Here’s a deep dive into the terms of the REAL-Brandt proposal

The proposal to sell REAL campus assets and transfer exhibition operations to Brandt was approved by executive committee. Donovan Maess has more on what’s next.

Billionaire Shaun Semple’s bid to purchase large portions of Regina’s REAL District Campus has cleared a major hurdle, after executive committee approved the plan Wednesday.

The proposed $6.5 million deal still requires final council sign-off and will be back at city council on May 6 for further debate.

City administrators touted the agreement’s potential of millions of dollars in taxpayer savings and value.

“We did a forecasted five-year expected taxpayer expense in status quo and with the proposal status quo,” explained CFO Daren Anderson. “$97 million has to go in REAL between capital and operating, taxpayers would have to fund that. If we go with the proposal, we would save $79 million.”

• Brandt purchase of REAL District clears first hurdle with executive committee approval

The properties include the Ag-Ex Building, Canada Centre Building, Commercial Cattle Barn, Queensbury Convention Centre, Stockman’s Building, the Brandt Centre, the Agribition Building, the land lease for the McDonalds located at 1810 Exhibition Parkway and the parking lot west of Mosaic Stadium.

Committee passing the draft terms 7-4 Wednesday evening with Mayor Chad Bachynski, and Couns. Rashovich, Bezo, Burton, Turnbull, Tsiklis and Mancinelli voting in favour - while Couns. Froh, Flores, Radons and Zachidniak voted against.

Mayor Bachynski said he sees the vision from Semple and Brandt as one which could be transformational for the city.

“Ultimately, to get to where the vision Brandt is looking to take this facility, we’re talking multiple decades,” he said. “Private investment like this gets it there much quicker and [they] have the capacity.”

The deal also includes several terms of agreement which outline both parties’ role in the future of the area.

Property tax exemption

While the deal means the city will receive $6.5 million in cash, plus administration’s outlined capital and operational savings, increased property tax revenue is not expected as a result.

According to the terms of the agreement, “the city will exempt the purchased assets operated by [Brandt] from the municipal and library portion of the applicable property taxes for a period of five years after closing.”

The terms also apply to lease assets which will be operated by Brandt on behalf of the city.

“We were sort of saying, ‘If we’re not collecting taxes today and we’re asking a private business to take all this risk on the capital side – and they continue to do what we’re doing – we’re comfortable,” Anderson told executive committee Wednesday. “We don’t tax those facilities today and so we’ve put stipulations that we need to see Canadian Western Agribition to be a user of these facilities, or Queen City Ex, those major public good events.”

• Here are the REAL District upgrades proposed by Brandt

The exemption requires Brandt to continue operating the site as currently set out and could be extended past the five-year period if Brandt requests it, and council approves it.

If future tax exemptions are not approved by city council, provided Brandt continues to operate the campus in accordance with the terms of the agreement, the city will provide an operating grant equal to the municipal and library portions of the taxes imposed in respect of the ITC and the Brandt Centre.

The other assets will receive a grant of 95 per cent of the imposed taxes.

Coun. David Froh asked Semple Wednesday if he’d be open to paying property taxes down the road.

“Perhaps when some investment is recouped, a portion of those taxes might be collected with a commitment the city then reinvests all of those dollars, every penny, back into the campus - both the public assets the city would retain but maybe shared priorities,” said Froh. “What is your view on that?”

“It’s losing almost $1 million a month, right. Any additional burden you’re going to put on it is going to cause it to be worse,” Semple responded. “You’re keeping all the predictable revenue and you’re keeping all the predictable and new assets. I’m taking all the old ones with unpredictable revenue.”

“The incentive for them not to be owned by the city and for them to be all the risk on the private person is that you don’t tax them any more than you would tax yourself. I think that’s a fair compromise,” Semple added.

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Bachynski says he is comfortable in the tax breaks, given it’s a part of a wider deal which was negotiated over the course of several months.

“It’s a comprehensive agreement driven by both sides – there’s give and take,” he told reporters after the meeting. “That’s one element of the entire deal which allowed us to get to an agreement on it.”

Should Brandt build something new on the property or change the core operations of a building, it will be required to pay full property taxes and not receive a grant.

Other incentives

The terms also outline Brandt will have access to the Stadium to host two events per year, including rights to food and beverage revenues and City services for policing, fire and bylaw enforcement services.

“Brandt shall be responsible for other standard operating expenses, on a cost recovery basis, and payment to the City of a commercial event license fee of $12 per ticket payable to the city,” the agreement reads.

Semple will also have the “right of first refusal” on the other REAL assets the city is retaining, excluding Mosaic Stadium, if it proposes to sell or dispose of them in the future.

Plus, if a new stadium or arena is constructed within 20 years to replace the Brandt Centre and the rights are not transferred to Brandt, or Brandt is not allowed to participate in the ownership of the new facility, Brandt may sell the purchased assets back to the city based on their depreciated value.

Leases, employees and events

As part of the deal, Brandt will be assuming existing leases, sponsorship, food and beverage and service agreements related to the buildings, as well as all event bookings or contracts.

Brandt will also assume all REAL employment contracts and union-related obligations, including those associated with applicable collective agreements.

• City of Regina to discuss sale of several REAL properties to Brandt

The existing lease agreements between REAL and Brandt’s affiliate companies relating to tenancies of the Brandt Centre (Pats’ Lease) and the Agribition Building (Distillery Lease) will terminate without liability to either party.

Brandt is to provide access to the purchased assets to Canadian Western Agribition and other community events at commercial rates. Brandt will also be responsible for the operation of the Queen City Ex.

“We’re going to continue that as long as customers want it, as long as they want to do it, it’ll be on the site forever,” Semple iterated to councillors. “It used to be a lot bigger when I was a kid than it is right now. We’re going to go into that trying to make that even better, and safer.”

Should the proposal receive council’s stamp of approval May 6, administration will immediately begin finalizing the details of the deal.

Brandt targets July 1, 2026 as its closing date for phase one of the deal and to have full possession of its buildings by Sept. 1, 2026.

With files from David Prisciak and Jacob Carr.