The City of Winnipeg will spend another $1.2 million this year to cover a loan guarantee payment for the pandemic-stricken Winnipeg Convention Centre Corporation (WCCC).
The city has used hotel tax dollars to cover the annual repayments on a $33-million loan guarantee, which is linked to the convention centre’s expansion, since the first charge came due in 2017. The corporation is required to pay the money back.
While WCCC had hoped to cover at least part of this year’s payment itself, the pandemic instead wiped out the vast majority of its business last year, according to its president.
"What’s really disappointing is we have seen year-over-year growth since expansion and 2020 was projecting to be one of our best convention years ever. It potentially would have put us in a position where we could have, at a minimum, made a partial payment. Unfortunately, that business (was) cancelled and postponed," said Drew Fisher, the corporation’s president and chief executive officer.
Losses from COVID-19, which began forcing convention cancellations and postponements in March 2020, led revenues to plummet about 75 per cent lower than first expected, he said.
The city loan guarantee was created following a $180-million expansion of the convention centre, which was officially completed in 2016. A hotel was supposed to arrive the same year, triggering $17 million worth of new convention centre business and $16 million of tax revenues to support the project, but wound up being delayed.
The hotel delay is a key reason the centre relied on the city for loan payments prior to the pandemic, Fisher said. A Sutton Place Hotel, now under construction north of the convention centre as part of True North Square, will produce tax dollars to support the expansion, he said.
"There is a strong foundation on the books and we will get back to a successful future," said Fisher, noting 80 per cent of the centre’s lost business has already been rebooked for future years.
The corporation has managed to avoid drawing money from a separate $7.5-million city loan guarantee that council approved for the convention centre in June to help offset its pandemic losses, he said.
As COVID-19 continues to hinder the economy, it’s likely a full rebound for the convention centre will take time, so the city should support the centre’s recovery, since it creates substantial positive spinoffs for other businesses, said Coun. Scott Gillingham, chairman of city council’s finance committee.
"It attracts business to our community, it attracts tourism dollars... it really generates a significant impact on the local economy when the centre is fully operational," he said.
Born and raised in Winnipeg, Joyanne loves to tell the stories of this city, especially when politics is involved. Joyanne became the city hall reporter for the Winnipeg Free Press in early 2020.