Arts Incubator Feasibility Study - Arts Council Wood Buffalo

WOOD BUFFALO DEVELOPMENTS The Wood Buffalo region is 66,361 Km2, containing 10 regional communities: including Fort Fitzgerald, Fort Chipewyan, Fort McKay, Fort McMurray, Draper, Saprae Creek Estates, Gregoire Lake Estates, Anzac, Janvier and Conklin. Census 2018 is the first population count conducted following the 2016 wildfire. The population of Wood Buffalo has dropped from a population of 125,032 in 2015 to 111,687 in 2018, showing a drop of 10.7%. 2016 wildfire caused a significant drop in population numbers down to a low of 103,880 residents, while numbers were promising initially, but economic downturn caused by health crisis, does not promise a good bounce back to the region’s population, and may miss the projected population growth. Table 7-16: Fort McMurray Population Projection Growth Year 125032 2015 103880 2016 107516 2017 111687 2018 115174 2019 119205 2020 123377 2021 Even with the current economic and health crisis, multiple large-scale developments have been proposed for the Fort McMurray area, which ultimately creates a number of jobs and will then attract both commercial providers, residents, and tourism industry related services. A discussion on the six major upcoming developments will follow in this report. Parsons Creek is large scale community development on 815 hectares of land. The development is expected to house 24,000 residents and a Public Elementary school to accommodate the present and futures needs of the residents. In addition, Parsons Creek is easily accessible through an interchange off Highway 63. Road conditions have been designed to accommodate future demands and allow free flow traffic where the Government of Alberta has invested millions of dollars in relevant earthwork, infrastructure, and relocations of services. Stone Creek commercial is a shopping centre that was developed north of the Confederation Way. The development houses a mix of vendors including grocery stores, fitness stores, drug stores, financial institutions, medical services, and restaurants. All of which increase the quality of life for residents. The Commons entertainment and commercial mall, which is currently under development at Eagle Ridge, is also situated on the Confederate Way that lies surrounding Eagle Ridge. Eagle Ridge houses 7,000 residents over an area of 370 acres. The futures shopping centre takes up 21.42 acres which is zoned as a C3 Centre Commercial District. The development contains gas station with a convenience store, restaurants, theatre, fitness store and a pet store for the convenience of residents. Quarry Ridge contains over 36 acres of commercial development site. The site is located slightly off Highway 63 in the vicinity of the Fort McMurray International Airport. When developed, the site will contain retail shopping centres, financial institutions, recreational vehicle and auto sales and a hotel. The Fort McMurray International Airport (YMM) is located 15 minutes from downtown Fort McMurray. This provides easy access for Oil Sands contractors and Western Canada with an average of 595,300 passengers annually. The airport is a major economic driver for the region, with an economic output of over $354 million and supporting over 70 businesses on airport property and over 900 jobs. 88 Create Enhance Sustain

Finally, Prairie Creek Business Park is expected to span over 983 acres of land near Fort McMurray International Airport. Phase 1 of developments began in 2014 with the construction of roads and beginning the first lots, while Phase 2 lots are now available for purchase with possession slated for 2020. 7.5 CONCLUSION The Province of Alberta had over 36.9 million in visitors and over $8.9 billion in overnight expenditures, out of which $6.9 Billion is generated by Canadians. Albertan’s contributed $4.9 billion to Alberta’s tourism section, which will be a significant factor moving forward due to ongoing travel restrictions. Canadians and Albertans spent $79.6 million and $299.2 million in the region of Northern Alberta, respectively. Northern Alberta received 1.89 million totals in-person visits in 2017, which accounted for a total of 5 percent visits to north Alberta. Fort McMurray had a total of 596,300 air passengers over the year of 2019, which shows a drop from 2018 that can be blamed on drop in oil prices. Going forward, those numbers are expected to decrease due to the ongoing health crisis. Canadians spent over $31.2 million for recreation and entertainment in the North Alberta region, of which $4.1 million were spent by Albertans, which amounts to 1% of total expenditure in North Alberta by Albertan tourists. As per Tourism Market Monitor October 2020 report*, a promising rebound in domestic tourism is shown in highway count, national park attendance, employment, and accommodation. Sadly, with the ongoing health and economic crisis, it will take quite some time for the tourism and economy sectors to fully recover from the health crisis. *Please note that Alberta declared a state of emergency on March 17, 2020. All non-essential businesses were asked to close on March 27, 2020. Alberta’s phased relaunch began on May 14, 2020. All Parks Canada facilities were temporarily closed from March 25, 2020 and opened for day use on June 1, 2020. All provincial parks closed on March 17 and reopened on May 14, 2020. 89 Create Enhance Sustain

