Appendix E - Ice Options
Perth and Kinross Council · 4 September 2024
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Appendix E Ice Options 1. EXECUTIVE SUMMARY 1.1 On 22 January 2024, the findings and recommendations of the Transformation of Leisure Assets Review was presented to Council (Report 24/19 refers). Council agreed to: 1. Note the Review findings set out in section 5 of the report. In relation to paragraph 5.3, considers that the information on past and current usage as well as future trends does not provide sufficient evidence to support the removal of ice from the mix of activities available at PH2O. 2. Approves the recommendations set out in section 6 of the report, subject to deletion of recommendation 2 and replacement with: (i) Further work to be undertaken on curling usage, market trends, and affordability factors, including current curling demand and usage for 2023/24 and consideration of growth opportunities for curling. (ii) Options for the sustainable provision of ice at PH2O being included within the transition plan and rescoping exercise referred to in recommendation 3 in section 6.1. (iii) Officers be instructed to include an ice rink component within a fully costed PH2O proposal to be brought to Council in August 2024. 3. Approves the next steps set out in section 7 of the report and additionally asks that: (i) The Council’s contract for services with Live Active Leisure maintains family-friendly leisure swimming as a core service requirement, as an activity which enables a broad section of the local population to be healthy and active. (ii) The design of a new swimming pool for Perth, as part of the rescoped PH2O project, reflects this requirement and will allow a family-friendly leisure swim offering alongside fitness and lesson swims. 1.2 This appendix provides details of the work undertaken to progress the instruction of Council in relation to undertaking further work on curling/ice provision and provides more information to support recommendations 5a and 5b in the covering report. Details of options for other leisure facilities requested by Council are contained in Appendix C. 2. BACKGROUND
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2.1 In 2012 Perth Ice Rink (1988) Ltd transferred ownership and management of Dewars Centre in Perth to Live Active Leisure (LAL) amid requirements for essential investment in the building and replacement of specialist ice plant. At time of transfer the building was not self-sustaining, and amid rising energy costs and the impact of Covid-19 this has worsened with the running of the building requiring a subsidy of £8.49 per user/per visit previously reported in the Transformation Review of Leisure Assets. 2.2 In October 2021 Council instructed the development of an Outline Business Case (OBC) for the PH2O project to enable it to be considered within the Council’s future capital programme. PH2O Outline Business Case (OBC) was completed and presented to members in February 2022. The OBC tested a long list of options and undertook sensitivity testing on the preferred Strategic Business Case option which had an increased estimated capital expenditure cost of £85- 90M (due to construction inflation), against a smaller scale core option (excluding leisure water, bowling, gym/fitness and health spa) which had a reduced capital expenditure cost of £67-70M. 2.3 The Council approved the preferred option for PH2O at an outline cost of £85- 90M on 23 February 2022 (Report 22/36 refers). 2.4 In March 2023, the Council decided to pause the project and instructed officers to undertake a Transformation Review of Leisure Assets (the ‘Leisure Asset Review’), on the grounds of overall project affordability with increased loan charge rates, energy price rises and general inflation pressures. The existing budget provision for the project of £90 M was retained in the budget pending the outcome of the review. 2.5 The Transformation Review of Leisure Assets, submitted to Council on 22 January 2024 focused on: Current and future usage trends for key leisure activities Accessibility of leisure facilities for the population of Perth and Kinross Cost and usage analysis for key facilities Energy efficiency considerations; Perth leisure provision: key issues 2.6 The review recommended that the facilities mix previously proposed for PH2O should be reduced in light of findings in relation to usage and market trends, and affordability factors and that three facility’s functions (Perth Leisure Pool/ Dewars/ Bells) be co-located on one site for efficiency. 2.7 In addition to this Council instructed that facilities modelling be undertaken to establish the feasibility of incorporating a sustainable ice component into the revised PH2O proposal.
