Executive Summary

1. Executive Summary • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Background • For over 20 years, the City of Greater Sudbury and its predecessor municipalities have considered the potential involvement of local government in a purpose-built convention facility. • In 1982, the Sudbury Regional Development Corporation commissioned a study investigating the feasibility of a conference and convention centre in Sudbury. • In 1988, the Downtown Development Action Program identified the establishment of a conference and convention facility as a priority for downtown redevelopment. • The concept of a convention facility was further supported by the Next Ten Years Conference, which identified a combined convention/casino/hotel facility as an opportunity for community and economic development. • The issue of a purpose-built convention facility has recently be raised by the owners of the City Centre shopping mall, who approached the City of Greater Sudbury with the opportunity to participate in a private-public sector partnership leading to the development of such a facility to be located in the City Centre shopping mall. We understand that the proposed facility would be capable of accommodating in excess of 1,000 delegates. • As a result of this opportunity, City Council approved a public-private partnership process for a convention centre in Greater Sudbury. As part of the process, KPMG LLP was retained to assess the potential level of market support for a convention facility in the community.

2. Executive Summary • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Summary of Findings • Conventions, especially larger ones, have the potential to provide significant economic benefits to their host communities. For example, we have estimated that a convention involving 1,000 delegates could result in almost than $300,000 in direct spending daily, with secondary economic benefits amounting to almost the same amount. • While Greater Sudbury already hosts a large number of conventions, these are generally limited to smaller events (150 to 300 delegates) due to capacity limitations of the existing facilities. • While Greater Sudbury has hosted larger conventions in the past, this has been accomplished through the use of multiple locations or secondary facilities, such as vacant retail space. Both of these options are less desirable than a single, purpose-built convention facility. • Our research indicates that a new, larger convention facility should be capable of attracting between five and ten large conventions to Greater Sudbury on an annual basis. The ability of the convention centre to realize this level of activity will be contingent upon a number of factors, most notably the effectiveness of its marketing and promotional efforts.

3. Executive Summary • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • This level of convention activity will have a significant economic benefit to the community as a whole. Overall, we estimate that the convention centre could generate as much as: • 195 direct and indirect employment positions, providing total wages and benefits of $3.8 million annually. • $2.5 million in new taxation revenues for all levels of government, including $300,000 for the City of Greater Sudbury. • Despite the economic benefits provided by the new convention centre, some degree of competitive pressure will likely result from its establishment. Our research indicates that while large conventions will likely be attracted to Greater Sudbury, the new facility will need to supplement this level of activity with smaller conventions, corporate meetings and other special events. Given that these events are already served by existing convention and conference facilities in Greater Sudbury, the new facility will be in competition with existing businesses.

4. Executive Summary • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Recommended Course of Action • The results of our analysis indicate that the establishment of a new convention facility does represent a valid and supportable public policy issue. • A new facility will enhance the community’s ability to attract larger conventions that currently do not consider Greater Sudbury to be a suitable host community, thereby creating incremental economic benefits for the community as a whole. • Sufficient market support exists for the facility. • The use of a public-private partnership process provides an opportunity for all interested parties to participate in the establishment of the convention centre. • The establishment of a larger convention facility is consistent with comparable communities across Canada. • A larger convention facility would enhance Sudbury’s position as the leading centre in Northern Ontario. • Accordingly, we would recommend that the City undertake the next phase of establishing the convention centre – that being the issuance of a request for letter of interest and qualifications. • To assist the City in the next stage of the public-private partnership process, we have provided suggested criteria for evaluating proposals received from interested parties

5. Objectives and Scope of the Assignment • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Objectives • The City of Greater Sudbury has engaged KPMG to: • Assess the potential market support for a convention facility in Greater Sudbury. • Provide recommendations as to the type and size of centre that would be appropriate in light of the perceived level of market support. • Suggest criteria to be used by the City of Greater Sudbury and other participating organizations to evaluation potential locations for the centre. • Quantify the incremental community benefits resulting from the establishment of a convention facility and the corresponding increase in visitation to Greater Sudbury. • Identify the likely impact that a new convention centre would have on current facilities in Greater Sudbury.

