With one year of operations under its belt, Canmore’s $39 million Elevation Place is doing better than originally planned, financially.
While it still has an operating deficit of $1.38 million in its first year, it recaptured 53 per cent of costs as opposed to an original target of 49 per cent.
Manager of recreation services Jim Younker said the $300,000 positive variance from budget in its first year shows the Town’s enterprise model is working well for the facility.
“Elevation Place has exceeded all benchmarks with almost a third of our permanent population choosing to buy a membership and membership is key to the enterprise model,” Younker said, adding in 2014 it is administration’s goal to recover 58 per cent of operating costs. “We have our sights a little higher than the budget approved by council.”
The first five months of the year, said Younker, show a cost recovery of 69 per cent.
For 2013, total revenues for Elevation Place were $1.54 million and expenses were $2.92 million. The goal for 2014 is to see revenues of $2.25 million and expenses of $3.88 million.
Younker said it is reasonable to expect that within two years Elevation Place and the Canmore Recreation Centre together will operate with a total operating deficit similar to what the municipality had before Elevation Place was built.
After a year of operations, he said, the membership structure for Elevation Place will also change at the end of June with the Fit and Peak level being eliminated. Younker said the majority of memberships are at the Splash and Go Beyond level.
There have also been changes to the fitness area – with it expanding into the multi purpose rooms to establish more stretching and cardio space.
“With almost 4,000 members the demand for fitness space exceeded the supply,” Younker said. “In between classes and core classes we want to allow members to go in (the added space) and train as well as explore opportunities for advanced fitness testing, personal training, nutritional consulting and expanded core training.”
When it comes to the fitness space competing with private businesses in the community, Younker reported back to council results of stakeholder engagement with the industry. Administration met with Life Works, Bill Warren Training Centre, Athletic Evolution and CrossFit Canmore to determine the effect Elevation Place has had on their operations.
He said one private gym saw decreased membership; another saw an increase and the other two were largely unaffected. Two have seen a definite decline in participation in programming. One is updating its equipment to be more competitive and another is doubling in size at a new location.
He also said two are interested in offering personal training to Elevation Place members and three are interested in providing a discount to members to use their facilities.
“There are a couple of ideas to work with them and encourage them to grow their businesses in niches they occupy and not necessarily exclude them from being involved in recreation services,” Younker said, adding operators also suggested eliminating the Fit membership so the Town would not compete directly with them.
For a municipal service, using an enterprise model to run Elevation Place is a departure from how that type of facility is typically managed. According to a staff report to council, the business approach has four key principles: provide extraordinary experiences and service; create a membership structure that engages more of the community to use Elevation Place more often and purchase more services; lead the way in providing quality engaging programs and drive revenue as the primary means to achieve financial outcomes.
Administration has been asked to present the model and results so far at the Alberta Recreation and Parks Association annual conference and may also present at the Alberta Urban Municipalities Association conference.
“I think it is interesting there should be that attention focused on the change of mindset we are creating for operating recreation facilities,” said Mayor John Borrowman.
