Mayor and Council Cynthia Beach, Commissioner, Sustainability & Growth Group Lanie Hurdle, Director, Recreation and Leisure

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1 CITY OF KINGSTON REPORT TO COUNCIL Report No.: TO: FROM: RESOURCE STAFF: Mayor and Council Cynthia Beach, Commissioner, Sustainability & Growth Group Lanie Hurdle, Director, Recreation and Leisure DATE OF MEETING: SUBJECT: International Sailing Federation (ISAF) World Sailing Championship 2014 City of Kingston Partnership EXECUTIVE SUMMARY: In the summer of 2010, CORK/Sail Kingston approached Recreation and Leisure Services staff to discuss the possibility of submitting a bid to host the International Sailing Federation (ISAF) World Sailing Championship in CORK/Sail Kingston is the lead organization for the bid submission and has identified all facilities and amenities that would be required to host this event. Staff reviewed facility and amenity requirements and have confirmed that the event could be accommodated with capital upgrades to Portsmouth Olympic Harbour (POH) and with the collaboration of other partners such as Queen s University, the Canadian Yachting Association, the Provincial Government and St Lawrence College. The 2014 ISAF World Sailing Championship is one of the largest sailing events in the world and is expected to attract about 1,000 boats, 1,400 competitors from 130 member countries and about 350 journalists. The total estimated budget for this event is $7M, which would include contributions from Sport Canada and the Province of Ontario. The Kingston Economic Development Corporation (KEDCO) has produced an economic impact assessment which estimates $30M in economic activity in Kingston from this 2014 ISAF World Sailing Championship. The City partnership in this event would include dedicating POH to this event for a full month, making capital upgrades to POH and site as well as putting temporary amenities on site to accommodate the event for a maximum contribution of $920,000. An estimated $105,000 (based on 2014 rates) would be allocated to the use of POH and $815,000 to capital upgrades and temporary amenities. The breakdown of in kind services, capital contribution and event related costs are outlined in the option section of this report. It should be noted that the City provides POH to CORK/Sail Kingston at minimal cost every year for regatta events for a total of fifteen (15) days which is equivalent to about $45,000. Annual CORK/Sail Kingston event would not take place should the City be successful in hosting the 2014 ISAF World Sailing Championship. This report is time sensitive as it requires a financial commitment for a preliminary bid submission due on October 15 th, 2010 and a second round bid submission on December 1 st, 2010, times during which current Council will be lame duck. The International Sailing Federation (ISAF) is the rights holder for the Sailing World Championships which is held every four years. The ISAF recently decided to advance the event from 2015 to 2014, advancing the bid deadlines from 2011 to Should a commitment not be made to this event, CORK/Sail Kingston will not be in a position to submit a preliminary bid on October 15 th, 2010.

2 REPORT TO COUNCIL Report No.: Page 2 - RECOMMENDATION: THAT Council endorse a maximum commitment of $920,000 to the International Sailing Federation (ISAF) World Sailing Championship 2014 bid submission; and THAT Council direct staff to include $105,000 (2014 rates) of the contribution to be made through the provision of Portsmouth Olympic Harbour at no cost for 30 days in the 2014 operational budget and $815,000 for capital upgrades to City marina facilities and event related costs in the capital and operational budgets; and THAT Council delegate authority to the Chief Administrative Officer to complete details of the second round bid submission for the Sailing Federation (ISAF) World Sailing Championship 2014 due on December 1 st, 2010.