6. Objectives and Scope of the Assignment • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Scope of the Assignment • In order to achieve these objectives, our workplan included the following procedures: • Reviews of previously commissioned reports concerning convention facilities in Sudbury, specifically: • Regional Sudbury Convention and Trade Centre Study, prepared by Peter Barnard Associates, 1982. • Sudbury Convention Centre Study, prepared by Peter Barnard Associates, 1983. • Downtown Development Action Program, prepared by the City of Sudbury, 1989. • An assessment of the current level of convention activity on a national, regional and local level, obtained through: • Reviews of secondary research sources concerning the conference and convention industry. • Discussions with representatives of various government agencies (both municipal, provincial and federal) involved in sponsoring or otherwise supporting conventions in Northern Ontario. • Interviews of local accommodation and conference facilities.

7. Objectives and Scope of the Assignment • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • An assessment of the potential level of market support for a convention centre, obtained through: • Interviews of local associations and organizations that could potential host conventions in Greater Sudbury. • A survey of provincial and national organizations that may consider Greater Sudbury as a potential host for conventions. • Discussions with industry associations involved in the hospitality and accommodations industry. • An indication of facility requirements for the proposed facility (including capacity, spatial requirements, design guidelines and site selection criteria) obtained through: • An analysis of convention centres located in other Canadian communities. • Reviews of industry publications. • Discussions with members of KPMG’s National Tourism and Hospitality practice. • An assessment of the potential community benefits resulting from the establishment of the convention centre, maintained by the Ontario Ministry of Tourism, Culture and Recreation. • An indication of the potential impact of the new facility on existing businesses in Greater Sudbury, determined through interviews of local accommodation and conference facilities.

8. Objectives and Scope of the Assignment • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Restrictions • Our role in this engagement has been to estimate the projected support for a convention centre in Greater Sudbury based on available information. Inherent in our study is the risk of future social, political, economic or other changes that may influence or affect the operations of the convention centre. Given that these factors, by their nature, are both uncontrollable and unforeseen, the actual level of market support could vary significantly from that outlined in our report. • Our engagement has been specifically limited to assessing potential market support and does not entail an assessment of overall financial performance, which would involve a review of operating and capital costs. • In light of these factors, we will assume no responsibility or liability for any losses occasioned as a result of the reliance on our report and conclusions.

9. Industry Demand Trends • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions North American Demand Trends • The 2000 Meetings Market Study (a bi-annual publication produced by Meetings & Conventions Magazine) found that the convention industry has been relatively flat since the early 1990’s. During 2000, an estimated 12.3 million delegates attended 11,600 conventions in North America. While this may seem significant, both the number of conventions and total attendance are less than those experienced during 1990. • While the average attendance per convention is just over 1,000 delegates, almost half (46%) of conventions involve less than 300 delegates. • The average lead time required to plan a convention is approximately 20 months. Source: 2000 Meetings Market Study

10. Industry Demand Trends • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • Conventions are typically annual events, concentrated in late winter (January and February) and early fall (September and October). • Hotels are by far the largest hosts of conventions, accounting for two-thirds of all conventions held. This ratio is not necessarily indicative of the competitiveness but rather the low number of convention centres as compared to hotels. Source: 2000 Meetings Market Study

11. Industry Demand Trends • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Convention Activity in Sudbury • Our research indicates that Sudbury is home to a thriving convention and meeting industry focused primarily on small to medium sized conferences and conventions. • The predominance of small to medium sized conventions is a reflection of the available facilities in Greater Sudbury • Average capacity appears to be in the order of 400 delegates. Source: Interviews with local hotel and convention facilities • The largest hotel in Greater Sudbury can accommodate approximately 700 delegates. • The figures noted above reflect the capacity in a convention setting (normally theatre-style seating). In certain instances, the effective capacity of some hotels is limited not by the number of delegates that can be accommodated in a convention setting, but rather the capacity of the facility’s dining area. As a result, the effective capacity for conventions is likely in the range of 350 to 450 delegates.

12. Industry Demand Trends • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • While other facilities in Greater Sudbury, such as the Sudbury Arena, community halls and post-secondary institutions, have the ability to host larger conventions, their attractiveness to convention organizers is hinder by: • A lack of adjoining hotel accommodations • Limitations on onsite food preparation and serving facilities • Physical layout that is not conducive to conventions • Our review of the 2000 Meetings Market Study indicates that these factors rank among the most important considerations when selecting a site for a convention. Accordingly, the absence of these characteristics in the larger facilities in Greater Sudbury effectively precludes the community from hosting larger conventions. • Despite the lack of suitable facilities for larger conventions (+500 delegates), Greater Sudbury has experienced past successes in attracting and hosting conventions of this magnitude through: • The use of more than one hotel/convention facility • The use of secondary facilities. For example, the Ramada Inn has used vacant portions of the City Centre Shopping Mall to accommodate larger conventions, including the former Eaton’s store and the former Cineplex movie theatres • We note, however, that the use of multiple or secondary facilities does not represent the preferred solution for Greater Sudbury’s capacity issues. • We have provided a summary of the larger convention facilities in Greater Sudbury on the following page.

