The organization that manages Mosaic Place expects the live events and concert industry to improve next year, which is why it wants a subsidy increase of over eight per cent.
City council provided Mosaic Place with a subsidy of $864,307 in 2021. However, after including $275,000 in bailout money, a $100,000 loan for food and beverages, and the equipment reserve account of $205,000, total funding jumped to $1,444,307.
Spectra Venue Management Services believes this year it will see revenue of $2,162,986 and expenses of $2,848,753 based on projected paid attendance of 95,500 and 127 events.
If its management and incentive fees of $157,677 are included, along with the food management fee of $42,000 and loan repayment of $50,000, then the subsidy Spectra wants next year is $935,444. This is an increase of $71,137 or 8.23 per cent from this year.
However, if the equipment reserve is included, the actual subsidy totals $1,135,444.
During the Dec. 13 budget meeting, city council voted 5-1 to approve the 2022 Mosaic Place budget and allow the venue to repay the food loan over two years.
Coun. Dawn Luhning was opposed.
Mayor Clive Tolley was absent.
Council discussion
It will be imperative to receive timely quarterly updates next year on how Mosaic Place is doing because while the industry might not return to normal for another six to eight months, said Luhning. She didn’t know how long council could continue to “toss” the venue huge amounts of money without revenues picking up.
“There are all kinds of other priorities and responsibilities at the city, and it’s tough — for me — to continue to keep funding,” she added. “I’m going to need some in-depth reporting … to know where we’re at.”
The subsidy request of $935,444 is always what Coun. Heather Eby thought Mosaic Place needed to run effectively, she said. She accepted that number, noting there is no room for error in the venue’s budget next year; events and concerts must be full even during poor weather.
It would be a good news story next year if the venue recovered 70 per cent of its costs as predicted, she added. Meanwhile, providing the loan is really the city giving itself a loan since Mosaic Place is a municipal building.
Two-year repayment
The idea that Spectra could repay the $100,000 over two years came from city manager Jim Puffalt, who told council that customer numbers have not returned to pre-pandemic levels. Deferring the repayment ensures that Mosaic Place can repay the remaining portion in 2024, when customer numbers should return to normal.
The in-house food and beverage operation is a “profit centre” that could generate more than $110,000 a year in revenue, but once crowd sizes improve, that service could generate another $200,000, Puffalt added. This is all dependent on external factors such as the pandemic and people attending events.
Opportunities for growth
Ryan MacIvor, general manager of Mosaic Place, said that while revenues have increased this year, there is room to grow those finances and opportunities to grow services and activities. He acknowledged that that is dependent upon people coming back to the venue.
Some variables could affect Mosaic Place and the live concert/event industry next year, he continued. These include public health orders, consumer confidence, food costs, labour shortages, asset management, inflation, supply chain issues, pandemic costs, advertising and sponsorship rights, the carbon tax, increased utilities, salary increases, and revenue increases in ice rentals, tickets, food and naming rights.
MacIvor added that Spectra has secured three concerts for Mosaic Place next year and could acquire more.
