Thunder Bay is allocating additional money to support the establishment of Thunder Bay Art Gallery’s waterfront location.
City council has approved delivering an additional $2.5 million towards the project.
The money will be delivered in two installments of $1.25 million each.
The money is being delivered from the Municipal Accommodation Tax Reserve and the Renew Thunder Bay Reserve Fund.
The release of the first round of additional funding is conditional on the confirmation that the gallery has received all other sources of funding required to achieve partial opening of the new facility.
The second phase of additional funding is conditional upon a partial opening happening and confirmation of all other funding sources required to achieve full opening.
This funding amount ensures the city’s contribution to the project remains consistent at 10 per cent when considering the increased project cost.
The vote to increase funding passed eight to five.
The Councillors who opposed the funds were:
- Michael Zussino (Red River Ward )
- Dominic Pasqualino (Northwood Ward )
- Greg Johnsen (Neebing Ward)
- Trevor Giertuga (At-Large)
- Albert Aiello (McIntyre Ward)
“I think it’s a critical point right now that the city via city council show that we are in, I like the number, let alone the number side, that we’re 10 per cent in on the project,” said McKellar Ward Councillor Brian Hamilton.
“I think that’s going to speak well to investors, certainly to the province or the feds when we go asking for more money, this is a really critical time council.”
The decision to provide more funding has been on city council’s radar for a few months.
At the August 25 Committee of the Whole Meeting, the Thunder Bay Art Gallery delivered a presentation providing a progress update on their project, identifying the successes and financial challenges the project is facing and a potential path forward.
During the meeting, the gallery requested that the city consider providing additional funding.
The Art Gallery is exploring a phased approach that would allow the facility to partially open while continuing fundraising for a complete opening.
According to the city, the estimated cost to achieve this partial opening is $64.2 million, which left the Art Gallery looking for an additional $12.1 million beyond funds already committed heading into Tuesday night’s council meeting.
City council referred the request for additional funding to Administration, asking for a report back with information on timelines, financial impacts, recommended funding sources, and how the funds could be released if approved.
The report was heard by Finance and Administration Standing Committee on October 14.
The committee received a recommendation from administration that was not supported.
“There was a general support from a slight majority of the members for providing some level of addition of financial contribution, with the main question being the appropriate amount,” explained Commissioner of Corporate Services and City Treasurer, Keri Greaves.
“Based on discussion and feedback at Standing Committee administration has refined its recommendation to propose 2 separate contributions of $1.25 million each.”
In 2015, city council formally approved a $5 million contribution to the new Thunder Bay Art Gallery project.
The funding amount was equal to 10 per cent of the project’s total cost.
Since the city’s original commitment was approved, the estimated capital cost of the new Thunder Bay Waterfront Art Gallery has increased to a final estimated maximum cost of $75 million.
According to the art gallery, the increase in cost, while significant, is not inconsistent with industry-wide construction trends over the past decade, particularly during and following the COVID-19 pandemic.
Costs associated with required environmental cleanup have also additionally contributed to the increasing cost of the project.
The cost of the remediation work is estimated to have cost the project an additional $10.2 million as of the last assessment by the gallery.
The city has made significant contributions to the project outside of direct financial contributions.
The city has provided land it owns to host the gallery, as well as a municipal property tax exemption.
Any additional business operating at the gallery, like a coffee shop, would also be exempt from property taxes.
“I do not want to be bailing out a project for $20 million down the road,” added Hamilton.
“I think now is the pivotal moment, I think waiting for future endeavors or any kind of failures, I think is only going to further financially challenge the city and taxpayers could be looking at a more substantial bailout downstream. I think it’s important to get on board now, put shoulder to wheel and get this project across the finish line.”