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2.8 Council also instructed that additional work be undertaken to explore the current and future projections relating to curling, considering: curling usage market trends affordability factors current curling demand, usage for 2023/24 and, consideration of growth opportunities for curling 2.9 In accordance with Council instruction Council officers have engaged with the following key stakeholders: Scottish Curling representatives of Perth Curlers sportscotland Council/ LAL officers Integratis, sport and leisure consultants 2.10 In addition to this, Council officers have completed site visits to other facilities to understand alternate styles and models for ice provision. 3. EVIDENCE OF DEMAND 3.1 As instructed, modelling has been undertaken to establish the feasibility of incorporating an ice component into the PH2O base case proposal. Officers have engaged with key representatives from Scottish Curling, World Curling and sportscotland to review our initial data regarding curling demand/usage, potential future growth and viable business model options for PH2O. 3.2 Data provided does not substantiate predictions of additional projected growth in usage, officers are therefore satisfied that the data provided to Council relating to curling demand in January 2024 is accurate. 3.3 The most recent 2023/24 data shows that 600-700 curling members account for 80-90% of 11,112 curling visits to Dewars per year, plus approximately 5,288 visits to events a year, providing a 2023/24 total income of £178,428. 3.4 There is a national and local declining market trend in curling participation - the facilities operate in the curling season September to March (27 weeks) only. The Scottish Curling national target is for participation to increase by 6% per annum. 3.5 Scottish Curling have provided data which shows that across Scotland national curling membership is in steady decline:
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3.6 Data relating specifically to the Dewars Centre confirms the same ongoing decline: 3.7 Assuming the market trend stabilizes rather than diminishes, a 6% rise in usage from 11,112 visits translates to 666 visits additional visits. 3.8 During the 2023/24 season, Dewars hosted 9 curling competitions over the course of 26 weekends, with 4 of these events being exclusive curling club weekends.
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3.9 Hosting future National and International curling events cannot be guaranteed due to the bidding process set by the Scottish Curling and the World Curling (former World Curling Federation). World Curling has bidding guidelines for any host site of a WCF Event. The guidelines state a major contribution to the successful outcome of a bid would be evidence of support, both financially and value in kind, of Government and other agencies. This includes any costs anticipated as a result of any hosting responsibilities outlined in the bidding guidelines. 3.10 Of the 22 ice rinks in Scotland, there are five within a 45 minute to 1 hour drive of Perth. 3.11 The current large scale 8 lane facilities at Dewars are most heavily used in the early weekday evenings, with low usage at other times: 3.12 Where there is not a curling event booked, LAL provides skating on weekends The demand for this was 8,442 users in 2023-2024. 3.13 Current charges for curling sessions are considered low and Scottish Curling/ Perth curling community consider that charges could increase by 10-25% without significantly reducing participation. Pricing increases have been factored into financial forecasts. 3.14 Scottish Curling considered that if facilities were closed for redevelopment for two or more years, it is likely that 25-40% of current Dewars curlers would not return to a redeveloped/ new facility. This potential decrease in participation is a crucial factor, as long-term interruption in ice availability could further