8.0 PRELIMINARY FEASIBILITY ASSESSMENT 8.1 AVAILABLE MARKET FOR REGIONAL MUNICIPALITY OF WOOD BUFFALO The population of the Regional Municipality of Wood Buffalo currently sits at 111,687 as per Census 2018 showing 10.67% decrease to Census 2015. Residents are comprised of urban and rural service areas and do include the shadow populous. Visitors to Alberta North represent 5% of the total Alberta visitor market. A large percentage of those that will be visiting Fort McMurray Wood Buffalo will be comprised of overnight visitors and the remainder will be same-day tourists. Considering the given factors, the projected visitor attendance for the proposed Arts Incubator will have an annual attendance rate of 21,500. Given the current economic scenario, we will assume 3% drop in population for years 2019, 2020 and 2021, while expecting 1% growth in 2020 onwards. Moreover, Alberta will see annual growth of 1.4% to its population. Table 8-1: Population Projections (Source: Alberta, Population Statistics & Regional Municipality of Wood Buffalo, Census 2018) Visitor Projection 2018 2019 2020 2021 2022 2023 2024 Residents RMWB 111,687* 108,000 105,000 102,000 103,000 104,000 105,000 Alberta Population 4,340,049 4,400,809 4,421,876* 4,483,782 4,546,555 4,610,206 4,674,749 *numbers from Alberta Government It has been assumed that visitors to the proposed Arts Incubator, who would come from Albertans own population would spend on average 2.5 nights while spending $207 per person per visit. Visitors from other Canadian provinces would spend on average 5.3 nights. Due to the longer time spent in their visit, their spending per person per visit will substantially increase to $471 per person per visit; this translates to a pending of $87 per person per night on average. It can be assumed that the residents of the region who would visit the proposed space will be day visitors. This decreases their spending levels considerably as they will not spend on accommodation related expenses. 8.2 VISITOR PROJECTION FOR THE PROPOSED ARTS INCUBATOR Preliminary estimates indicate that the projected visitors for the proposed space will be 23,500 during the opening year, and this figure will increase by 5 percent year over year. By utilizing these figures, we can extrapolate these numbers over the first six years, to have an estimated visitation of 30,100 people on the sixth year of the proposed space. The table below demonstrates the increase of visitors from 2022 to 2027 by the projected percentage increase year over year of 5 percent. A survey was conducted in October 2020 to get community feedback on the potential arts incubator project. A total of 410 individuals responded of which, approximately 84% of people reported that the region would benefit from the Arts Incubator, and over 90% of people suggested that they would either participate or volunteer at the Arts Incubator if it were universally accessible. Furthermore, approximately 85% of people reported that they would attend arts-related events, which would, in turn, bring more and more visitors year after year. Table 8-2: Visitor Projections 2021 2022** 2023 2024 2025 2026 2027 Visitor Projection 2020 Projected Visitors N/A 18,500 23,500 24,675 26,000 27,300 28,665 30,100 **This table assumes that the space opening year is 2022 Several factors that will influence the projected number of visitors for the proposed Arts Incubator Fort McMurray are population fluctuation, natural disasters, jobs availability, cost of accommodations, cost of goods and services, and exchange rate changes. 90 Create Enhance Sustain

