The City of St. Albert and the St. Albert Steel have teamed up to help the money-losing Alberta Junior Hockey League franchise during negotiations for another lease agreement at Servus Credit Union Place.
The terms of the current contract expire in 2012.
"We've got three areas where we need to negotiate and we're in agreement these are the three areas," said Mayor Nolan Crouse.
The hot-button items are:
• ice times and rates
• sponsorship and advertising agreements
• repayment of dressing room construction costs
"It's not something you can leave until the 11th hour because they're already planning the 2011/12 season," Crouse said. "Now is the time to finish this thing off so you don't have something lingering."
Crouse said the city supports the Steel in the following areas:
• competitive ice rates as per the sport partner agreement.
• exclusive use of a dressing room, office and storage space at no costs.
• 60 per cent of the advertising space in Performance Arena.
• 15 per cent of the revenue generated from game day concession sales.
• game day support from city staff on an ad hoc basis.
• marketing support from the city and game and ticket promotion through city resources on an ad hoc basis.
• annual free memberships to Servus Place for team members.
"We want to maintain our current level of support and not throw more cash or whatnot towards it," Crouse said. "We don't want to give up the cash we currently have and of course what the Steel needs is more cash, from bums in the seats to advertising money to whatever cash they can get."
Lack of funds
The Steel have struggled financially since they arrived in St. Albert in 2007/08 as the transplanted Fort Saskatchewan Traders.
"We've cut and cut and cut and expenses are going up and we can't continue to operate the way we are right now. We're treading water and it hurts the product on the ice and it hurts recruiting. When you have to make deals to get some cash in return to pay bills, that's not conducive to having a high end junior A hockey team," said Greg Parks, head coach, general manager and part owner of the Steel.
During a budget meeting in November, Steel governor Kelly Smith approached city council for $125,000 annually for 10 years to help the Steel make ends meet.
"We were silent on it. Silent essentially means we didn't approve it," Crouse said.
The operating budget for the non-profit organization is approximately $525,000 per year. The Steel have operated in the red the past three seasons while losing about $50,000 a year for the last two years.
"The two guarantees we have at the start of the year are advertising revenue and our season tickets," Parks said. "Our season tickets have dropped from 454 the first year to 117, so that's about $100,000 that we're behind right from the get-go, and when you're only getting 60 per cent of the advertising as opposed to 100, it's pretty difficult to operate."
Attendance has steadily declined since the Steel set up shop in St. Albert.
"We try and put an entertaining product on the ice. We're one of the highest scoring teams in the league since we've been here. It's good value. We have a great facility. You don't have to worry about parking. You can have beer in the stands for $5," Parks said. "We're doing a lot of the right things but people have a lot of different options. There are a lot of things on the go."
The Steel have never finished higher than sixth place in the north and their only winning record was in 2008/09. They also have not won a playoff series.
"Historically has St. Albert been good with attendance? No," said Parks, a former St. Albert Saints player. "The biggest argument is you've got to have a winning product on the ice and in my opinion that's very far from the truth. Spruce Grove has been averaging about 350 people, and they're the number one team in the country and they won the Alberta final last year."
Steel on the move?
The Steel could relocate after the 2011/12 season, but it won't be easy.
"The team does hold the right to inform the league that they are not happy and they want to move. Of course, we have some clauses in the contract that I don't want to get into but we certainly feel the community is protected in maintaining this team," said Crouse, noting the Steel would also have to follow the AJHL bylaws regarding a shift in location. "We're concerned that we will lose the team. We're going to negotiate in good faith to keep the team here and we're hopeful they don't give notice to the league that they want to move. That is the current rumour that is out there and it has been almost all the time, it just switches locales."
Leduc, Whitecourt and Dawson Creek are the latest destination spots for the Steel to relocate. Parks said if the Steel did move, it would be to a place where the team would be the only show in town.
"The Steel are a big part of the community in St. Albert," he said. "It's just tough to operate when our hands are tied a little bit on what we can bring in revenue-wise."
Parks was the assistant coach, general manager and part owner of the Traders, when the AJHL approved the relocation of the team to St. Albert in a vote by the board of governors in March of 2007. The Traders had been a hockey fixture in Fort Saskatchewan since the 1976/77 season, but the franchise was plagued by poor attendance, even though it finished first in the north and made it to the AJHL final in its last season in the Fort.
St. Albert lost its first junior A hockey club after 27 seasons as the city's premier sports team, when the Saints moved to the Grant Fuhr Arena in Spruce Grove. Drew Schamehorn, the Saints' owner and governor at the time, had been at loggerheads with city council since taking over the team at the start of the 1997/98 season. He repeatedly insisted the Saints needed a new rink to attract big crowds to help improve its financial position. In their last season in St. Albert, the Saints averaged 470 fans at Akinsdale Arena, the smallest AJHL rink in the 16-team league, with 650 seats and room for 400 standing.
Crouse is anxious to see the highest profiled tenant in the 2,000-seat Performance Arena remain in St. Albert.
"Right now the ball is in a joint court. We're negotiating. They may transfer the ball and say we want to move," Crouse said. "If that happens, then we've got other choices that we have to make."
Ice rental
In regards to ice time and rates, the Steel are willing to move their afternoon practice slots to morning sessions at a reduced rate.
"If we practice earlier in the day, that gives Servus the opportunity to rent out our 3 to 4:30 ice slot and be ahead of the game as far as revenue goes," Parks said.
Crouse is leery about reducing the cost of renting ice.
"We want to continue on with the current level of support with our current rates because if we start down a path of lowering the rates, then minor hockey and ringette and others would fall in line," he said. "I'm not convinced right now that we want to do anything relative to money. Whatever the ice rates are and whatever that total revenue is, we want to maintain that revenue stream."
Ad revenue
The Steel also want a bigger cut of the advertising dollar at Performance Arena.
"We want 100 per cent of the advertising, similar to all the other metro [Edmonton] teams, the Sherwood Parks and the Spruce Groves," Parks said. "Servus and the Steel are in 100 per cent agreement that it does not work the way it is now. There is a lot of wasted time and energy and resources having two people trying to sell advertising in one spot, but more importantly, it confuses the advertiser. They don't know if they are supporting Servus or the Steel.
"It would be beneficial for Servus to sell advertising as packages throughout the entire building, which would generate more revenue for them as well. And, if we give up the 60 per cent to the city, that would allow Finnuala [Pollard-Kientzel], our director of marketing, to get out more in the community and create some awareness for the Steel and get more bums in the seats."
Big bucks are at stake.
"It's a major revenue stream, both for the city as well as for the Steel, so this isn't small money," Crouse said.
Dressing room
The Steel also want to renegotiate the amount they owe the city over the construction of their dressing room.
"It's about five per cent of our operating budget for the year and that's a lot of money," Parks said. "[The dressing room] is a capital improvement to the building. If we were ever to go anywhere the locker room would still be here. It would still be able to be used by other teams. I don't think it's any different than the locker room in Akinsdale [the Saints built]. It's still being used by the midget AAA and the bantam AAA teams and that's their home dressing room."
The construction project was a key part of the deal to bring the Traders to St. Albert.
"We went ahead and did that on the understanding that they would pay us back. They're paying it back at a current rate but they're saying that amount of cash is just too much per year and they're not able to maintain that payment schedule the way it's currently structured," Crouse said. "In their perfect world they would say write it off, but what we have to do is protect the agreement and the taxpayers that we represent as well."
