While it may be frosty on game day inside the Sudbury community arena, things got heated in council chambers on Tuesday when talk turned to the management of the Elgin Street barn.

Council debated for nearly two hours a proposal that would see Dario Zulich, through a numbered company (1930178 Ontario Ltd.), which is essentially the Sudbury Wolves hockey club, take over operations of the arena.

Essentially, Zulich said in negotiations with the city he wanted to manage the box office and operations of the arena, which includes hockey and non-hockey related events. He would assume control over expenses and revenues, and was asking the city to contribute financially. Zulich already has an agreement with the city and has been handling concessions at the arena. He was simply looking for an amendment to the current contract.

Currently, the Elgin Street arena loses about $540,000 annually.

Ward 1 Coun. Mark Signoretti initially asked for a deferral. He said he did not think it was appropriate for council to consider Zulich’s proposal to take over the operations while they wait for the report on the new events centre location, which is due to go before council on June 27. His request, however, was denied as most councillors voted to move forward with a decision.

Ward 3 Coun. Gerry Montpellier said he was against Zulich taking over the arena. For one thing, laying off students goes against the city’s goal to retain young people. Secondly, Montpellier said Zulich lacks experience and the whole deal harkens back to the days of the transit ticket scandal.

“To transfer city employees to a contractor, setting us up for grievances, payouts, etc. is something I can’t get into,” he said. “The city arena is owned by the city, it should be run by the city … This unnamed company shows no experience of ever running a popcorn stand, a chip stand, promoting events or anything. This proposition has us handing over the keys to a non-experienced company. … I’ve seen this picture before and it turned out to be the bus scandal affair … I truly feel it’s a carbon copy.”

Staff said there are 38 part-time staff and two full-time non-union staff who could be impacted by the agreement. Andrew Dale, the vice-president of marketing with the Sudbury Wolves, said last week his company would be looking to grow the workforce at the arena and added they do not anticipate any layoffs.

Ward 7 Coun. Mike Jakubo said allowing Zulich to take over the arena would be a good opportunity for the city to assess his fitness for managing an events centre.

Ward 5 Coun. Robert Kirwan also said he would support Zulich’s bid.

“What we’re looking at with this proposal is that the Sudbury Wolves hockey club is very much motivated that they don’t lose as much as the city would lose. If so, they have to cover the loss,” he said. “This is not in any way a risk to the city … The risk is in the hands of the Sudbury Wolves.”

Kirwan, much to the ire of some other councillors, got hold of the contract between the city and the Sudbury Wolves. At one point, he got red-faced and loud, asking Ward 8 Coun. Al Sizer if he wanted to make an issue of the matter. Kirwan would not reveal how he got hold of the contract, but emphasized several times the contract was not confidential; however, it was a previous council who negotiated the contract in closed session with the Wolves.

Ward 11 Coun. Lynne Reynolds said it is a “win-win” situation for the city and would enhance the user experience. She also pointed out the deal on the table Tuesday was simply a temporary extension of Zulich’s current agreement with the city. It would be effective Jan. 1, 2018 and would expire in 2022.

“There’s no great level of professionalism required to pop popcorn or to make hot dogs. What we want to do is have a better experience for the user,” she said. “The arena’s been losing taxpayer dollars for years and years under the current management. … I think there’ll be more bookings and more attendance, and I think the Sudbury Wolves have shown they’re able to attract more people and that their marketing is quite good.”

Catherine Matheson, the general manager of community development, said the deal with Zulich would “be advantageous from an administrative perspective” since it would cut the city’s expenses in half.

But Ward 6 Coun. Rene Lapierre was cool to Zulich’s proposal. He pointed to the more than 35 young people who could lose their jobs and said the city would have no control over who Zulich hires once he takes over. Lapierre, however, voted to extend Zulich’s contract.

Ward 2 Coun. Michael Vagnini pointed out the new CEO of Sudbury Wolves Sports and Entertainment, Scott Lund, worked as an executive for 30 years with CTV, helms Cinefest, chairs the board of Science North and was a past chair of the Greater Sudbury Development Corporation. He has many contacts and oodles of credibility, Vagnini said. The councillor seemed confident Lund could get the job done and promote the Sudbury arena to acts and touring shows.