8.3 CONCLUSION During its opening year, it has been projected that 23,500 visitors are expected to visit the proposed Arts Incubator and it has a potential market of 130,140 visitors over 5 years with an expected growth rate of 5 percent annually. This market is comprised of residents, tourists, and local surrounding communities. With the current economic demand, October 2020 survey results, expected GDP and large developments in the region, we have forecasted the Region to maintain its current growth rate and follow historical and projected visitation patterns. 91 Create Enhance Sustain

9.0 PROPOSED CONCEPT 9.1 REVIEW AND ASSESSMENT Before initializing a proposed conceptual design for the Arts Incubator, a consensus was required on whether it would be more feasible to renovate the existing Landmark Cinema Building or to build a brand-new building. The first step in comparison is finding a commercial property that can offer AWCB practicality and functionality to operate the proposed Arts incubator. The Landmark Cinema Building in downtown Fort McMurray provides ACWB ample space to provide the necessary facilities to operate an Art Incubator, as well as adding several benefits both to ACWB and the municipality, including revitalizing the downtown area and encouraging residents in the uptown Beaconhill, Thickwood and Timberlea areas to commute to the downtown area. It is the region’s best interest to not leave a building such as the Landmark Cinema Building unoccupied for a long enough period to be classified as derelict or abandoned, as this could spark higher crime rates in the area due to squatters or other nefarious individuals occupying the building illegally. For ACWB, the benefits of choosing downtown include close proximity to transit hubs, high-density residential areas, and financial benefits such as grants from the municipality, i.e. the Downtown Revitalization Incentives Program. Currently, other existing commercial buildings or properties in the region pale in comparison to the Landmark Cinema Building for its easy accessibility, mutual benefits to the community, large size, condition, and notability as once being the sole commercial cinema theatre in the region. With a location agreed upon, the next step was to determine whether to renovate the existing Landmark Cinema Building or to demolish and build a brand-new structure. Akron’s professional engineers reviewed obtained drawings and performed two visits along with ACWB staff to assess the building’s structural, mechanical, and electrical integrities. Additionally, Akron’s team took into consideration the building’s age, how long the building was unoccupied for, structural constraints in terms of remodeling, presents of potential asbestos carrying material, and other factors that would impact the cost of remodeling the existing space. Based on Akron’s review, it was determined the building was designed and constructed around 1996 and in operation until late 2018. Given asbestos has been widely unused as a construction material in Alberta since the 1980s, it can be assumed there are no asbestos-containing material present at the Landmark Cinema Building. Furthermore, the building was left unoccupied for two years, with only minor observed damages due to vandalism observed on the exterior (broken window on side exist door and graffiti on exterior walls) and no vandalism or hazardous materials observed in the building interior. Based on these observations, we believe the building will require only minor repair work to restore the building to minimum occupancy requirements. Below is an estimated cost comparison of demolishing and constructing a new building vs. remodelling the existing building. Table 9-1: Hard Construction Cost Estimate Cost Item Rebuild Remodel Building (13,527 sq. ft.) Construction Per Sq. Ft. $595/ sq. ft. $326/ sq. ft. $4.41 Million Construction Total $9.05 Million $0.66 Million $5.07 Million Consulting Fees (15% Construction) $1.21 Million $10/ sq. ft. Building Total $10.26 Million $0.29 Million $0.04 Million Parking Lots (29,315 sq. ft.) $0.33 Million $5.40 Million Construction Per Sq. Ft. $20/ sq. ft. Construction Total $0.59 Million Consulting Fees (15% Construction) $0.09 Million Parking Lot Total $0.68 Million Total Combined $10.94 Million Construction costs were based on Edmonton region listed in the Canadian Cost Guide 2020 Edition. Land purchasing excluded from construction cost. $1 Million allowance for demolition added to Rebuild cost. Based on our cost estimate breakdown, the cost for remodeling is the more cost-effective option by $5.54 Million, half the cost of rebuilding brand new. 92 Create Enhance Sustain

Before initiating our conceptual design scope, Akron’s professional engineers reviewed obtained drawings and then performed a general visual assessment of the existing building’s structural, mechanical, and electrical integrities. Based on our review and assessment, we concluded that the subject building is reliable for the proposed remodeling 9.2 DESCRIPTION Figure 9-1: Proposed Arts Incubator – Site Plan Figure 9-2: Proposed Floor Layout - First Floor 93 Create Enhance Sustain

