Price tag of new Fredericton performing arts centre climbs to $81.7M

The projected cost to build a new performing arts centre in downtown Fredericton has jumped by more than $20 million, as councillors reckoned Monday night with what inflation can do to a city's purchasing power.

The mayor, meanwhile, says the city can handle the extra expenses without having to turn to taxpayers to find new cash.

Expected to cost $45 million when first pitched in 2018, the arts centre which will be built at the southwestern corner of King and Regent streets was expected to cost $58 million when the budget was revised a year ago.

Now that cost has grown again, to $81 million, with the City of Fredericton citing the rising costs of labour and materials.

"A lot of it's inflationthat increased the cost significantly," said Mayor Kate Rogers, speaking after Monday's council meeting.

"Also, as we went into the design and got more details on the designwe just had more information on what the actual costs were.

"When we used to talk numbersthere wasn't design work that backed up a lot of those numbers, so as we've delved into the design... we've gotten a better sense and more accuracy in numbers."

Monday night's council meeting offered the latest cost estimate for a project that's been at the top of the City of Fredericton's priorities for the past five years.

Aging playhouse to be replaced

It also offered councillors and the public a look at the latest concept designs and floor plans that have been drawn up for the new performing arts centre slated to replace the aging Fredericton Playhouse on Queen Street.

The current playhouse has been plagued by mechanical and structural problems for years, with proponents calling on the city to help build a new facility.

Council agreed to do so five years ago.

A land purchase, adesign phase and a public consultation later, councillors on Monday agreed to the final designs and to a substantially higher price tag.

Following Monday's meeting, Fredericton will borrow$22.6 million from the Municipal Capital Borrowing Board, up from $14 million it originally planned to borrow for the project. Another $46.6 million is expected to come from the federal governmentthrough theCanada Community Building Fund, and $8 million is anticipated to come from a public fundraising campaign by the Fredericton Playhouse Inc.

About$2.3 million is expected to be paid for throughthe sale of the current playhouse property.

The Town of Oromocto iscontributing $100,000 tothe project.

As for a breakdown of the cost of the project, $57.4 million is expected to be spent on the construction of the building, $11.1 million on the design and project management and$2.5 million on insurance, furniture and fixtures.

A $10.6-million contingency fund is also baked into the total budget, to allow for any unforeseen circumstances, Rogers said.

"We didn't estimate low here to try to make it [the cost] look better. Instead we said no, this is this is the amount and then we're putting in a whole bunch of contingencies so that we can have some sense of security."

City can responsibly afford project, says staff

Before the new borrowing requirement was put to a vote, Sara DeGrace, the city's deputy chief administrative officer, gave councillors insight on the city's fiscal health and how the project would affect it.

DeGracesaid New Brunswick municipalities are allowed to allocate up to 20 per cent of their revenue to servicing debt, and that Frederictoncurrently uses four per cent of its revenue for that purpose.

With a plan to borrow $22.6 million, she said that would inch Fredericton's "debt ratio" up to 5.2 per cent, which she noted is still below the city's self-imposed cap of eight per cent.

"Since we haven't done a major capital project in 12 years, our debt ratio is currently at fourper cent, leaving ample room to borrow 22.6 million [dollars]for a new performing arts centre," DeGrace said.

"What I'm saying is we're already budgeting for the debt payment, so residents will not experience a tax increase if council decides to accept the funding model."

DeGrace said the site will be preparedthis fall, followed by construction tendering in the winter, and work beginning in 2024.

Once the new complex is built, the current playhouse will be sold.