Sudbury’s planned Kingsway Entertainment District arena project is on thin ice.

A report issued by city engineering services director David Shelsted suggests that the costs of the project have more than doubled – to $215 million – since the project budget was originally prepared in 2017.

His report will be presented to Sudbury City Council for debate on July 12, at which time council is expected to give the project a formal “go or no-go” decision.

“Delays in the form of objections from individuals and community groups prevented [the construction] process from proceeding in a timely manner,” Shelsted wrote in his report. “These new estimates, prepared in the context of the pandemic, supply chain shortages and extraordinary inflationary pressures, are significantly higher than previous estimates but in line with industry trends.”

The project, which city council has endorsed as one of four priority works, calls for construction of a multi-purpose facility that can act as both a sporting venue and a concert venue. The building would feature 5,800 seats as a sporting venue, and a capacity for 6,500 for concerts, as well as seating, parking, amenities and vehicle access to the event floor.

The building will be located on the Kingsway and will be co-developed and sited alongside a casino and hotel in what has become known as the Kingsway Entertainment District.

The original budget of $92 million was called into question earlier this year when the three companies shortlisted for the work – EllisDon Corporation, PCL Constructors and Ball and TESC Construction Inc. in joint venture – announced that they would not be able to complete work on the project at that fee.

In a media release issued by the city at the time, “current market risks, particularly with respect to inflation effects, supply chain reliability and labour availability” were cited as key concerns. 

The city switched its approach to procurement by dropping the traditional design-build model and moving to a progressive design-build approach, which removed the project’s cost ceiling.

Even with that change in approach, only two proponents – PCL Constructors and the Ball/TESC joint venture submitted bids for the project by the June 16 deadline. Both also submitted non-binding construction budget estimates that drew the city to the reach the larger project budget.

“Once there is an agreement between the city and the preferred proponent, the preferred proponent will work with the city to complete the detailed design and establish both a target price and firm schedule for the event centre,” according to Shelsted’s report. “These deliverables will complete the second phase of the process, likely in late 2022. If the target price exceeds the approved budget, direction will be required from council.”

The new project budget assumes a construction cost of $186 million for the new building and associated siteworks, as well as $3 million to develop the design for the second phase of the project, $21 million toward city’s portion of shared site development costs, and other associated costs.

To date, the city has allocated $100 million to the project. With the new cost projections, an additional $115 million will be needed.

Shelsted’s report recommends the shortfall be made up via debt over a 30-year term.