Figure 9-3: Proposed Floor Layout - Second Floor As per the previous drawings, the first floor of the proposed Arts Incubator Space is comprised of a potential tourism booth studio spaces, unisex washrooms, pullout art racks, workstations, gallery/shop, visual arts maker space, event space, culinary arts kitchen, film/ theatre/ rehearsal space, soundproof music space, elevator, maintenance and cleaning, staff offices, and managers office. The second partial floor includes reception, projector room, staff offices, meeting room, coffee station, and roof access. Below is a short description of each of the above-listed sections: Entrance Hallway (Nos. 2 & 3) • Information/Reception Both – Proposed to be leased to Fort McMurray Tourism for their business operations, such as providing information on other local attractions, lodging and restaurants, to Fort McMurray visitors, and the reception desk. The reception will act as the first point of contact for the Arts Incubator Space visitors, to provide related information, such as ticketing, facility information, staff contact, events, and schedules. • Studio Spaces – The three spaces, located right by the main entrance, will be available for leasing by artists for the purpose of designing/creating their art. The studio spaces will have large glass windows facing the main entrance hallway, so visitors first entering the Art Incubation Space can have a firsthand experience seeing artists work on their art in real-time. Main Lobby (Nos. 4, 5, 6, 13, 14 & 17) • Unisex Washrooms – Comprised of eight unisex washrooms and two barrier-free washrooms. • Pullout Art Racks – Where canvas pieces, and/or other applicable art pieces, can be displayed on movable racks. • Workstation – A circular desk located in the middle of the main lobby, where artists can host teaching sessions to patrons. The workstation is complete with a built-in sink and drawers for storage. • Manager Office – A relatively small office space to accommodate the facility manager of the Art Incubation Space. • Elevator – The glass elevator will allow barrier-free access to the second floor of the Arts Incubation Space. • Maintenance and Cleaning Space – Comprised of a small shop, equipment, and materials storage room, and receiving area for utility meters. Studios/ Spaces (Nos.7,8,9,15,10,11,12) • Gallery/Shop – A space for artists to showcase and sell their artwork. • Visual Arts Maker Spaces – Studio space for painters, print makers, film makers, visual and performing artists that require rental space for short and long terms. These spaces will be equipped with suitable ventilation, sinks, sound proofing walls, special equipment, and locks/storage cabinets. • Event Space – This space can be rented out as an event, exhibition, or rehearsal space. Potential to have seating, green screen, and comfort station. Furthermore, this space can be rented out as an event, or exhibition, space for performing arts. 94 Create Enhance Sustain

• Staff Offices – Small office spaces for ACWB and Arts Incubation Space staff. • Culinary Arts Kitchen - Can be utilized by Multicultural association, experiential tourism opportunities (how to cook wild game, bannock etc.) local culinary artists offering classes, and culinary competitions. This space consists of several cooking stations, with a teaching station set up at the front of the room, complete with an overhead screen to broadcast the teacher’s cooking station to the entire space. Furthermore, this space is to be furnished with an industrial fridge and large pantry space for storing cooking ingredients and utensils. • Film/ Theatre/ Rehearsal Space – A space designated for screening films, complete with theater seating and a projector screen. • Soundproof Music Space – To consists of three enclosed and sound proofed booths, to be designed/built for musical rehearsal. Second Floor (Nos. 18,19,20,21,22,23,24) • Reception – To be designated as a reception for the second-floor offices. • Projector Room – To operate the film projector for the Film Theatre on the first floor. • Rest Area – Lounge area for the office space users. • Staff Offices – Five office spaces designated for ACWB staff, or for lease by other parties. • Meeting Room – A space designated for AWCB’s meetings or conferences, or to be offered for short-term rentals. • Roof Access – Existing roof access space that contains a separate exterior door as an emergency exits. In addition to the interior sections listed above, the Arts Incubation Space will have their own two large asphalt parking lots, with the building exterior being renovated to modernize and give the building a unique appearance. One of the two (2) parking areas, with an approximate area of 14,400 Sq. Ft., might be designated as an urban market, food trucks, festival space, paid parking, or any other related uses. Figure 9-4: Proposed Exterior Example 95 Create Enhance Sustain