13. Industry Demand Trends • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Convention Facilities in Sudbury Estimated NumberCapacityof Hotel Rooms Hotels • Ramada Inn 700 delegates 150 • Howard Johnson 400 delegates 200 • Holiday Inn 400 delegates 80 • Quality Inn 150 delegates 100 Community Halls • Caruso Club +1,000 delegates n.a. • United Steelworkers Hall +1,000 delegates n.a. Public sector facilities • Sudbury Arena +5,000 delegates n.a. • Laurentian University +2,000 delegates 500 • Cambrian College 450 delegates 300 • College Boreal 300 delegates n.a. • Cambrian Foundation +1,000 delegates n.a. Source: Interviews with local hotel and convention facilities. The capacity figures reflect the number of delegates that can be accommodated in a conference/convention setting.

14. Industry Demand Trends • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Implications of Industry Demand Trends • Currently, Greater Sudbury is only capable of attracting relatively small conventions (less than 350 to 450 delegates). • Establishments with the required amenities (adjoining hotel accommodations, quality food services) have a maximum effective convention capacity of 350 to 450 delegate • Establishments that have larger convention capacities lack the required amenities • In light of these limitations, Greater Sudbury is limited to hosting conventions of 350 to 450 delegates and appears to be “missing out” on a sizeable portion of the convention market. • 54% of conventions involve more than 300 delegates. • 39% of conventions involve more than 500 delegates. • While the ability of existing facilities to host larger conventions is limited by available capacity, our research indicates that the level of “turnaways” (where event organizers approach facilities in Greater Sudbury but cannot use the facility due to issues relating to capacity or scheduling) is minimal. As a result, it is reasonable to assume that organizers of large conventions currently do not view Greater Sudbury as a potential host for their conventions.

15. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Basis of Analysis • Our conclusions as to the potential level of market support for a convention facility in Greater Sudbury are based on the results of the following research procedures: • A survey of 150 national and provincial organizations to determine their interest in Greater Sudbury as a convention destination • A survey of local organizations to identify their interest in attracting national and provincial conventions to Greater Sudbury • A review of similar sized communities in Canada designed to assess the degree of success achieved by convention centres in medium-sized communities

16. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions National and Provincial Survey • Oraclepoll Research was retained to conduct a survey of 150 national and provincial organizations to determine interest in hosting conventions in Sudbury. • The organizations were selected from Associations Canada and were selected to provide representation from a number of sectors, including government, professional organizations, labour and community groups. • A sizeable number of the conventions held (24%) involved more than 400 delegates and, as such, likely could not be held in Greater Sudbury. • A summary of Oraclepoll Research’s findings has been included as an appendix to our report. Source: Oraclepoll Research Survey

17. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • The location of conventions appears to be highly centralized, with five cities accounting for 55% of all conventions held. The remaining 45% of conventions was distributed among more than 40 communities. • The vast majority of organizations surveyed (97%) have never held a conference in Greater Sudbury, indicating that attracting conventions on a national and provincial level could be a significant challenge. • This conclusion is supported by the fact that the majority of organizations surveyed indicated that they would be unlikely to consider Greater Sudbury as a host. This corresponds with our earlier findings concerning turnaways and the conclusion that Greater Sudbury is likely not perceived to be a suitable host for larger conventions. Source: Oraclepoll Research Survey

18. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • Despite the apparent disinterest in Greater Sudbury as a convention host, an examination of the reasons why organizations would not chose Greater Sudbury indicates that these views are based, to a large extent, on either negative perceptions about Northern Ontario or a lack of knowledge about the community, including: • The perception that Sudbury is too far (17% of respondents) • The northern location of the City (9% of respondents) Source: Oraclepoll Research Survey • A lack of information or experience with Greater Sudbury (7% of respondents) • Perceived difficulties in accessing the community by air (6%) • The belief that entertainment activities are not available for delegates (4%) • Interestingly, those organizations that have hosted conventions in Greater Sudbury have an extremely positive impression of the community, with all of these organizations indicating that they were “very satisfied” with Greater Sudbury as a location and that they would be “very likely” to refer the community to others.

19. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • Based on a straightforward interpretation of the Oraclepoll Research survey results, we believe that the establishment of a new convention centre in Greater Sudbury would likely attract ten to fifteen new conventions from the organizations surveyed. LowHigh Number of organizations surveyed 150 150 Percentage of conventions over 400 delegates 24% 24% Number of conventions within target market segment 36 36 Likelihood of locating convention in Greater Sudbury 26%1 44%2 Number of conventions to be attracted 10 15 • In comparison, a study prepared for the Peter Barnard and Associates for the Sudbury Regional Development Corporation in 1982 projected that a new convention centre could attract up to 35 new conventions per year to Sudbury. 1 Represents all of the respondents who indicated they were very likely and 50% of the respondents who indicated they were somewhat likely to consider Greater Sudbury as a host site. 2 Represents all of the respondents who indicated they were very likely or somewhat likely to consider Greater Sudbury as a host site.

20. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Survey of Local Organizations • In a report prepared for the Vancouver Trade & Convention Centre, the involvement of local bodies in attracting conventions undertaken by their affiliated or parent associations was considered to be essential • This is particularly true for Greater Sudbury given that local bodies could address some of the negative perceptions surrounding the community • In order to identify the level of support for positioning Greater Sudbury as a host for provincial and national association conventions, we interviewed a number of local representatives from a variety of sectors, including: • Government • Healthcare • Education • Community organizations • Labour • A listing of associations interviewed has been included as Appendix C.

21. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • Based on our interviews, it appears that strong support exists for positioning Greater Sudbury as a host for larger provincial and national-level conventions • The majority of individuals contacted indicated that they would work towards attracting conventions held by associations in which they were members. • The development of a new convention centre was considered by many to be beneficial for the community as it addressed a perceived lack of suitable facilities. • Some provincial associations apparently have difficulty in attracting delegates from Northern Ontario due to distance and cost. The establishment of a convention centre in Greater Sudbury was seen as a means of overcoming this challenge, thereby adding to the community’s appeal as a convention site. • Greater Sudbury is considered by Aboriginal organizations to be centrally located, thereby making the community well-positioned to service this sector. However, it was recognized that the potential market for large Aboriginal conventions is relatively small. • The establishment of a new convention centre, along with the founding of the new medical school and expansion of the Sudbury Regional Hospital facility, would likely increase Greater Sudbury’s ability to attract conventions focusing on the medical sector. • The combination of a new convention centre and Greater Sudbury’s position in the mining industry would enhance the ability to attract national and international conventions relating to the mining industry.

22. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Experience of Other Communities • In order to provide an indication as to the potential level of support for the proposed convention centre, we have conducted a review of existing convention centres in communities similar to Greater Sudbury, including: • Saskatoon • Winnipeg • Windsor • The number of large conventions (+500 delegates) held in the centres ranged from 15 to 35 per year.

23. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Saskatoon Centennial Auditorium • 18 to 20 conventions per year • Maximum capacity – 1,400 delegates • Cleary International Centre (Windsor) • 15 to 18 conventions per year • Maximum capacity – 1,000 delegates • Winnipeg Convention Centre • 28 to 35 conventions per year • Maximum capacity – 8,000 delegates Source: Interviews with convention facilities listed.

24. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Overall Conclusions • Based on the results of our research, we anticipate that a new convention centre in Greater Sudbury would be able to attract approximately ten to fifteen large conventions (+400 delegates) annually. • Given the difficulty of current facilities to accommodate this size of convention at the present time, it is reasonable that this increased level of activity would be incremental to the community. • The degree to which this level of activity could be sustained in contingent upon a number of factors, primarily the effectiveness of ongoing marketing and promotional activities. • Our discussions with representatives of convention and conference facilities, both locally and nationally, indicate that convention centres are unable to rely exclusively on large conventions. As a result, the new centre will also be required to target smaller conventions and alternative uses for the facility, such as trade shows, banquets, corporate meetings, sporting events and theatrical performances.

