By Al Beeber - Lethbridge Herald on November 25, 2023.
The Lethbridge and District Exhibition is expected on Tuesday to tell city council it is formally asking the City of Lethbridge for financial assistance and to immediately take over the old pavilions.
Mike Warkentin, Chief Executive Officer of the Exhibition, will be making a presentation asking the City for a capital grant in the amount of $6,742,315.72 or a capital grant in the amount of $2,081,093 to cover the unfunded capital of construction and a four-year debt deferral to be repaid on the back of the loan, totalling $4,671,309.72.
The presentation says the original approved budget for the new Agri-food Hub and Trade Centre was $70,600,000.
The forecasted budget projection at completion of the Hub is $77,342,315. That total includes $5,574,487.82 in project escalation and $1,167,827.18 in fiscal year 2023 debt servicing which the Exhibition says should have been included in the original budget. The cost of construction is a 7.89 per cent increase over the original projection. According to the Exhibition, this compares to a provincial average for the same construction window of 15 to 20 per cent.
The Exhibition says rising interest rates have impacted the organization. In August, 2020 the interest rate was 2.2358 per cent and the expected annual blended payment was $818,691.13.
By June 15 of last year, the interest rate had risen to 5.11 per cent and the actual blended payment was $1,167,827.18, an annual increase of $349,136.06 or 42.65 per cent.
In addition to the higher annual change due to interest rates, the Exhibition is dealing with a $400,000 annual change due to “building specific operational requirement” and an unbudgeted operating expense of $400,000 due to the old pavilions.
It also states that the tourism industry hasn’t recovered from the impact of the COVID-19 pandemic and the commercial leases absorption rate is slower than expected.
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