The Salmon Arm Tennis Club’s construction of a proposed indoor facility with financial help from the city in the form of an interest-free loan for $175,000, as well as a $125,000 contribution, is nearing completion. (Salmon Arm Tennis Club illustration)

The Salmon Arm Tennis Club’s construction of a proposed indoor facility with financial help from the city in the form of an interest-free loan for $175,000, as well as a $125,000 contribution, is nearing completion. (Salmon Arm Tennis Club illustration)

Salmon Arm Tennis Club gets extension to pay back city loan for new indoor facility

Unexpected expenses mean cost overrun as $2.9 million dollar project being built for $1.7 million

City council happily agreed to give the Salmon Arm Tennis Club more time to pay off a loan for the new indoor tennis facility.

Winston Pain explained to council July 8 that the club is experiencing a cost overrun. He said mechanical drawings for the new facility changed just a couple of months ago.

“That created a new set of equipment we had to order and the costs went up accordingly, so we didn’t see that coming.”

Another increase revolved around installation of the electrical, where there was an underestimation of how much work was required.

“So those bills went up substantially,” he said.

On May 1, 2018, the city agreed to loan the club $175,000 over 25 years with no interest. Because of the cost overrun, the club asked to suspend its payments for two years and add the two years to the end of the repayment period.

The current shortfall is about $140,000.

Read more: Olympian helps open new indoor tennis facility in Shuswap

Read more: 2018 – Council supports city loan and contribution for tennis facility

Read more: 2016 – City agrees to support construction of indoor tennis facility

“We were close to completing the project without having to ask this type of request, but by allowing us to do this, what we want to do, if we have to raise additional funds by debt in the next couple of months, we’d like to take the first couple of years to try to pay that debt off as much as we can out of operating revenue,” Pain explained.

He gave an example of the impact. The club had planned to hire an employee the first year at $30,000. Now that probably won’t happen, so the club will have to volunteer-run it for the first one or two years. The $60,000 not spent could cover half the shortfall.

The loan payment to the city is about $585 per month, he said, totalling $7,500 a year.

“If we didn’t have to pay that for two years, that would allow us to service new debt and hopefully pay that new debt off in two to five years.”

Exciting, is how he described recent progress.

“The entire inside is done. The lights are on, the fans and the heaters are up, the paving is done as of today, it actually looks like a tennis club in there right now. It’s exceptionally exciting. We just have to finish off the storefront and we’re looking at occupancy as early as September. If we can get our work done, we can start renting the facility to generate revenue. We are so, so close.”

Coun. Louise Wallace Richmond noted the reality of public projects powered by volunteers and donors is they often take more time. She said she wouldn’t want to sabotage it when it’s so close.

“I’m happy to support it.”

Pain explained the club continues to apply for grants, fundraise and get donations.

“I wish we didn’t have to ask these types of things but the fact is we’re building a $2.9 million dollar building for $1.7 million.”

Read more: 2011 – Investigating indoor tennis facility

Read more: 2016 – No love for indoor tennis court

Read more: Salmon Arm Tennis Club’s indoor facility moving at smooth clip

Coun. Kevin Flynn recounted that when the club came with initial plans, he was persistent about wanting to see a business plan and was somewhat concerned about public money. No more.

“When you see a $2.9 million facility built for $1.7 million…, that’s amazing, just an example of what Salmon Arm can do.”

Pain emphasized it’s been built by the community, not just a few individuals, and the city has been a number one partner.

“We’re not going to stop, we’re going to finish this thing and this really does help us.”

Flynn said he’s thrilled to see so many young people participating in programs, and he expressed his disappointment in the lack of contributions from Tennis Canada and Tennis BC.

“You cannot believe how much I agree with you,” Pain remarked.

All members of council present voted to approve the request for the repayment delay, with Flynn concluding: “That’s carried happily unanimously.”

Mayor Alan Harrison and Couns. Chad Eliason and Tim Lavery were absent.


@SalmonArm
marthawickett@saobserver.net

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