25. Will a Convention Centre be Supported? • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Other Issues • While our research indicates that the establishment of a new convention centre will result in an increase in convention activity in Greater Sudbury, we have identified some issues that may provide challenges to the facility: • Air access – Currently, Air Ontario offers a total of seven flights daily between Sudbury to Toronto, with an average capacity of 50 individuals per aircraft. This results in a total capacity of 350 people per day, which does not appear to be sufficient to support the travel needs of a 500 person convention, especially after consideration is given to spouses, association staff and non-convention related airline traffic. While the addition of air service by Westjet could alleviate some of this concern, air transportation could pose a challenge. • Hotel accommodations – We understand that there are 1,500 hotel rooms in Greater Sudbury (excluding rooms available through Laurentian University and Cambrian College) of which approximately 1,200 would be suitable for convention accommodations. Given an average occupancy rate of 60% in Northern Ontario3, this translates into 480 hotels rooms available to support incremental demand. Accordingly, a concern may exist surrounding the ability of the community to accommodate conventions involving more than 500 delegates. • Rotating conventions –Our research indicates that the types of conventions attracted to Greater Sudbury are likely to be rotated among a number of different communities. As a result, it could be a number of years before a specific convention returns to Greater Sudbury. 3 Source: Ontario Restaurant, Hotel and Motel Association

26. Recommended Convention Facilities • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Delegate Capacity • Our analysis indicates that the optimum capacity for a new convention facility in Greater Sudbury would be approximately 1,000 delegates. • A convention centre with a capacity of 1,000 delegates would be larger than existing facilities in the community, thereby allowing Greater Sudbury to overcome its current inability to host conventions of greater than 450 delegates (representing approximately 40% to 50% of all conventions held). • Conventions of 1,000 delegates represent the upper limit that could be attracted to Greater Sudbury. Our discussions with representatives of KPMG’s National Tourism and Hospitality Group indicate attracting conventions larger than this to medium-sized communities such as Greater Sudbury is a significant challenge. • A convention centre with a total capacity of 1,000 delegates, if properly designed, could be divisible into two or more sections, thereby allowing the facility to host multiple large conventions. • A convention centre of this size would be consistent with those located in comparable communities.

27. Recommended Convention Facilities • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Size of the Facility Total Area of Comparator Convention Centres(in square feet) Total Delegate Area PerAreaCapacityDelegate Saskatoon 30,400 1,400 22 Windsor 26,000 1,000 26 Winnipeg 145,000 8,000 18 • Based on our review, we would suggest that the proposed convention facility comprise approximately 25,000 square feet of convention and exhibit area. This estimate is based on the projected capacity of 1,000 delegates and the average square feet of comparator convention centres. Source: Interviews with convention facilities listed. • Additional area will be required for functions such as food preparation, storage, building maintenance and loading and unloading areas. The square footage required for these functions is contingent upon the ultimate design of the facility. • Based on our discussions with representatives of other convention centres, we strongly recommend that any design work undertaken on the proposed facility involve an architectural firm with considerable experience in the field of convention centre design and construction.

28. Recommended Convention Facilities • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Design Characteristics • Our research indicates that well-designed convention facilities share several characteristics: • Exhibit space (used for trade shows, exhibits and plenary sessions) should be contiguous and preferably on the same floor. A building design that results in the perception of “prime” and “secondary” exhibit space should be avoided. • Exhibit areas should be characterized by high ceilings (20 to 30 feet) and a lack of support pillars or columns. These characteristics permit the use of large exhibits, enhance pedestrian traffic flow and contribute towards the overall openness of the area. • If possible, exhibit areas should be located on the ground floor to enhance the ease of loading and unloading. • The design of exhibit space should accommodate divisions into multiple areas to support separate events. This is especially important as convention facilities in small to medium-sized centres rely upon sources of revenue other than conventions, such as smaller conferences, corporate meetings, banquets and social functions. • Theatres for plenary sessions are gaining popularity among larger associations and should be incorporated into the design of the convention centre.

29. Recommended Convention Facilities • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • Availability of communication link-ups (e.g. video conferencing, internet access) and computer projection capabilities are considered desirable. • Sufficient meeting facilities should be available. We understand that a common ratio of exhibit to meeting areas is 2:1. As a result, a convention centre with 30,000 square feet available for conventions should consist of 20,000 square feet of exhibit space and 10,000 square feet of meeting rooms. • The convention area should incorporate a sufficient amount of storage space for exhibitors, convention organizers and the convention centre itself. Our discussions with representatives of convention centres in both Winnipeg and Windsor indicate that the current level of storage area in those facilities is insufficient. • Dining facilities should be sufficient to accommodate all delegates attending a given convention. This would eliminate the current shortcoming of existing local facilities, where the effective capacity of the establishment is limited not by exhibit or seating areas, but rather dining capacity. • Loading and unloading areas should allow for simultaneous move-in/move-out. Areas should also be provided for “holding” vehicles waiting to load or unload. • As the public-private partnership proceeds, a number of different designs and layouts for the convention centre may be presented to the City. Ideally, the final layout of the centre should reflect the design characteristics noted above.

