Keystone reports ‘significant’ $1.128M loss

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This article was published 13/01/2024 (855 days ago), so information in it may no longer be current.

The Keystone Centre, a cornerstone of Brandon’s events industry, navigated a complex fiscal landscape in the 2022-23 fiscal year, reporting a net operating loss of $1.128 million on Thursday at its Assembly Hall.

The financial report reveals that the Keystone Centre generated $5.249 million in net revenue from operations, but operating expenses, including rising costs of natural gas and insurance, amounted to $7.134 million. Operating grant funding from the City of Brandon and Manitoba, totalling $760,400, helped cushion the financial blow.

Keystone Centre chair Bruce Luebke attributed the deficit to the ongoing recovery of the event, tourism and hospitality sectors from the COVID-19 pandemic. That recovery, he said, remains in progress, with industry experts projecting a potential five-year timeline for full recovery.

“The other unfortunate news this fiscal year was that one of the Keystone Centre’s most significant revenue events in the Canadian National Arabian and Half Arabian Championship Horse Show would not return to Brandon,” he said. “Uncontrollable expenses continue to rise for the Keystone Centre, with the cost of natural gas and insurance doubling in the last four years.”

Luebke said the industry’s slow return to pre-COVID norms has limited event attendance and revenue, adding the centre managed to post surpluses during the pandemic largely due to the federal government’s wage subsidy. However, as the subsidy phased out, inflation further worsened the financial strain.

“The substantial impact of rising expenses and decreased revenue, especially with a 10 to 15 per cent increase in costs, resulted in a significant deficit, he said. “Despite initially planning for a two-year budgetary period covering 2022-2023 and 2023-2024, the Keystone Centre depleted most of its anticipated cash position during the 2022-2023 fiscal year.”

On the impact of $7.9 million in provincial funding over the next five years announced in March 2023, Luebke said the major aspect of it has been on the capital side, allowing the centre to address projects that were consistently being pushed back.

“Specifically, the significant $3-million Arts, Culture and Sport in Community grant, earmarked for the renovation of the main arena, plays a pivotal role,” he said. “We are currently engaged in substantial projects, including an air-conditioner dehumidification initiative and a seat-replacement project, both of which carry considerable significance.”

On the planned renovations to the main arena at Westoba Place, he said, most of the work is set to be carried out from June to August of this year, ensuring readiness by Sept. 1 for the Brandon Wheat Kings season and subsequent events.

“The seat-replacement project involves strategic considerations, such as improvements in food and beverage services and other amenities. More details on the seat-replacement aspect will be provided in the next month, offering a more comprehensive understanding of the project’s scope.”

An announcement regarding the replacement of chief executive officer and general manager Jeff Schumacher, who resigned in September, is expected in the coming week, according to Luebke.

Despite the challenges, interim general manager Connie Lawrence said the centre witnessed some operational successes, noting an increase in trade shows, conferences, concerts, and meetings.

“This past fiscal year continued to show a rebound from the complete shutdown due to the pandemic in years 2020-2022,” she said. “It showcased what the potential ‘new normal’ may look like for the events industry.”

Despite staffing shortages, she said, the centre completed several essential upgrades, including Manitoba Room bathroom renovations, an outdoor show ring overhaul and lighting upgrades funded by Efficiency Manitoba.

The upcoming year is expected to pose additional operational, fiscal and financial challenges, Luebke said, noting the Keystone Centre’s management is actively working on strategies to either increase revenue or reduce expenses to help the bottom line.

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