Ward 8 Coun. Al Sizer noted there are no OHL teams who operate arenas. He also questioned who would set standards – for cleanliness, for example – and pointed out the Wolves have no more acumen than city staff to run the arena.

“I’m not sure they have any track record in operating such a facility,” Sizer said. “I’m not sure there’s any evidence here, other than they are talking about a reduction in cost. I would love to save those dollars; I just think we’re a little premature, especially in light of the fact we’re going to be looking at this in two weeks’ time.”

Mayor Brian Bigger and Ward 9 Coun. Deb McIntosh noted that council has not seen the agreement between Zulich and the city. Bigger also wondered whether Zulich would try to save money by cutting back on maintenance costs, since a new events centre could be ready for occupation in about two-and-a-half years. While Bigger hinted at deferring the matter, the Wolves indicated in writing they wanted a decision by June 13 in order to keep the amendment alive.

Shawn Ouimet told The Star after Tuesday’s meeting he has tried to speak with the city for a week about taking over operations, but his requests for a meeting have fallen on deaf ears.

Ouimet devised a plan in which the city would receive 60 per cent of all profits.

“I was willing to give the city 60 per cent of net profits while I took 40 per cent so 60 cents on every dollar in profit goes back to the city to do with as they wish, maybe use the profit to fix the roads,” Ouimet said. “Zulich does not give money back to the city until $1.2 million is made in profit for Zulich, then the city gets compensation. Not hard for Zulich to stay under that – he can negotiate his own tenants’ contracts for his basketball team and show the arena as unsuccessful to further make his centre on The Kingsway more attractive.”

Ouimet said had the city issued an RFP for arena operations, he was prepared to bid on the contract.

“I also have connections with other companies, larger promotion companies, and I could use their negotiating powers to bring in other events to the city,” Ouimet said. “I could potentially bring in 120-130 events. You can’t guarantee anything because obviously you don’t know if a band is going to say yes, but it wouldn’t be hard to piggyback off events in other cities. My proposal also considered the Grace Hartman Amphitheatre, because I know that’s being underused as well, so for smaller concerts or events we would use that instead of the Sudbury arena.”

Jeff MacIntyre, chair of Downtown Sudbury, was satisfied that council voted not to finalize the contract before they have had a chance to look more closely at it, but he still wishes they had voted to issue a RFP.

“At least council took the step of reviewing this thing before it goes through, because it is a blind contract right now, but it shows some serious issues when you have some of council ready to blindly accept a proposal from a group without looking at other groups, which has no history of doing this, they have no expertise in this field,” he said. “There are other proponents we’ll be looking at in a few months.”

MacIntyre said while he has not seen the contract, “it’s known as one of the sweetest contracts in the OHL.” It leans heavily in favour of the Wolves, MacIntyre said. A previous council and a previous owner of the hockey team negotiated the terms of the original contract.

“That could be part of the reason why the city doesn’t make money right now, they’re not pulling in enough dollars from their current deal,” he said.

MacIntyre also questioned the timing of Tuesday’s agenda, calling it shifty.

“The fact we’ve got at least one councillor who said ‘I’m not going to wait for the consultant’s report, I’m all for the True North proposal’,” MacIntyre added. “This is the same councillor who said he saw the contract. It questions how much contact he’s having with this proponent over everybody else. The fact he feels he has so much more information than the general public, without hearing anything from the consultant, is a little bit disturbing.”

How they voted on the Zulich proposal: carried 10-3

Ward 1 Coun. Mark Signoretti: no

Ward 2 Coun. Michael Vagnini: yes

Ward 3 Coun. Gerry Montpellier: no

Ward 4 Coun. Evelyn Dutrisac: yes

Ward 5 Coun. Robert Kirwan: yes

Ward 6 Coun. Rene Lapierre: yes

Ward 7 Coun. Mike Jakubo: yes

Ward 8 Coun. Al Sizer: no

Ward 9 Coun. Deb McIntosh: yes

Ward 10 Coun. Fern Cormier: yes

Ward 11 Coun. Lynne Reynolds: yes

Ward 12 Coun. Joscelyne Landry-Altmann: yes

Mayor Brian Bigger: yes

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mkkeown@postmedia.com

Twitter: @marykkeown

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