30. Facility Selection • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Overview • As noted earlier in our report, our review of the potential market support for a convention facility came about as a result of a proposal to the City relating to a private-public sector partnership • In the event that other interest private-sector parties may exist, the City could be faced with the choice of multiple sites for a convention facility • Accordingly, site selection criteria have been requested to assist the City in evaluating potential locations for a convention facility. In designing these criteria, we have attempted to reflect information obtained through: • A review of factors influencing the decision-making process for convention planners, as published in the 2000 Meetings Market Study. • Consultation with members of KPMG’s National Hospitality and Tourism practice. • A review of the internal due diligence policy for the City of Greater Sudbury approved by City Council in November 2001.

31. Suggested Site Selection Criteria • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Suitability of the Proposed Facility • Ability to accommodate larger conventions (upwards of 1,000 delegates). • Conformance with the suggested design criteria, including: • 25,000 square feet of convention and exhibit area. • Main floor exhibit area, with high ceilings and an absence of support pillars and columns. • Sufficient meeting and storage areas. • Suitable loading and off-loading facilities. • Suitability of dining and kitchen facilities. • Appropriateness and attractiveness of surrounding land uses. Location of the Proposed Facility • Proximity to hotel accommodations. • Proximity to off-site entertainment and dining facilities. • Availability of parking spaces. • Ease of access, including access to public transit, major land transportation routes and proximity to the Sudbury Airport.

32. Suggested Site Selection Criteria • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Secondary Uses for the Facility • Ability to divide exhibit and conference space into multiple areas. • Intended secondary uses for the facility, including: • Smaller conventions and conferences. • Trade shows. • Sporting events. • Theatrical or entertainment events. Qualifications of the Proponents • Experience of proponents in convention centre management. • Demonstrated financial resources available to the proponents to support the centre. • Proposed marketing and business strategies for the convention centre. • Involvement of architectural firm experienced in convention centres.

33. Suggested Site Selection Criteria • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Municipal Involvement • Extent to which the City of Greater Sudbury will be require to contribute financial resources towards the convention centre, including: • Initial capital contribution. • Ongoing financial contributions to subsidize operations. • Degree to which the financial commitment required from the City will be offset by increased taxation revenues from the convention centre. • Extent to which the convention centre will be incorporated into existing municipal buildings or facilities. The inclusion of a convention centre into an already existing municipal building, such as an arena, could increase the City’s revenue from the facility while reducing the overall capital and operating costs of the project. Other • Anticipated financial performance of the convention centre based on business case provided by the proponents. • Extent to which the convention centre is incorporated into an existing hotel. Our research indicates that the majority of standalone convention facilities cannot operate profitably. Convention facilities that are incorporated into existing hotels benefit from the revenue generated by non-convention related activities, such as hotel room rentals, restaurant sales and shared administrative and operating costs.

34. Economic Benefits of Conventions • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Direct Spending • Conventions are considered to be significant economic events in that they are typically associated with a large amount of direct spending by delegates, sponsoring associations and exhibitors • A convention of 1,000 delegates and 25 exhibitors held in Greater Sudbury will generate approximately $270,000 in direct spending daily. Source: Convention Income Survey Report, International Association of Visitors and Convention Bureaus, adjusted to reflect small market spending patterns.

35. Economic Benefits of Conventions • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions Direct and Indirect Benefits • Understandably, the economic impacts of conventions extent well beyond the level of direct spending experienced as the amounts spent directly circulate through the community. • Overall, we estimate that if the convention centre is successful in attracting ten to fifteen large two-day conventions to Greater Sudbury annually, the economic benefits could be fairly significant. • Almost $6 million in direct spending. • Just under 200 direct and indirect employment positions, resulting in $3.8 million in wages. • $5.7 million in value-added. • $2.5 million in new tax revenues, including $300,000 for the City.