3 REPORT TO COUNCIL Report No.: Page 3 - AUTHORIZING SIGNATURES: Cynthia Beach, Commissioner, Sustainability & Growth Gerard Hunt, Chief Administrative Officer CONSULTATION WITH THE FOLLOWING COMMISSIONERS: Terry Willing, Community Services Denis Leger, Transportation, Properties & Emergency Services Jim Keech, President and CEO, Utilities Kingston N/R N/R N/R (N/R indicates consultation not required)

4 REPORT TO COUNCIL Report No.: Page 4 - OPTIONS/DISCUSSION: 1. Sailing Federation (ISAF) World Sailing Championship 2014 In 1969 a group of enthusiastic sailors decided to establish CORK to host international sailing events of Kingston. Leading up to the 1976 Olympics, the CORK regatta offered excellent training for sailors, coaches and officials and has since become a fixture on the international calendar. CORK has hosted championships for international classes out of the Portsmouth Olympic Harbour for the past 36 years. Working closely with the Ontario Sailing Association and the Canadian Yachting Association, CORK established Youth Fest in the mid eighties. Youth Fest was a two-day training event held each year, just prior to the CORK regatta. Beginning in 2009, CORK introduced the new four day International regatta, which focuses on youth and development classes. The annual CORK regatta includes ISAF Grade 1 event for Laser and Laser Radial, as well as other Olympic and international classes, national classes, offshore classes and a special event for the Optimist class. With a total participation of more than 1000 boats, it is attracting sailors not only from North America but from all over the world. CORK/Sail Kingston approached Recreation and Leisure Services to put in a bid to host the 2014 International Sailing Federation (ISAF) World Sailing Championship. CORK/Sail Kingston has also approached other partners required for this event including Queen`s University, the Kingston Economic Development Corporation (KEDCO), Kingston Yachting Club and St Lawrence College. All partners have shown an interest in being involved with this event. As the lead applicant to this bid, CORK/Sail Kingston will work out partnership details with other organizations with support from City staff. The 2014 ISAF World Sailing Championship is expected to attract competitors from 130 countries. Athletes would race for sixteen (16) days on six (6) courses competing for ten (10) World Championships in August The Sailing World Championships will determine 50% of the available spots for nations at the 2016 Olympic sailing competitions. ISAF and its Olympic Commission are actively promoting the development of sailing outside Europe. It is CORK/Sail Kingston and City staff`s understanding that the U.S. Sailing does not intend to bid for the 2014 event but would support a bid by CORK/Sail Kingston. It is also CORK/Sail Kingston s understanding that there are no other bids currently being considered in North America. 2. Event Budget - City of Kingston Contribution and Economic Impact The total event budget is estimated at $7M. Sport Canada guidelines limit their contribution to 35% or $2,450,000. The Provincial Guidelines limit their contribution to 35% of the total, excluding sanction fees, or $2,275,000. The balance of the budget ($2,275,000) is proposed to be covered by entry fees ($725,000), City of Kingston contribution ($920,000), in kind and cash sponsorship, in kind or in cash donations from individuals and foundations and in kind and cash from other partners. CORK/Sail Kingston reviewed requirements to host the 2014 ISAF World Sailing Championship. The availability of Portsmouth Olympic Harbour (POH) is critical to host this event. Should POH be made available for a period of thirty (30) days, capital upgrades to the facility as well as temporary amenities on site would be required. The value of providing POH at no cost for a period of thirty (30) days is estimated at $105,000, based on 2014 fees and charges rates which have been calculated with the 2010 value ($92,000) plus 3% inflation on a yearly basis. The City currently provides a yearly in kind contribution of about $45,000 for the use of POH by various regatta events. CORK/Sail Kingston has confirmed that there would not be any other regatta events in 2014 should the City be successful in hosting the World Sailing Championship.

