Nelson, former councillor, said this deal provides financial stability for capital costs for REAL buildings, something the city couldn’t manage.
“Many of the facilities in question are decades old and require substantial reinvestment with no identified funding source under the current model we have.”
Nelson was blunt, admitting REAL “isn’t a fun place to go to. It is not an experience.”
A vision
Shaun Semple, CEO of Brandt, said this move will turn the REAL district into a “year-round destination.”
“One that brings people together not just for major events, but consistently week after week, month after month and experiences that guests will not forget."
Semple said the proposed $113 million investment into the REAL District, with the already planned $30 million funding for the new Queen City Distillery, is the largest private sector investment in Saskatchewan’s history.
Semple called the investment “like winning the lottery” today.
“This is the only deal that I’ve ever seen anywhere where a private citizen is giving you money to take over your assets."
He also described having to throw everything at this project to make it work, as REAL has recorded profit losses year after year.
“I don’t want to go into this with any false expectations. This is going to be tough.”
Before Regina hosts the Grey Cup in 2027, Semple said he wants to ensure exterior upgrades to the Brandt Centre are completed.
Delaying
Ward 8 Coun. Shanon Zachndiak put an amendment forward to delay the decision until potentially June 10.
Her amendment seeks to secure an independent third-party review and address outstanding questions related to the agreement.
“I’m looking for a review of the whole package,” said Zachndiak, as city administration has done a review for the market value and building assessment.
Ward 6 Coun. Victoria Flores said this review would “protect our decision.”
“This is a really big deal, this is a forever deal.”
She added, “There is merit for a third party saying ‘yes, this is a great deal.”
When asked about a delay, Semple said this would create a two-fold challenge.
“The proposal in front of you that we spent six months negotiating with administration that you’ve hired to do that job," as he wouldn't budge on months more of talks.
Semple also said this acquisition goes beyond buildings, as it has implications for people’s jobs.
“The longer it drags, the more uncertainty there is.”
Semple said that clarity around Brandt’s intentions and the wages offered to employees would help improve their situations.
Anderson said receiving all this information could take six months.
The amendment was defeated 7-4.
After the meeting, Mayor Chad Bachynski said he is confident in the terms of the agreement.
"I'm confident in the work that was done. I'm confident that we led the way in terms of who we engaged as experts and determining the evaluations."
Bachynski said his decisions primarily focused on the overwhelming pros, including removing the city's liability for capital.
"We're offloading $80 million worth of risk in terms of the facilities that we want as a community to make sure they continue to operate."