36. Economic Benefits of Conventions • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • Average number of delegates per convention 500 750 • Number of conventions held annually Ten Fifteen Ten Fifteen • Direct spending $2,800,000 $4,200,000 $4,000,000 $5,900,000 • Employment positions created: • Direct 60 90 85 125 • Indirect and induced 35 50 50 70 • Total 95 140 135 195 • Total wages and benefits generated: • Direct $1,000,000 $1,500,000 $1,400,000 $2,100,000 • Indirect and induced $800,000 $1,200,000 $1,100,000 $1,700,000 • Total $1,800,000 $2,700,000 $2,500,000 $3,800,000 • Total value-added created: • Direct $1,400,000 $2,000,000 $1,900,000 $2,800,000 • Indirect and induced $1,500,000 $2,000,000 $1,900,000 $2,900,000 • Total $2,900,000 $4,000,000 $3,800,000 $5,700,000 • Total taxation revenue (direct and indirect) • Federal $600,000 $900,000 $800,000 $1,300,000 • Provincial $400,000 $600,000 $600,000 $900,000 • Municipal $100,000 $200,000 $200,000 $300,000 • Total $1,100,000 $1,700,000 $1,600,000 $2,500,000 Source: Ontario Ministry of Tourism, Culture and Recreation. The economic impact analysis has been based on multipliers for the Rainbow Country Tourism District.

37. Impact on Existing Facilities • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • Based on our research, it is likely that the establishment of a new convention centre in Greater Sudbury will both benefit and harm existing establishments: • Hotels and local entertainment establishments (such as restaurants, bars and tourist attractions) will benefit from an increase in demand for accommodations resulting from an inflow of delegates to the community. • As noted earlier, the design of the proposed convention centre should incorporate the ability to divide the main exhibit space into multiple areas to accommodate smaller events. This will have an adverse impact on existing convention and conference facilities in Greater Sudbury as it will allow the convention centre to host meetings and gatherings of less than 400 people, thereby directly competing with existing facilities. • To the extent that the new convention centre is established through the redevelopment of an existing facility, this competitive impact may be lessened • The establishment of a convention centre will also adversely impact the City, as events currently held at local arenas may shift to the centre, thereby reducing the revenues generated by these facilities. • Our survey of local hotels and convention facilities indicated that support for the convention centre was almost evenly divided. However, we noted strong support for the convention centre among community organizations and potential users.

38. Overall Conclusions • Executive Summary • Introduction • Market Justification • Facility Assessment • Community Impact • Overall Conclusions • Our study into the potential market support and other implications of a convention centre arose from a proposal to the City to enter into a private-public sector partnership • As a result of our review, we have arrived at a relatively clear estimate of the benefits resulting from the establishment of a convention centre, specifically the contribution towards the local economy. If the projected levels of convention activity are achieved, this contribution would be significant. • In light of the above, we would suggest that the City continue with the next stage of the public-private partnership process – that being the development and issuance of a request for letter of interest and qualifications.

39. kpmg Appendix A Local Demand Assessment Local government agencies • City of Greater Sudbury Community Development Corporation • Sault Ste. Marie Economic Development Commission • North Bay Economic Development Commission • Development Thunder Bay Chambers of commerce • Greater Sudbury Chamber of Commerce • Sault Ste. Marie Chamber of Commerce • North Bay Chamber of Commerce Senior levels of government • FedNor • Ministry of Northern Development and Mines

40. kpmg Appendix A Local Demand Assessment Local hotel establishments • Howard Johnson’s • Ramada Inn • Holiday Inn • Quality Inn Educational institutions • Laurentian University • Cambrian College • Cambrian Foundation • College Boreal

41. kpmg Appendix B Oraclepoll Research Report

42. kpmg Appendix C Local Organizations Surveyed Government • Greater Sudbury Police Service • Ministry of Northern Development and Mines • Ministry of Natural Resources • Ministry of Municipal Affairs and Housing • Indian and Northern Affairs Canada Healthcare • Sudbury Regional Hospital • Northeastern Ontario Cancer Centre Labour organizations • Sudbury District Labour Council • Canadian Union of Public Employees • United Steelworkers of America

43. kpmg Appendix C Local Organizations Surveyed Community organizations • Greater Sudbury Chamber of Commerce • Sudbury and District United Way • Canadian Red Cross • Victorian Order of Nurses Education • Laurentian University • Cambrian College • College Boreal