Editor's note: a previous version of this story incorrectly stated that Guelph Community Sports was the owner of the dome and defauted on the loan. It was the agreement with the city, not the loan, and GCS was not owner of the dome.
The City of Guelph is the new owner of the Guelph Community Sports Dome and the remaining $250,000 loan on the facility after it says Guelph Community Sports defaulted on its agreement with the City for the operation of it.
In a report to council, city staff is recommending the city oversee one full operating season at the facility, located in Centennial Park behind College Heights Secondary School, from October 2019 to the end of April 2020, so that data is available to create a business plan moving forward.
After the 2020 season, the city will decide whether parks and recreation will operate the facility or if a request for proposals be tendered for the operation. A third option could see the removal or sale of the dome.
There is currently no budget for the city to operate the facility in the 2019-2020 season, which is expected to result in a loss. In the report, staff said this will be monitored.
The dome was built after the city was approached by Guelph Soccer Club Incorporated for assistance in constructing an indoor soccer facility in 2006. Land was provided by the city and it acted as guarantor of a bank loan to finance the construction.
A third corporate entity, Guelph Community Sports (GCS), was created to oversee operation of the facility.
In 2013, the loan was refinanced and once again the City of Guelph guaranteed the bank loan on the facility. This time, the city added several obligations for GCS to adhere to, including submitting annual financial reports, maintaining adequate insurance and contributing to a capital reserve to eventually replace the turf and roof.
As a result of what city staff calls non-compliance to one or more of those obligations, GCS was given 30 days to rectify it and a number of meetings between the city, GCS and Guelph Soccer Club Incorporated were held.
In late November of 2018, GCS requested a meeting with city staff to seek permission to allow a third party to oversee the operation of the facility and further extend its lease. On Dec. 11, staff received verbal notification that GCS would be dissolving and relinquishing the facility to the city, with official notice given Feb. 6, 2019.
After GCS defaulted on the agreement in late 2018, the City became the owner of the dome and is responsible for repaying the remaining $250,000.
City staff is recommending the city’s recreation department assume full control of the facility, effective June 30. This will allow Guelph Soccer Club Incorporated to continue to use the facility.
City staff is recommending the city repay the outstanding balance of the loan, which will save over $26,000 in interest costs over the remaining four year life of the loan because there is no penalty for early repayment. The 2019 loan repayment is unbudgeted, but staff said the Tax Rate Operating Contingency Reserve can be used to cover it.
After the one season of operation, city staff is expected report back to council in the second quarter of 2020 to assess the facility and prepare a business plan moving forward.
In addition to being responsible for the loan, the city is owed $27,100 from GCS for work completed to bring the facility up to fire code standard. In the report, city staff said the likelihood of recovering that money is low and expensed it in 2018.