5 REPORT TO COUNCIL Report No.: Page 5 - It is recommended that the City invests another $815,000 in capital upgrades and event related amenities to be able to better accommodate the event and to serve long term needs and improvements to City s marina infrastructure. Capital funds would be allocated to the following items: a. upgrade to shower and change room facilities, b. relocation of overhead power, c. construction of two new launch ramps, d. purchase of a new crane, e. leveling of North East End corner, new retaining wall; f. improvements to PA system. It should be noted that these upgrades and equipment will also be long term investments in the City`s infrastructure and will be useful to ensure the growth of yearly regattas. These capital upgrades are also part of the Marina Strategy which was endorsed by Council in Additional event related expenses include additional security fencing and project management support to coordinate logistics for this international level event. Should the City of Kingston be selected as the host City for this event, there would be considerable work to be done with partner organizations and volunteers to coordinate logistical details for site layout, transportation, sponsorships/donations, accommodation and other venues required. There is not sufficient capacity and/or expertise within the City to provide this support. The use of POH for 30 days means that all seasonal boaters will be relocated to Confederation Basin and that the City would not be able to accommodate any transient boaters during that period of time. The loss of revenues related to transient boaters is estimated to be up to $200,000 for the 30 day period. KEDCO completed an economic impact assessment for this event which has an estimated economic activity of $30M for the City of Kingston. This assessment is based on operational costs only and as a standard practice does not include in kind transactions and economic activities that do not take place in the host community (i.e. ISAF Sanction fee). The assessment also identifies the potential of creating up to 337 jobs resulting in wages and salaries close to $10M. The level of municipal taxes supported within the City of Kingston is estimated at about $1.5M from this event. 3. Governance and Risks CORK/Sail Kingston is the lead applicant for a bid submission to host the 2014 ISAF World Sailing Championship. It is proposed that an Event Committee be established composed of members of CORK/Sail Kingston and representation from other partner organizations such as the City of Kingston, KEDCO and Queen s University. Due to the short time frame, between the changes in bid and event schedule announced by ISAF and the submission of a report to Council (prior to lame duck), CORK has not had the chance to establish the Event Committee.

6 REPORT TO COUNCIL Report No.: Page 6 - The following table outlines some of the high level risks related to this event and what strategies are being implemented to mitigate these risks. A more detailed risk plan would be developed if the City was selected to host the event. Issues/Concerns Risk Mitigation 1. Facility not adequate to accommodate the Event 2. Significant capital investments required for the event. 3. Clear roles and responsibilities 4. Skills and expertise to coordinate an international event. 5. Insufficient funds to host the Event. Existing facilities and amenities may not meet requirements and standards to host the event. Capital upgrades be implemented which may not be sustainable. Work could be duplicated or missed if roles and responsibilities are not clearly defined amongst partners. CORK/Sail Kingston may not have the time and expertise to coordinate an international event which could result in an unsuccessful event. Contributions from the federal level and provincial level are expected. City contributions and expected entry fees still leave a gap of $630,000 in the event budget. Review of bid requirements identified some shortfall in facilities. Capital upgrades required are to be included in capital budget. The proposed capital upgrades would be investments in the City s marina infrastructure and are in line with the Marina Strategy endorsed by Council in These upgrades would allow the City to expand its operations at POH. Project charter should be developed as soon as the Event Committee is established. CORK/Sail Kingston, the City of Kingston and KEDCO have agreed that a dedicated project management resource with expertise in planning significant events be retained to coordinate logistics and partnerships. The Event Committee, once established, will initiate work to secure sponsorship and donations. Some donations are proposed to be in kind and to be committed by other partners. Formal partnership commitments will be required. EXISTING POLICY/BY LAW: N/A NOTICE PROVISIONS: N/A ACCESSIBILITY CONSIDERATIONS: N/A

7 REPORT TO COUNCIL Report No.: Page 7 - FINANCIAL CONSIDERATIONS: A total maximum contribution of $920,000 is being recommended. $105,000 of this amount is the value to waive fees for the use of Portsmouth Olympic Harbour (POH) for 30 days. $815,000 is being recommended through an investment in capital upgrades to POH and event related costs. The capital upgrades and event related costs are to be budgeted for in the 2012 and 2013 capital and operational budgets. CONTACTS: Lanie Hurdle, Director, Recreation and Leisure Services (613) ext OTHER CITY OF KINGSTON STAFF CONSULTED: Luke Follwell, Manager, Recreation Facilities Darren Smith, Acting Supervisor, Community Facilities Jonathan Nicholls, Financial Analyst Others Consulted Gary Kelly, Manager, Sports Tourism, KEDCO Rob Carnegie, Director, Tourism Marketing & Development, KEDCO Tim Irwin, President CORK/Sail Kingston EXHIBITS ATTACHED: Exhibit A Economic Impact Assessment Kingston Economic Development Corporation

