Vancouver council approves $40M increase to PNE amphitheatre funding, expects it to pay for itself

A rendering for the new PNE amphitheatre is shown. (PNE)

Vancouver City Council approved a nearly $40-million increase in spending on the PNE amphitheatre project Wednesday, but the city's staff projects the increased costs will be offset by increased revenue once the venue opens.

At their Standing Committee on City Finance and Services meeting, councillors voted unanimously in favour of a motion increasing the multi-year capital budget for the project from $64.8 million to $103.7 million.

The vast majority of that funding – a total of $98.9 million – will be provided to the PNE in the form of two loans from the city's capital financing fund, which the PNE will be expected to pay back over time. The remaining funds will come from the Hastings Park Reserve.

The base loan of $77.8 million for the amphitheatre is expected to be repaid in roughly 11 years, while a second loan of up to $21.1 million for "additional design elements" will be repaid in an estimated five years.

INCREASED COSTS, INCREASED REVENUE

A report from city staff blames the increased cost of the amphitheatre project on "general cost escalation due to market conditions," soil remediation, archeological impact assessment and relocating an underground pipe.

Those increases are covered by the revised base loan, which was originally approved for $60 million in 2021.

The staff report indicates the second loan – and the additions to the project it will fund – is expected to increase revenue from the amphitheatre and – as a result – reduce the amount of time it will take the PNE to repay its loans.

Among the improvements slated to be funded by the second loan are:

"In total, the PNE estimates that these additional design elements would generate up to $4.75 million in additional net annual revenue, based on 30 large events per year," the staff report reads.

"In addition to additional revenue opportunities, these design elements would help to address the noise concerns of the neighbours, and provide better amenities for community users of the space."

Without the elements funded by the second loan – and the projected increased revenue they would bring – the staff report estimates that it would take the PNE 23 years to pay back the base loan.

With the second loan, the estimated repayment time for the base loan drops down to 11 years, with higher revenue from the improvements going to pay down the base loan once the second loan is paid off.

The staff report indicates that if the PNE's revenue projections are incorrect, it could take longer for the non-profit to pay the city back. If actual revenue is 33 per cent lower than the PNE projection, it would take six years to pay back the second loan and 14 to pay back the base loan. If actual revenue is 66 per cent lower, the loans would take 13 and 19 years to pay off, respectively.

MAYOR 'INCREDIBLY EXCITED'

In a news release Wednesday afternoon, Mayor Ken Sim touted the vote as another step toward creating a "world-leading performance facility."

"We’re incredibly excited to see another step taken towards the construction of the PNE Amphitheatre and renewal of Hastings Park," he said in the statement.

In the same release, Coun. Sarah Kirby-Yung, who is also the chair of the PNE's board of directors, called the council's vote "a win for Vancouver taxpayers, a win for Vancouver’s arts and culture sector, and a win for the future of the PNE.”

The PNE released renderings of the amphitheatre project earlier this year.

The facility's current amphitheatre is described in the staff report as "in poor condition" and no longer meeting the needs of performers and guests.

The new amphitheatre will accommodate audiences ranging from 1,500 to 10,000 and will have a roof, which is slated to be one of the largest "free-span timber roof structures" in the world.

“The PNE is excited to see this project move forward – this new investment will mean technology, features, and sound mitigation will be state-of-the-art from the moment it opens,” said PNE CEO Shelley Frost, in the city's release.

“This new space will be a beautiful, inclusive venue, welcoming talent from across the world and enhancing summertime experiences for residents and visitors alike.”