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Lack of bidders leads to skyrocketing costs for Skyway Arena project

Lack of bidders leads to skyrocketing costs for Skyway Arena project

Burlington council has finally found a contractor to take on the reconstruction of the Skyway Arena but it comes at a cost of $39.4 million—a $7.1 million increase since April of this year. Only two years ago the project was estimated to cost $25 million. The problem, it is a seller’s market when it comes to construction projects. COVID has created a backlog of projects and has also resulted in hefty increases in  materials costs due to supply chain interruptions.

Litany of setbacks

A staff report says a tender went out for a general contractor but it did not attract any bids, so a new bid went out with reduced qualifications and attracted five bids. The city had hoped to get a $13 million dollar grant from the Federal Green and Inclusive Community Buildings Program (GIBC) but the application was denied.

The renovations will involve the facility being LEED certified

Costs soared due to inflation but were also affected by “uncontrollable variables such as pandemic related pauses/ delays, strikes, supply chain issues, shipment delays and weather, etc. over the past two years.”

An approach was made to community users of the facility to explore fundraising, but “given the current financial constraints the user groups are experiencing as a result of COVID, it is not currently feasible for the Ice Users to add to their current financial obligations with the City,” the report continued.

The staff report goes on to observe, “one of the biggest factors is that the construction market is looking to remain busy for the foreseeable future with lots of federal work being pushed out, housing demand, and other private developments which all make labour and materials in demand and ultimately prices high.  It is the Quantity Surveyors opinion that we will not see any significant price drops over the next year or two.”

With debt charges and operating costs for the facility the annual costs of the projects will be $1.875,000 or nearly one percent on the tax levy.

Highlights of the project include:

  • increasing the ice pad size from the current 175’x75′ to 200’x85′
  • a cold and warm viewing area (currently no warm viewing area)
  • 6 change rooms (up from 4 currently)
  • two community meeting rooms (currently none)
  • open during the day to accommodate programming needs for the seniors’ population.
  • outdoor patio and potential community gardens
  • fully accessible
  • moved closer to the road for a better streetscape in the neighbourhood but that will eliminate a baseball diamond
  • replacement of Freon, a hydro chlorofluorocarbon (HCFC) refrigerant (mandated by the Canadian Environmental Protection Act by 2020)
  • LEED Silver Certification

It is expected the contract will be awarded to Norlon Builders of London at a special council meeting later this week.

Its likely that the cost overruns facing Burlington’s Skyway Arena project are only the first of a number of instances of sticker shock that will be seen with other major infrastructure projects that are in the works across Ontario.

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