8 EXHIBIT A 2014 ISAF Sailing Worlds Pre-Event Estimated Economic Impact Assessment August 2010 Disclaimer: The results of this economic impact analysis are intended to act as a guide and are not considered definitive of the actual events. All projections should be considered an event s potential economic impact. The projections are based on standardized spending estimates that may or may not reflect that of the highlighted event s attendees. In addition, the projections are based on the organizer s assumptions regarding attendance, composition and characteristics. These forecasts are subject to uncertainty and evolving events, therefore actual results may vary from estimated results. Additionally, these forecasts only recognize the economic benefits of the event, and do consider any displacement or substitution costs that may occur as a result of hosting the event. Release of Liability Statement: CORK releases Tourism Kingston A Division of the Kingston Economic Development Corporation from any and all claims which it may have relating to or resulting from the use of the results by CORK or its agents. The following analysis provides an assessment of the estimated economic impact of the 2014 ISAF Sailing Worlds, for Kingston Ontario, as generated by the Sport Tourism Economic Assessment Model (STEAM).

9 Contents Pre-Event Economic Impact Results for Ontario and the City of Kingston... 3 Appendix 1: Glossary of Terms used by STEAM... 6 Page 2

10 Pre-Event Economic Impact Results for Ontario and the City of Kingston Hosting the 2014 ISAF Sailing Worlds with the addition of other events provides many benefits to the City of Kingston; building community spirit, pride and excitement, development of a strong base of qualified volunteers in our community, building a legacy for the future and increasing economic activity and tourism to our community and region. The combined total of visitor, capital, and operational spending as a result of the 2014 ISAF Sailing Worlds are estimated to total $19,701,613. These expenditures generate a total of $44,959,212 dollars of economic activity in the province of Ontario, of which $29,811,599 is in the City of Kingston. The 2014 ISAF Sailing Worlds is estimated to provide a total of jobs for City of Kingston and an additional 73.8 jobs for the remainder of Ontario. These jobs supported a total of $13,869,365 dollars in wages and salaries for Ontario. The net increase in economic activity (GDP) in the province as a result of the initial expenditures of the event is $21,014,174. The total level of taxes supported by The 2014 ISAF Sailing Worlds is estimated at $9,726,295. Of this, $4,367,836 is allocated to the federal government, $3,518,940 to the provincial government, and $1,839,519 to municipal governments across Ontario. The level of municipal taxes supported within the City of Kingston is estimated to be $1,494,788. Page 3

11 Table 1 Potential Economic Impact for the City of Kingston by Source Operations Visitors Capital Total Initial Expenditure $4,538,430 $14,963,183 $200,000 $19,701,613 Gross Domestic Product $2,662,682 $10,139,468 $71,191 $12,873,342 Wages & Salaries $2,165,837 $7,330,236 $46,966 $9,543,040 Employment (Full-year jobs) Industry Output $7,045,479 $22,507,915 $258,205 $29,811,599 Total Taxes Federal $533,932 $2,410,811 $19,383 $2,964,126 Provincial $350,003 $2,159,712 $19,654 $2,529,369 Municipal $116,845 $1,375,124 $2,819 $1,494,788 Total $1,000,780 $5,945,647 $41,856 $6,988,283 Page 4