9.3 FLOOR SPACE REQUIREMENTS Table 9-2: Floor Space Usage Sq. Ft. Component 152 Ft2 First Floor 261 Ft2 Tourism Booth 406 Ft2 Studio Spaces 40 Ft2 Unisex Washrooms 144 Ft2 Pullout Art Racks 64 Ft2 Workstation 40 Ft2 Manager Office 1,832 Ft2 Elevator 1,832 Ft2 Gallery/Shop 1,215 Ft2 Visual Arts Maker Spaces 552 Ft2 Event Space 1,440 Ft2 Staff Offices 1,440 Ft2 Culinary Arts Kitchen 1,215 Ft2 Film/ Theater/ Rehearsal Space Soundproof Music Space 84 Ft2 Second Floor 42 Ft2 Reception 168 Ft2 Project Room 816 Ft2 Rest Area 324 Ft2 Staff Offices 30 Ft2 Meeting Room 10,633 Ft2 Roof Access 1,464 Ft2 First Floor Total 12,097 Ft2 Second Floor Total Total Space The above chart presents approximate space areas based on the proposed/conceptual layout drawing. 9.4 ANTICIPATED CONSTRUCTION COST The anticipated design and construction cost of the proposed project for turnkey is $10.6 Million. The breakdown of this total cost is based on: Table 9-3: Full Cost Estimate Breakdown Cost Cost Item $4.4 Million Estimated Construction Cost ($326 per Sq. Ft.) $0.7 Million Consulting Costs $0.3 Million Exterior Improvements and Site Servicing $4.2 Million Land Purchasing Costs $1.0 Million 10% Contingency Costs $10.6 Million Total 96 Create Enhance Sustain

9.5 CONCLUSION At the initial phase of our scope, Akron’s professional engineers performed a general visual assessment of the existing building’s structural, mechanical, and electrical integrities and found them to be reliable for the proposed remodeling. Hence, the proposed Arts Incubation Space will be composed of art studios, spaces to provide other arts and non-arts- related services, programs, festivals, events, and rental spaces, that will generate revenue and provide relevant benefits to the community, as per the following list of the proposed components: • Tourism Booth • Studio Spaces • Unisex Washrooms • Pullout Art Racks • Workstation • Manager Office • Elevator • Gallery/Shop • Visual Arts Maker Spaces • Event Space • Staff Offices • Culinary Arts Kitchen • Film/ Theatre/ Rehearsal Space • Soundproof Music Space • Reception • Projector Room • Rest Area • Staff Offices • Meeting Room • Roof Access Based on the condition of the existing Landmark cinema building, we believe the cost of remodeling the building is the more feasible option in comparison to demolishing and constructing a brand-new building. It can be expected the cost of remodeling ($5.4 Million) will be approximately half the cost compared to re building ($10.9 Million). The proposed Arts Incubator will be robust to withstand the northern winter climate of the Wood Buffalo Region. Additionally, the proposed building’s exterior will be designed with the goal of giving the building a unique and eye-catching appearance. In addition to the above-mentioned components, many energy-saving and sustainable features will be applied to the Arts Incubator building to increase its lifespan while reducing its carbon footprint, thus reducing its short and long-term impacts on the environment. 97 Create Enhance Sustain

