To the editor:
I am not sure that I understand why people are shocked at the Omischl Arena.
There was no good reason in December 2202 to believe that the $51.6M costing for the arena was reasonable or accurate. Six months prior to that time, we had been discussing a $52M arena whose construction cost was between $32M-34M. The Class A cost estimate in December 2022 had a total cost of $51.6M with an estimated construction cost of $43.5M.
The construction cost went up by $10M while the overall estimated cost went down by $400K. This discrepancy between the upward change in the construction cost and the downward change in the overall cost should have been a red flag.
So now we are looking at a likely total cost (conservatively speaking) of $81,430,900 of which $70,800,000 would be the construction cost.
Total cost has been calculated as follows:
- Construction $70,800,000
- Contingency (@5.8%). 4,106,400
- Allowances (Unchanged) 2,520,000
- Architect 2,520,000
- Interest (9.1 m @ 4.4% For 20 yrs). 4,004,000
Total: $81,430,900
All costs included here are those associated with the Omischl rink project which would be avoided if the project were not to succeed.
The interest cost would be incurred because $9.1M of the cost would be borrowed. The interest cost would be avoided if the project were not to proceed.
I did not change the figure for the “Allowances” however I am of the opinion that the $2.52M figure is probably low.
If the City Council wishes to proceed with the Omischl Arena, they should be voting on an $81 million project, not upon the $71 million project discussed in the press.
Reducing the scope of the project is likely not a plausible option. The unique design of the arena is a consequence of the local geology. Ten million in the improvements were a consequence of the federal grant of $25M. We should now accept that the Omischl Arena is the wrong arena in the wrong place. It's time to start from scratch.
Respectfully,
Randall Tilander
