City council in Regina has given formal approval to borrow $100 million as part of its plan for a new football stadium.
The construction cost for the stadium has been set at $278 million.
The breakdown for that is:
- City of Regina: $173 million (including the $100 million loan).
- Province of Saskatchewan: $80 million.
- Saskatchewan Roughriders: $25 million.
The city must pay back the loan within 31.5 years and, according to a document prepared by the city, the loan will be paid back in 63 installments of $2,802,326. The interest rate is 3.99 per cent. At the end of the term, the city will have paid $176.5 million for the loan.
"That is a very good rate," Regina Mayor Michael Fougere said Monday night. "So we're pleased with that."
The document also notes that the city will pay the loan using funds from municipal taxes, a $12 facility fee tacked on to event tickets, revenues from stadium rent and monies from a recently established reserve fund established for the project.
Fougere, however, was adamant that the loan payments will be supported by the facility fee.
"It's important to make that distinction," Fougere said. "Taxpayers are not paying for it, on their bill. It's actually when you buy a ticket."
At $12 per ticket, the stadium will need to sell 467,000 event tickets per year to generate enough funds for the loan payments.
The capacity of the stadium, for most events, is set at 33,000 but can be expanded to 42,000.
There are currently three firms working with city officials on a final design for the stadium. In December Brent Sjoberg — the lead city official on the project — said the final selection would be made before the end of March. The stadium is set to open in early 2017.
How to generate funds to make loan payments:
According to the city, Regina must make loan payments of $2.8 million every six months, beginning on June 2, 2014.
With a $12 per ticket facility fee, here is what the math looks like for generating $5.6 million per year:
$12 x 467,000 = $5.6 million
At 33,000 seats per event, here is the number of sell-outs the stadium will need to reach those numbers:
467,000 ÷ 33,000 = 14
So: the stadium will need to sell out at least 14 times per year, at the regular seating capacity, to meet the loan payments.