10.0 MANAGEMENT From meetings and interviews of ACWB staff, it is understood that seven existing staff roles for ACWB will be employed at the new Arts Incubation Space for various roles, including management, retail, and reception. The RASL North and South live and work in the rural communities they serve and will not require office space in the Arts Incubator. Three additional staffing positions will be created to support maintenance and technical services. A final mention should be made for tenants who will rent out designated maker spaces within the Arts Incubation Space for the purpose of creating and selling their art both within the facility and through other avenues. Additionally, there will also be workshops and learning seminars taught by non-staff members of the Arts Incubation Space. Such workshops and seminars include the Teaching Kitchen, with its own designated area within the Arts Incubation Space. 10.1 STAFFING The staffing plan below expects seventeen part-time and full-time positions to be filled at the Arts Incubator Space. The positions will be filled by existing ACWB staff members, where possible. Several positions that will not be filled by ACWB staff will be contracted by third party companies. • ACWB Core: o Executive Director o Partnerships Manager o RASL North (Fort Chipewyan) o RASL South (Janvier/Conklin) o Programs Manager o Programs Coordinator o Communications Manager o Engagement Coordinator o Marketing Coordinator • Arts Incubator Core: o Facility Manager o Administrative Coordinator o Light & Sound Technician • Contractors (Third Party): o Cleaning o I.T. o Accountant o Bookkeeper o HR / Payroll 10.2 TENANTS In addition to ACWB’s staff, several third-party companies are slated to rent/lease out areas of the Arts Incubation Space for office use. Lease payments will be directly collected by ACWB and can be considered as a revenue stream for ACWB. 10.3 BOARD & STAFF There are currently eleven members who sit on the Board of Directors for ACWB. Each board member is specialized in an artistic or business-related field, with backgrounds in arts, business development, social profit organizations, and indigenous relations. In addition to the Board of Directors, ACWB has seven full time and two part-time staff members filling in for various roles in the ACWB, including project and program management, communications and engagement, and rural art support liaisons. 98 Create Enhance Sustain

10.4 TRAINING It is recommended that employee training include orientation, on-the-job and quality management training. Orientation will provide: an overview of the Space’s vision, mission, core values, strategic goals and objectives. In addition, the suggested training session will describe employee roles, responsibilities, expectations in meeting customer requirements and general operating policies and procedures. On-the-job training will provide occupational skills training for employees across the various roles within the Centre. It is recommended that an individual training plan be developed for each employee. The training plan should identify the knowledge, skills and abilities required to competently assume the position. Quality management training will share the National Quality Institute’s 10-Point Criteria for Small Organizations Best Practices and describe the commitment of the Incubator to the Criteria. 10.5 GENERAL OPERATIONS The proposed Arts Incubation Space will be the first of its kind in the Wood Buffalo Region, acting as a spoke and hub model to centralize the Arts in the region. To ensure successful operations of the Arts Incubator Space, management must be professional and knowledgeable, preferably with a background in the arts sector. 10.6 MARKETING The region has faced mounting challenges over the past decade, including oil price drops, the 2016 wildfire, COVID 19 pandemic, and the 2020 spring flooding. Much of the community faces challenges with layoffs, property damage, and a level of financial uncertainty. It is recommended marketing for the Arts Incubation Space be focused on the local community due to travel restrictions in place during the pandemic and focus on bringing unity to the community through arts and culture. The proposed Arts Incubator Space can undertake in the following marketing activities: • Develop partnerships with the media -familiarization visits, media mailings, press releases, joint media events with tourism association, cd and website with interior and exterior images of the Centre. • Create awareness with key markets – newsletter to keep current on the Centre’s progress, informational flat sheets, and cultivate local partnership to co-promote the Centre. • Purchase print advertising for all the market. • Cultivate relationships with regional, provincial and national tour operators. • Develop a comprehensive website. • Take professional photographs for promotions. • Develop a trade show display and participate in local trade shows. • Become a member of industry associations – Fort McMurray Tourism, Alberta Museum Association Tourism and Industry Association of Canada. • Develop a meeting planner kit to include space and capacity of meeting rooms, conference rooms and theatre, audiovisual equipment, parking details, public spaces and facilities, catering menu, etc. To assist with marketing, considerable mechanisms and organizations with provincial and federal marketing supporting programs are available in Alberta and Canada to promote and sell tourism products such as: • Fort McMurray Tourism. • Alberta North Tourist Destination Region. • Travel Alberta In-Province. • Travel Alberta. • Canadian Tourism Commission. 99 Create Enhance Sustain