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adversely affect the long-term sustainability, viability and demand/ need for ice provision. 3.15 Options for ice have been considered over 4, 6 or 8 lanes: 4 lanes are considered to be too small to sustain the aspirations of Perth curlers and Scottish Curling with an inability to host significant competitions. 6 lanes are considered the minimum size of ice to host competitions and accommodate peak demand in Perth. 8 lanes are considered too large for current demand but optimum for national/ international events. 3.16 The current facilities are regarded as suitable for events and world level events have been staged at Dewars Centre in the past. The 8 lane rink benefits from ample viewing galleries, adjacent accommodation to support multiple participants and teams and social/ catering/ licensed bar facilities. These facilities are considered essential to provide a full-scale event. For international events broadcasting facilities would also be sought. The current facilities, being separate from the main Perth Leisure Pool (PLP), allow large weekend events to be hosted concurrently with normal swimming pool activity. Co-locating facilities would require careful planning/ sharing of accommodation especially catering and/or licensed premises. 3.17 Currently Dewars and PLP are supported by 374 parking spaces. Initial discussions with planning colleagues suggest future provision for any new development for approximately 70 car parking spaces – 10% less users are projected due to parking reductions from the current levels, this has been factored into income and expenditure projections for all options. 4. ICE PROVISION OPTIONS 4.1 Options were developed around key factors of: demand and future growth potential scale of facilities / number of rinks 4.2 Ice options have been modelled as extensions to the PH2O base case options detailed in Appendix B considering the possibility of newbuilds or refurbishments/ extensions on different buildings and sites. 4.3 It is accepted that during summer, the revenue from ice operations does not meet expenses, making it economically unsustainable to run these leisure services. However, financial projections indicate that ice facilities, if incorporated within a multi-purpose sports complex and only operational from October to March, can cover running costs. Therefore, curling facility operating costs within
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these options are modelled on a seasonal operation, with closures anticipated for over 26 weeks annually, aligning with the current operational strategy. 5. OPTIONS APPRAISAL Option F – New Build on Site of Existing Dewars Centre – Base Case Option B (from Appendix B) + Ice 5.1 Construction of a new build PH2O leisure centre on the site of the existing Dewars Centre, with swimming pools, dry sports and 6 lane ice rink. Existing PLP to remain operational (if possible) throughout the construction of the new build and demolished once PH2O opened, but loss of ice/gym facilities for at least 2 years. Significant disruption on site over an extended period. 5.2 This option benefits from shared accommodation and energy/ plant arrangements with pool/ ice (heat/ energy) generation in a new facility. 5.3 Based on Scottish Curling’s advice at 4.14 about the likelihood that 25-40% of curlers would not return if facilities were closed for two or more years, this presents issues with the viability of this option as it requires the closure of Dewars during construction. 5.4 Additional costs to add ice provision to Base Case Option B:
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Capital Investment Required Base Case Cost Additional Ice Cost Total Refurbishment £65M £13M £78M Revenue Investment Required Capital loan charges £2.9M rising over 40 years £0.6M rising over 40 years £3.5M rising to £5.4M over 40 years Operating Subsidy (2028/2029) £1,228,840 £0 £1,228,840 Total Annual Revenue Investment: £4,728,840 initially rising with inflation Option G - Refurbish Dewars, Demolish Perth Leisure Pool – Base Case Option C (from Appendix B) + Ice 5.5 Refurbishment and extension of the existing Dewars Centre, with swimming pools, dry sports and retained ice rink. Existing PLP to remain operational (if possible) throughout the construction of the new build and demolished once PH2O opened, but loss of ice/gym facilities for at least 2 years. Significant disruption on site over an extended period. Significant disruption on site over an extended period.
