Tim Reid, REAL grilled at Regina budget meeting

Regina’s city council started parsing through its budget proper on Thursday afternoon, but wasn’t expected to finalize things until Friday.

Earlier Thursday, city councillors spent several hours asking detailed, sometimes very pointed questions to Regina Exhibition Association Limited representatives – CEO Tim Reid, vice-president of corporate finance and operations Roberta Engel and Niki Anderson, the new REAL board chair.

When the new board came in, it went over REAL’s budget ask and changed the revenue forecast to be a bit less optimistic.

Anderson explained that REAL had been quite short of its revenue projections in the last two years, so the directors took it and reassessed it to only include revenue it was 90 per cent sure about. However, that raised the ask for REAL from $5.8 million originally to about $6.4 million, including a $1-million capital request.

Anderson defended the request, calling it a realistic budget.

“The last two years, REAL has had to come back to council and ask for more money. We don’t want to do that this year,” said Anderson.

“This is the amount of money required, I would say with a 90 per cent certainty, to do what needs to get done.”

She said officials can have conversations later about what’s happened historically and who’s to blame for what, but she believes that is the amount needed to continue on in 2024. She said work will be done to make REAL more financially viable, with a report to come back in the second quarter of next year with recommendations.

“I will say, as indicated very clearly in the MNP report, nothing is going to turn around quickly in 2024,” Anderson said. “I believe when MNP did a break-even analysis — just to basically say what would need to happen for REAL to just break even — and it was something like a 75 per cent increase in revenue and a 25 or 23 per cent decrease in expenses. That’s unrealistic.”

In one answer, Anderson said part of the problem is that REAL does things that just don’t make money and aren’t subsidized.

“Part of what we will be bringing back in Q2 is what is REAL expected to do? If there’s community events that are being run that have zero revenue and costs associated to them, should you be expecting REAL to break even with no subsidy?” asked Anderson.

Reid said during the meeting that if he had his way, REAL wouldn’t have to make an ask at all.

“I would like nothing more than to come here and not ask you for a dollar. Trust me, it is way easier than what we’re doing right now. But the truth of the matter is that’s not the economics,” said Reid.

Mayor Sandra Masters asked Reid what would happen if council decided not to give REAL the money.

“I think the business that is REAL will wind down and I don’t think it will have a choice because I don’t think it will have the ability to continue to operate,” said Reid.

Later, speaking to media, Reid said it would be a matter of scope and scale if council decided to reduce the association’s ask. If council cut 10 per cent off the ask, Reid said it wouldn’t affect too much for users or workers, but if the ask was cut by half, the board would have to make some foundational choices about how REAL operates.

“If city council was to say, ‘We’re not going to provide anything,’ I think that’d be a tragic outcome, to be perfectly honest. But if they decide, ‘Hey, we have to weigh this against other things,’ we’ll make decisions and this board will approve where they want to go,” he explained.

After REAL’s presentation, Reid said he wasn’t nervous about what decision council would make – his job was done.

“My job is to present the most accurate information that I can, with the best materials,” said Reid.

There was quite a bit of talk and questions about the numbers for REAL.

There was talk about how revenues have changed over the last few years between COVID and the slow recovery.

There were questions about operations and leadership, with Reid saying the recent restructuring will affect eight out-of-scope positions including three vice-president positions.

And there was quite a bit of talk about the millions of dollars worth of deferred maintenance on REAL buildings and assets and debt taken on by REAL that has, most recently, been serviced with more debt.

A decision on REAL’s funding is expected to be figured out within the city’s greater budget discussions.

Regina councillors spent several hours grilling Regina Exhibition Association Ltd. (REAL) leadership Thursday during budget Regina councillors spent several hours grilling Regina Exhibition Association Limited leadership Thursday during budget deliberations. REAL
was represented by (right to left) Niki Anderson, Tim Reid and Roberta Engel. (Lisa Schick/980 CJME).

REAL entertainment

During the questioning of REAL’s leadership at City Hall, more details about what will and could have come to the Queen City in terms of entertainment was revealed.

As part of drilling down on REAL’s revenues, several questions were asked about major events and concerts.

Reid explained that concert tours across Canada right now are developed for 14,000-seat venues, while the Brandt Centre has about 6,000 seats.

He said the Tier 1 shows will play in Winnipeg, Saskatoon, Calgary and Edmonton before heading to B.C.

The Brandt Centre is an old building, doesn’t load well, and can’t compete with Tier 1 marketplaces, according to Reid.

For smaller shows, Reid said the Brandt Centre needs to sell about 2,500 seats to make money in the venue; REAL can’t make money at 2,000 seats.

As part of the association’s more conservative revenue forecasts for next year, it’s forecasting hosting 10 shows or events when it has had anywhere from 14 to 18 in previous normal years.

There are three confirmed shows or events for 2024 with 15 possibilities or “holds.” Reid said they were a mix of Tier 1, 2 and 3 shows.

As for stadium shows, Reid said REAL struggles to find entertainment that will fill Mosaic Stadium. Successful stadiums are seats with at least 50,000 seats and Reid said they’re in markets that are significantly bigger than Regina.

There wasn’t a big stadium concert in Regina in 2023, and in talking about a reduction in forecast revenues, Reid said some of it was related to one summer concert that didn’t come together, unconfirmed Brandt Centre shows and signature events and trade shows that didn’t happen.

Reid had said there was a stadium act that had a hold for the stadium in 2023, but that concert didn’t materialize.

Reid implied singer P!nk was the act, but he said if you’re looking at risk and comparing Regina and Edmonton, you’re going to go to that bigger market with more seats. He’s talked before about Regina losing stadium acts to Edmonton.

Reid explained that converting the stadium for a concert is a $400,000 cost immediately and it works well for audiences of 16,000 to 20,000 but below that number, it’s cost prohibitive.

There is a hold for a show at the stadium in 2024, which Reid said will likely be successful in Mosaic Stadium.

Development of other pieces on the REAL campus has been underway already – a McDonald’s is operating there and a distillery and restaurant is expected to open relatively soon.

During the council meeting, Reid said there are also two other projects in the works – a letter of intent has been signed for a hotel, and there’s a restaurant project that would go in south of the McDonald’s.