10.7 FUNDING To assist with building and operating the Art Incubator Space, it can access a variety of programs that provide funding for such projects. Sources of potential funding include: • Federal o Infrastructure Canada - Building Canada program – Communities Component - www.buildingcanada- chantierscanada.gc.ca. o Parks Canada. o Western Economic Diversification Canada. o Economic Development Agency of Canada. o Museum Assistance Program, Canadian Heritage. o Canadian Arts and Heritage Sustainable Program, Canadian Heritage. o Canada Foundation for Innovation (for research-related cultural projects of Canadian post- secondary education institutions). • Potential municipal sources of support for cultural infrastructure o Government service partnerships. o Development fees. o Strategic budget allocations. o Special taxes. o Special levies. o Utility models (user fees). o Sponsorships. o Land transfers. o Funding partnerships (e.g., P3s). o Zoning incentives and programs. o Development policies. o Endowment incentives. o Wood Buffalo Economic Development o Downtown Revitalization Incentives Program • Tenant Revenue Streams o Individual tenants (Artist work/showcase spaces) o Office space leasing o Parking contracts 10.8 PRE-OPENING COST Anticipated pre-opening costs include, but are not limited to, the following: • Furniture, Fixtures and Equipment – 15 percent of construction cost or $2,000,000 • Planning – business planning, marketing strategy, lease negotiations, fundraising, communications, cost of building operation between takeover from construction to exhibit installation to opening - $450,000. • Management Salaries – 9 months of Salary for the Executive Director, Director of Marketing - $300,000. • Opening Event – a local event celebrating the grand opening - $50,000. • Contingency – 10% Contingency to cover unexpected costs. • As with the estimated cost of construction, the pre-opening cost will likely undergo extensive refinement through the detailed conceptual design phase and subject to sufficient financial resources to construct and operate the facility. 100 Create Enhance Sustain

10.9 CONCLUSION The staffing plan anticipates have twelve full-time equivalent positions: • Executive Director • Partnerships Manager o RASL North (Fort Chipewyan) o RASL South (Janvier/Conklin) • Programs Manager o Programs Coordinator • Communications Manager o Engagement Coordinator o Marketing Coordinator • Facility Manager o Administrative Coordinator o Light & Sound Technician In addition, five positions will be contracted by third party companies: • Cleaning • I.T. • Accountant • Bookkeeper • HR / Payroll The ACWB Board of Directors and core staff members will provide direction with regards to the Arts Incubation Space with relation to funding, pre-construction, opening, and operation activities. These board members and staff shall carry broad business experience with backgrounds in marketing, tourism, and knowledge in the arts. Employee training is to include a combination of orientation, on-the-job and quality management training. Overall, the Arts Incubation Space is to be perceived as a first-class attraction by the reputation of its qualified management team, high quality of service, state of the art amenities and rich programs. Management, in particular, will be the key to the success of the Arts Incubation Space and the financial projections have been prepared on the basis of these management qualification requirements. Due to mounting challenges in the region, including lower oil prices, the 2016 wildfire, the COVID-19 pandemic, travel restrictions and the 2020 spring flooding, it is recommended the Art Incubation Space undertake marketing activities focused on attracting and serving local populations. Funding activities necessary to building, pre-opening, opening, and operating the proposed Arts Incubation Space are crucial to bringing the facility to light. Considering the estimated cost of pre-opening activities, construction, consulting, site servicing and outdoor improvements, funding requirements are likely around $14.7 Million. Sources of such funds are expected to be government funding, corporate donations, and revenue streams from tenant rentals: Table 10-1: Funding Requirements AMOUNT FUNDING REQUIREMENT PRE-OPENING COSTS $4.1 MILLION CONSTRUCTION COSTS $10.6 MILLION TOTAL $14.7 MILLION 101 Create Enhance Sustain

