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Cash-strapped HB Studios Sports Centre operators looking for solution to facility’s debt problem

Members of the South Shore Field House Society, which operates the HB Studios Sports Centre, say they are disappointed by the joint council’s decision to deny a funding request, but hope to find a solution moving forward.
Members of the South Shore Field House Society, which operates the HB Studios Sports Centre, say they are disappointed by the joint council’s decision to deny a funding request, but hope to find a solution moving forward. - Josh Healey

‘Dissolution is our last option'

The South Shore Field House Society needs cash — fast.

Board member Melvin Skinner was discouraged when local municipalities turned down the society's recent fundraising request but remains dedicated to finding a solution that will see the HB Studios Sports Centre remain open.

“Our hope is that through sponsorship, marketing and advertising, we can get enough to cover the loan. That’s where we need the help from local businesses,” he said.

The society, which operates the HB Studios Sports Centre, had approached the Municipality of the District of Lunenburg (MODL) and the Town of Bridgewater for funds.

They were each asked to commit $40,000 per year for five years to cover the facility’s debts; the councils instead opted to ask the chief administrative officers (CAOs) to prepare a report on alternative operation models.

That's not fast enough - society treasurer Ken Smith says the facility will default on its bank loans if it doesn’t solve its cash problem soon.

“What is happening with our cash flow was the bank was increasing our line of credit in order to allow us to pay our bills,” he explained.

“The line of credit was going up as fast as the debt was coming down.”

Moving forward

Both Smith and Skinner said they are working with the municipalities’ CAOs to find a way to keep the facility open.

Skinner noted conversations have included a variety of alternatives and he remains optimistic a solution can be found.

Options include leveraging support from the community via sponsorship and advertising or reducing operational hours.

“The whole idea is to bring other revenue into this facility. It’s about increasing our user base,” he said, adding some 30 groups currently use the sports centre.

Skinner said he has also been approached by several businesses who are eager to help.

However, he dismissed the idea of raising rental rates given the region’s demographics.

“What we’re charging is what our community can afford,” said Skinner.

Another option is dissolution, but there are no guarantees as to how the society’s assets would be liquidated.

Both Smith and Skinner said dissolution is something they want to avoid.

“We all hope if we dissolve, the banks, the towns and the municipality could come to an agreement in terms of buying out the debt and the facility,” said Skinner.

“Dissolution is our last option.”

How it happened

It cost roughly $3 million to construct the sports centre — one of the only turf facilities in the province — back in 2008.

Various municipalities agreed to contribute $620,000 to the project over a 10-year period and have since contributed their share.

However, the society still owes nearly $400,000 - a combination of the initial loan and a line of credit.

“The challenge was to meet the carrying charge,” said Smith of the remaining debt.

In order to alleviate some of the financial strain, the municipality and the town agreed to commit an additional $32,000 and $25,000 respectively.

Smith noted these latest contributions are contingent on an independent review, which was completed by two consultants.

A report, including the independent review, was submitted to both councils in January and stressed the society’s financial situation: the facility is in dire financial need.

“Present cash flow for the 2018-2019 fiscal year shows a shortfall of $53,000, of which they are using a credit line to continue to operate. This cannot continue,” stated the review by Dwight Macleod, executive director of the Credit Union Recreation Complex.

Working together

Despite declining the society’s request, Bridgewater Mayor David Mitchell said councils are not walking away from the facility.

“We have made it clear that we are going to work together, hopefully with the other municipalities in Lunenburg County alongside us, to secure the long-term success of this facility,” wrote Mitchell in a Facebook post.

He added that councils could not commit taxpayer money to the facility given its current method of operation.

“There are days when the weight of making the right decision can still be almost overwhelming,” said Mitchell.

Mitchell’s message, written shortly after both councils announced their decision, echoed the sentiments other councillors and members of the society.

“We really have to pull together to make it work,” said Smith.

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