12 Table 2 Combined Economic Impact Total Ontario Local Area Kingston Rest of Ontario Initial Expenditure $19,701,613 $19,701,613 $0 Gross Domestic Product Direct Impact $7,362,351 $7,362,351 $0 Indirect Impact $7,994,463 $3,009,806 $4,984,656 Induced Impact $5,657,360 $2,501,184 $3,156,176 Total Impact $21,014,174 $12,873,342 $8,140,832 Wages & Salaries Direct Impact $5,574,284 $5,574,284 $0 Indirect Impact $4,805,019 $2,446,998 $2,358,020 Induced Impact $3,490,061 $1,521,757 $1,968,305 Total Impact $13,869,365 $9,543,040 $4,326,325 Employment (Full-year jobs) Direct Impact Indirect Impact Induced Impact Total Impact Total Taxes Federal $4,367,836 $2,964,126 $1,403,709 Provincial $3,518,940 $2,529,369 $989,572 Municipal $1,839,519 $1,494,788 $344,731 Total $9,726,295 $6,988,283 $2,738,012 Industry Output Direct & Indirect $32,607,333 $24,350,651 $8,256,682 Induced Impact $12,351,879 $5,460,948 $6,890,931 Total Impact $44,959,212 $29,811,599 $15,147,613 Page 5

13 Appendix 1: Glossary of Terms used by STEAM Initial Expenditure - This figure indicates the amount of initial expenditures or revenue used in the analysis. This heading indicates not only the total magnitude of the spending but also the region in which it was spent (thus establishing the "impact" region). Gross Domestic Product (GDP) - This figure represents the total value of production of goods and services in the economy resulting from the initial expenditure under analysis (valued at market prices). NOTE: The multiplier (A), Total/Initial, represents the total (direct, indirect and induced) impact on GDP for every dollar of direct GDP. This is a measure of the level of spin-off activity generated as a result of a particular project. For instance if this multiplier is 1.5 then this implies that for every dollar of GDP directly generated by front-line tourism businesses an additional $0.50 of GDP is generated in spin-off activity (e.g. suppliers). The multiplier (B), Total/$ Expenditure, represent the total (direct, indirect and induced) impact on GDP for every dollar of expenditure (or revenue from a business perspective). This is a measure of how effective project related expenditures translate into GDP for the province (or region). Depending upon the level of expenditures, this multiplier ultimately determines the overall level of net economic activity associated with the project. To take an example, if this multiplier is 1.0, this means that for every dollar of expenditure, one dollar of total GDP is generated. The magnitude of this multiplier is influenced by the level of withdrawals, or imports, necessary to sustain both production and final demand requirements. The less capable a region or province is at fulfilling all necessary production and final demand requirements, all things being equal, the lower the eventual economic impact will be. GDP (at factor cost) - This figure represents the total value of production of goods and services produced by industries resulting from the factors of production. The distinction to GDP (at market prices) is that GDP (at factor cost) is less by the amount of indirect taxes plus subsidies. Wages & Salaries - This figure represents the amount of wages and salaries generated by the initial expenditure. This information is broken down by the direct, indirect and induced impacts. Employment - Depending upon the selection of employment units (person-years or equivalent full-year jobs) these figures represent the employment generated by the initial expenditure. Canadian Sport Tourism Alliance STEAM User s These figures distinguish between the direct, indirect and induced impact. Equivalent Full-Year Jobs, if selected, include both part-time and full-time work in ratios consistent with the specific industries. NOTE: The multiplier (B) is analogous to Multiplier (B) described earlier with the exception being that employment values are represented per $1,000,000 of spending Page 6

14 rather than per dollar of spending. This is done to alleviate the problem of comparing very small numbers that would be generated using the traditional notion of a multiplier (i.e. employment per dollar of initial expenditure). Industry Output - These figures represent the direct & indirect and total impact (including induced impacts) on industry output generated by the initial tourism expenditure. It should be noted that the industry output measure represents the sum total of all economic activity that has taken place and consequently involve double counting on the part of the intermediate production phase. Since the Gross Domestic Product (GDP) figure includes only the net total of all economic activity (i.e. considers only the value added), the industry output measure will always exceed or at least equal the value of GDP. Taxes - These figures represent the amount of taxes contributed to municipal, provincial and federal levels of government relating to the project under analysis. This information is broken down by the direct, indirect and induced impacts. Page 7