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5.6 This option benefits from shared accommodation and energy/ plant arrangements with pool/ ice (heat/ energy), but likely not as efficiently as a new build. 5.7 Based on Scottish Curling’s advice at 4.14 about the likelihood that 25-40% of curlers would not return if facilities were closed for two or more years, this presents issues with the viability of this option as it requires the closure of Dewars during construction. 5.8 Additional costs to add ice provision to Base Case Option C: Capital Investment Required Base Case Cost Additional Ice Cost Total Refurbishment £65M £13M £78M Revenue Investment Required Capital loan charges £2.9M rising over 40 years £0.6M rising over 40 years £3.5M rising over 40 years Operating Subsidy (2028/2029) £1,228,840 £0 £1,228,840 Total Annual Revenue Investment: £4,728,840 initially rising with inflation Option H – Refurbish Perth Leisure Pool, Demolish Dewars - Base Case Option D (from Appendix B) + Ice
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5.9 Refurbishment and extension of the existing PLP to form PH2O, with retained swimming pools (excluding leisure water), dry sports and 6 lane ice rinks. Existing Dewars Centre to remain operational (if possible) throughout the refurbishment and extension works and demolished once PH2O opened, but with loss of swimming facilities for at least 2 years. Significant disruption on site over an extended period. 5.10 This option benefits from shared accommodation and energy / plant arrangements with pool / ice (heat / energy) arrangements in a new facility, but likley not as efficiently as a new build. 5.11 Additional costs to add ice provision to Base Case Option D: Capital Investment Required Base Case Cost Additional Ice Cost Total Refurbishment £70M £14M £84M Revenue Investment Required Capital loan charges £3.2M rising over 40 years £0.6M rising over 40 years £3.8M rising over 40 years Operating Subsidy (2028/2029) £1,228,840 £0 £1,228,840 Total Annual Revenue Investment: £5,028,840 initially rising with inflation Option I – New Build at Thimblerow – Based Case Option E (from Appendix B) + Ice
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5.12 Construction of a new build PH2O leisure centre on the site of the existing Thimblerow Car Park, with swimming pools, dry sports and 6 lane ice rink. As with other options, based on planning advice, 70 spaces of car parking included on site. However, more parking available within the city centre five minutes walking/wheeling. 5.13 This option benefits from shared accommodation and energy/ plant arrangements with pool/ ice (heat/ energy) generation in a new facility 5.14 Added benefits: transition benefits (no disruption to LAL services, continuity of employment for LAL staff) relocating a 400,000 footfall to the city centre supporting economic growth; and opportunity to deliver a significant priority housing site in Perth in the medium term. 5.15 Additional costs to add ice provision to Base Case Option E: Capital Investment Required Base Case Cost Additional Ice Cost Total New Build £61M £19M £80M Revenue Investment Required
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Capital loan charges £2.7M rising to £4.8M over 40 years £0.9M rising over 40 years £3.6M rising over 40 years Operating Subsidy (2028/2029) £1,228,840 £0 £1,228,840 Total Annual Revenue Investment: £4,828,820 initially rising with inflation Option J – Bell’s Sport Centre 5.16 Refurbishment of the existing Bell’s Sports Centre dome to create a new standalone ice facility. This is currently vacant with gym and fitness studio provision having moved to the Dewars Centre. 5.17 Bell’s Sports Centre is a Category B listed building and Council has instructed options for its future use be considered. 5.18 Surveys and assessments of the current building are ongoing but conversion into a 6-lane curling rink is potentially possible. This would be a standalone facility, likely separate from the Gannochy Pavilion building. 5.19 Additional cost to provide ice at Bell’s Sport Centre Capital Investment Required Base Case Cost Refurbishment £15M Revenue Investment Required Capital loan charges £0.67M per annum rising over 40 years Operating Subsidy (2028/2029) £400,000 5.20 Based on delivery via LAL or equivalent, revenue operating costs are estimated at £400,000. Rates may be an additional (£300,000) if building becomes vacant. Option K – User-Led Operation of Dewars Centre 5.21 Curling bodies and/or other interested parties take on lease of Dewars Centre on a full repairing and insuring basis. Assumes removal of fitness gym/studio equipment as part of LAL exit from the building as this service would be provided at PH2O. It would be for curling bodies to determine the commercial case. However, the Council would have no ongoing financial liability for any element of ice provision or maintenance and repair of building or plant.
