THUNDER BAY – The Thunder Bay Art Gallery has secured key approvals from the city as it works to bring its vision of a new, larger waterfront gallery to life.
City council authorized staff to move forward with signing a 50-year lease with the gallery on Monday after a closed session discussion, though some terms remain to be negotiated.
Council also designated the new gallery a municipal capital facility, allowing it to be exempt from municipal taxes.
The step won’t leave the city on the hook for the building or operating costs, staff reassured councillors.
The gallery is also expected to seek an increase to its $270,000 yearly operating grant from the city, but couldn’t yet say by how much.
Expected to open in 2025, the 38,000-square foot gallery is a key piece of city plans to extend waterfront development south of Prince Arthur’s landing, along with the Pool 6 cruise ship dock, a potential Science Centre, and an extension of the waterfront trail.
The new gallery will include more than twice the display space of the current location at Confederation College, a café, event hall, and outdoor art displays.
The city has invested heavily in that vision, approving a $5 million capital contribution in 2017, and spending millions to extend roads, city services, and parking into the area.
Director of development services Joel DePeuter called the imminent signing of a lease an exciting milestone.
“There’s momentum, which is great,” he said. “There’s been interest from Science North, certainly things are happening, and it would be very exciting to advance waterfront development to the Pool 6 site.”
At a Monday meeting, councillors welcomed the project as a substantial investment in the city’s waterfront, noting provincial and federal governments have contributed over $41 million of the build’s estimated $50 million cost.
The gallery will look to raise another $2.5 to $3 million from the community and other large donors.
“There are some special projects we'd like to deliver – potentially an art commission in the lobby, and… I’d love to see a playground on our grounds, and that’s not in our budget," said Sharon Godwin, the gallery's executive director. "We’re looking at ways to really enhance the building."
Coun. Peng You called the project a much-needed good news story for the city, but joined other councillors in seeking reassurances about its financial viability and financial risk for the city.
He noted council had not yet seen a business plan for the gallery, something Godwin said the organization is in the process of updating from a version produced in 2013.
You also asked about the project’s total budget, with Godwin indicating challenges in the construction industry could throw the answer into uncertainty.
"At this point, it’s going to be north of $49 million,” she said. “We do have that much money in place, but the market is very volatile, and we have other needs.”
Lease has 50-year term
Council directed staff to complete a ground lease with the gallery with a term of up to 50 years, at which point it could be renewed. The property, including the building, would revert back to the city upon the end of the lease.
The agreement would see the gallery pay “nominal” rent, said DePeuter, calling that typical for major community organizations like the Community Auditorium and the Shelter House, which have also been designated municipal capital facilities
The gallery will bear sole responsibility for maintenance of the building, and setting aside funds for long-term capital renewal.
“There’s consideration for funding ongoing replacements, maintenance of the building, and ensuring that at the end of the lease, if the building is returned to the city, that it’s kept in good condition… and that there be funding in place to continue with capital requirements," said DePeuter.
The design doesn't include parking, with the lease expected to provide for visitors and staff to use existing lots.
Just what remains to be negotiated isn’t clear, though DePeuter said major components have been settled.
Neither the city nor the gallery could give a firm answer on when an agreement will be signed, though DePeuter said it should be before the end of the summer.
Godwin has expressed hope work could start by the fall.
Gallery to seek increased funding
The gallery is expected to seek an increase in operating funding from the city, but couldn’t yet estimate how much.
That support, provided through the city's Community, Youth & Cultural Funding Program, has traditionally covered about 30 per cent of its budget.
The gallery is focused on generating more of its own revenue after the move, Godwin said.
Admission and membership revenue is expected to rise with increased visits, though fees will remain "very low" and the gallery may preserve its current pay-what-you-can option.
Other potential revenue sources include renting space to community groups, a larger gift shop, and a third party-operated café.
Godwin also reported recent increases to operating funding from the Canada Council for the Arts and Ontario Arts Council.
“I’m glad you have a plan, because that’s a big issue,” said Coun. You, saying past infrastructure projects have sometimes left the city holding the bag. “Everyone gets so excited, and then suddenly the taxpayer has to take on a big burden.”
Coun. Rebecca Johnson said she’s heard concerns along those lines, asking what would happen if the gallery incurs operating losses.
“Let’s hope it doesn’t happen, but if it does, how are you going to manage that?” she asked.
The gallery has prudently managed its budget for 48 years, Godwin replied, and is used to making the most of limited funds.
“That’s how we'll continue to operate,” she said.
Designation as a municipal capital facility
The designation of the gallery as a municipal capital facility under Ontario’s Municipal Act will allow it to be exempt from municipal and education taxes, and development charges.
The gallery is already exempt from those taxes in its current location, an exemption offered to many galleries across the province.
"The designation is available for major tourism and cultural facilities – the types of facilities the city might operate, if it weren’t for this group," said DePeuter. "So that’s where you see mutual benefit."
The lands in question were previously designated for community use and not intended to generate revenue, staff noted.
Questions over details of the arrangement shouldn’t overshadow the clear benefits of the project, said Mayor Bill Mauro.
"While we all have our concerns about this, we see it as a phenomenal project,” he said. “And it’s not the only time the city has entered into such an arrangement.”
Motions approving completion of the lease agreement and designating the gallery as a municipal capital facility passed unanimously on Monday.
The city will still need to pass a bylaw to make the designation official after a lease is signed.
