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A closer look at the costs associated with a new performing arts centre

by on June 27, 2017
Evita

The new performing arts centre will be accessible to local groups like Blind Faith Productions.

In discussing the new regional performing arts centre project, some of the most common questions we receive are, understandably, about the costs associated with the new facility. I would like to address some of those concerns, and some common misconceptions.

Perhaps our most frequently asked questions are about how much it will cost to build a new, state-of-the-art performing arts centre, and who will pay for it.

Like hospitals, prisons, and other specialized infrastructure, performing arts centres are deceivingly complicated buildings. The scope of our project is what you would expect of a regional facility, and it certainly will not be built to the scale or finish of a major national or international institution. But it is still expensive. The preliminary capital project budget is $51.3 million – this is an “all-in” estimate that includes the cost of the site, construction, soft costs, planning and a nine per cent contingency.

As for where the money will come from, the City of Fredericton has agreed to invest $14 million from its long-term financial planning, as well as the site. We have requested a combined $28 million investment from the provincial and federal governments’ infrastructure programs, without which we cannot proceed. The remainder will be raised from local governments and private donors.

Just to offer some context for these numbers, in 2018 dollars, the overall cost for the Grant Harvey Centre was $37 million, Willie O’Ree Place was $22.4 million, and the Fredericton Convention Centre and East End Parking Garage cost $53 million, according to the City of Fredericton.

I know some people are concerned about the operating costs associated with the new performing arts centre. In fact, the net operating costs of the new centre will be similar to the net cost of operating the current Fredericton Playhouse.

Given the size and configuration of the new building, the operating and maintenance costs per square foot will actually drop significantly, especially when it comes to energy consumption and maintenance costs, which are very high in the current Playhouse.

Costs for staging events will remain the same, and while overhead costs will increase marginally, revenues will also increase thanks to the greater capacity of the new facility.

I can also assure current and future Playhouse patrons that ticket prices will not increase in the new building. As I mentioned earlier, the capital cost of the new performing arts centre will be fully funded by contributions from public and private sources, which means there will be no reason to increase ticket prices or service charges to pay for the initial construction of the facility.

Actually, since net operating costs will remain constant and seating capacity will increase, some events with fixed production costs may even be able to reduce their ticket prices.

Many local organizations may wonder if they will be able to afford to use the new performing arts centre. I want to affirm that the new centre will indeed be accessible to these groups. This is a strategic priority for our organization, and having a facility that meets the needs of the local community is at the heart of the whole project. Since the new centre will have two theatres – an 850-seat theatre, as well as a 300-seat flexible venue – as well as other usable spaces, this building will be even better suited to a variety of uses by various local arts organizations.

The revenue projections in the operating budget pro formas for the new facility assume that the cost of using the facility will remain similar to the cost of renting the existing Playhouse.

Residents may also be concerned that the new performing arts centre will cause their property taxes to increase. As mentioned, the City of Fredericton’s contribution will be allocated from its long-term financial plan, which includes a policy that allows for borrowing money within a self-imposed eight per cent debt servicing ceiling. Because the City’s contribution will be made within this context, the project will not affect the City’s annual operating budget and therefore will not have any direct impact on property tax rates.

With such a major undertaking, it’s understandable that residents will have questions and concerns about costs. Our plan has always been to deliver a project that is responsible, sustainable and appropriate for our community. As we move forward, we remain committed to keeping these values as our guide and to be open and transparent about the costs and investments associated with this regional project.

Greg MacFarlane is the Vice-President of Fredericton Playhouse Inc.’s Board of Directors.  

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2 Comments
  1. Stephen Patterson permalink

    Who is in charge of the new project, The Playhouse Board of Directors or the City? What will happen to the Playhouse once a new PAC is built? What happened to the argument that the Convention Centre and new hotel would benefit from proximity to the Playhouse? I am a strong supporter of the arts in Fredericton, but I have not yet seen a convincing case for a new performing arts centre, especially as proposed.

  2. Thanks for the comment Stephen.

    This is Fredericton Playhouse Inc.’s project, but given the organization’s operational relationship with the City of Fredericton and its responsibility for the infrastructure, the City is naturally a major partner and is committed to its realization.

    From our FAQ (http://www.theplayhouse.ca/wp-content/uploads/2015/11/Frequently-Asked-Questions.pdf):

    WHAT WILL HAPPEN TO THE EXISTING PLAYHOUSE AND THE LAND IT OCCUPIES?
    The proposed performing arts centre will supplant the current Playhouse for use as a performing arts facility. As such, it would be decommissioned. Fredericton City Council will ultimately decide what to do with the existing building and land. The City Centre Plan and other civic planning goals would guide such an important decision. There are several options including: divestiture of the property, creative development projects, and partnerships with non-profit, public or private sector organizations. Given the prominence of the site in the downtown, a use that yields a high public benefit would be most desirable.

    The major benefit of the current Playhouse’s proximity to the Fredericton Convention Centre is an indoor route to the East End Parking Garage. Although the two facilities are complimentary to one another, there has never been any real synergies in terms of their programming and usage and we don’t expect that to change.

    You can learn more about this project (including the feasibility studies, information on the current Playhouse’s condition, etc.) here: http://www.theplayhouse.ca/pac/

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