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5.22 Assumption that PH2O would be built at Thimblerow to allow PLP to remain operational during transition period. Following the completion of PH2O the Leisure Pool would be demolished and the remaining site developed for housing. This would result in the loss of 100 potential new houses compared to the preferred Base Case option set out in Appendix B. 6. FINANCIAL OPTIONS APPRAISAL FOR ADDITION OF ICE TO BASE CASE OPTIONS Option Additional Capital Cost Additional Ice Revenue Cost Comment F - New build at PLP/ Dewars site, Glasgow Road – Base Case Option B + Ice £13M Capital loan charges: £0.6M (rising over 40 years) Operating Subsidy: £0 Maintaining swimming will mean that ice will likely be lost for 2- years plus, based on Scottish Curling’s advice if facilities were closed it was likely that 25-40% of current Dewars curlers may not return. Total: £0.6M initially G - Refurbishment of Dewars, Base Case Option C + Ice £13M Capital loan charges: £0.6M (rising over 40 years) Operating Subsidy: £0 Maintaining swimming will mean that ice will likely be lost for 2- years plus, based on Scottish Curling’s advice if facilities were closed it was likely that 25-40% of current Dewars curlers may not return. Total: £0.6M initially H – Refurbishment of Perth Leisure Pool - Base Case Option D + Ice £14M Capital loan charges: £0.6M (rising over 40 years) Operating Subsidy: £0 Swimming will be lost for 2+ years Total: £0.6M initially
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I – New build at Thimblerow – Base Case Option E + Ice £19M Capital loan charges £0.9M (rising over 40 years) Operating subsidy: £0 Ice rink on 4th floor at Thimblerow. Both swimming and ice retained during construction period. Total: £0.9M initially J - Bells £15M Capital loan charges £0.67M (rising over 40 years) Operating Subsidy: £400,00 Offset against obligations of maintaining/ owning the now B listed building. Assumed LAL or equivalent operation. K – User led operation of Dewar’s Centre £0 £0 Asset would be managed and operated by external community group 7. CRITICAL SUCCESS FACTORS 7.1 Critical success factors have been developed to appraise the options as they were for the original PH2O project and are as follows: Strategic fit 1. Delivers facilities which meet usage demands as per the approved recommendations of the Transformation of Leisure Assets Review 2. Reduces environmental impact through significant improvement in energy consumption and supporting a just transition to net zero 3. Represents the best use of available land with Council control/ ownership Value for money 4. Maximise the reduction in operating deficit vs business as usual Supplier capacity and capability 5. Solution reflects an appropriate/ manageable level of construction risk Affordability 6. The project can secure funding to the proposed level of capital expenditure 7. The project represents the most cost-efficient way of delivery the services as per the approved recommendations of the Leisure Asset Review
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Achievability 8. Maintains access to services during construction phase and maximises ongoing LAL financial viability during transition periods between facilities 8. ICE OPTIONS ASSESSMENT 8.1 The site options were assessed by the Senior Officer Group against the Critical Success Factors noted in section 7. Critical Success Factors Option 1 2 3 4 5 6 7 8 F - New build at PLP/ Dewars site G - Refurbish Dewars, Replace Perth Leisure Pool + Ice H - Refurbish Perth Leisure Pool, Replace Dewars + Ice I – New build at Thimblerow + Ice J - Bells K - User led operation of Dewar’s Centre N/A N/A N/A N/A N/A 9. ICE PREFERRED OPTION 9.1 The recommendation of officers is that there is no case for the provision of ice beyond the closing date of the existing Dewars Centre due to lack of financial viability, significant additional borrowing costs, lack of future user base and lack of alignment strategic direction of Council, based on several key factors: Financial considerations: The operation is not financially viable without incurring significant additional borrowing costs, with the lowest priced option requiring a £13m capital investment with a supporting revenue cost of borrowing of £600,000 per annum. User base: Trends locally and nationally show a decline market trend for curling.
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Strategic alignment: continuing ice provision does not align with the principle set out in the Corporate Plan 2022/23-2027/28 to focus on need informed by evidence and data, rather than demand; and to make best use of available assets including transferring or otherwise disposing of those which can best serve the community in a different way. Likewise, it does not align with the overarching principles in our Investment Blueprint to support the delivery of sustainable public services through effective management of our assets, due to significant annual revenue costs when measured against benefits to the wider community: £13M-£19M capital investment to support 600/700 curlers Declining market with no evidence of growth potential Fewer than 0.85% of curlers come from Scottish Index of Multiple Deprivation Q1 (SIMD)