11.0 PROJECTED STATEMENT OF INCOME AND EXPENSE Based on our estimate of visitation and various rates (admission, meeting room rental, conferences space rental, lease), we have prepared an estimate of revenue and expense for the Space for its first five years of operation. The opening date is assumed to be January 1, 2022 with a December 31st year-end for each year thereafter. This projection is based on an analysis of comparable operations throughout Canada and our knowledge of the attractions industry. This research was completed in November 2020 and is valid as of at that date. As is the case in all estimates of this type of development, we do not guarantee the results, nor do we warrant they will be 100 percent achieved. The estimates of revenues and expenses are based on the size, location, and quality of the proposed development as described in previous sectors of this report. Wherever possible, we have utilized the operating ratios of selected similar size and type facilities, and then adjusted those ratios in our best judgment to reflect the circumstances outlined in our study of the market considering the subject/proposed facility. 11.1 DETAIL INFORMATION ON REVENUE AND EXPENSES The assumptions used for calculating the pro-forma are discussed below: Revenue The proposed Arts Incubator will generate revenue from the following sources: • Membership Fees • Fees for Service / Sales Event • Meeting room • Gallery Shop • Event Space • Culinary Arts Kitchen • Film Theatre • Soundproof Music Space • 3 X Studio Spaces • 6 X Visual Arts Maker Spaces • 1 X Information / Welcome Booth • 5 X Office space • Parking • Programs • Events • Festivals • Grants & Endowments • Sponsorship & Donations Each of these areas is considered in the sections following. Admissions Admissions are based on the visitor’s projection. It is appropriate to generalize the spending estimates at this stage of development of the subject space. It is assumed that after accounting for discounts, special promotions, seasonality, and other factors, the blended average rate for admission achieved by the Space is $14 in 2020. It is assumed that admission is applicable for the proposed film/ theatre/ rehearsal space, which will be available for previews for film festivals or special events, such event will not be ongoing year around, but we assume, it will bring in 25% of the total visitors to the theatre in a year. Additionally, there are a number of events that could incur admission costs, including team building events, special events, performance, and showcase events. 102 Create Enhance Sustain

Table 11-1: Expected Visitors for Theatre Admissions 2022 2023 2024 2025 2026 24,657 26,000 27,300 30,100 Visitors 23,500 6,165 6,500 6,825 7,525 $86,310 $91,000 $95,550 $105,350 Expected Visitors 5,875 Fees $82,250 Lease Agreements Lease agreements will be signed for several the spaces in the facility. Some estimates of commercial lease rates for Fort McMurray is $30 per sq.ft.. The leases in this facility have been discounted from these commercial rates in view of the type of tenant the facility will attract and the fact that some of the operations are considered services more than commercial endeavours. Table 11-2: Expected Revenue / Rent / Lease Component Sq. Ft. Annual Estimate Rates 2021 2022 2023 2024 2025 2026 First Floor 152 ft2 $0 $54,720 $54,720 $54,720 $58,550 $62,650 Tourism Booth 261 ft2 $0 $206,250 $206,250 $206,250 $220,688 $236,136 Studio & Visual Arts 40 ft2 $0 $500 $500 $500 $535 $575 Pullout Art Racks 144 ft2 $0 $100,000 $100,000 $100,000 $107,000 $114,490 Workstation 1,832 ft2 $0 $26,000 $26,000 $26,000 $27,820 $29,767 Gallery/Shop 1,215 ft2 $0 $10,800 $10,800 $10,800 $11,556 $12,365 Event Space 1,440 ft2 $0 $26,000 $26,000 $26,000 $27,820 $29,767 Culinary Arts Kitchen 1,440 ft2 $0 $36,400 $36,400 $36,400 $38,948 $41,674 Film Theatre 1,215 ft2 $0 $10,000 $10,000 $10,000 $10,000 $10,000 Soundproof Music Second Floor 816 ft2 $0 $293,760 $293,760 $293,760 $314,323 $336,326 Staff Offices 324 ft2 $0 $40,000 $40,000 $40,000 $40,000 $40,000 Meeting Room N/A $6,000 $6,000 $6,000 $6,420 $6,869 $7,350 Membership N/A $653,000 N/A N/A N/A N/A N/A Municipal Grants N/A $15,000,000 N/A N/A N/A N/A N/A Capital Fund Raise Program N/A $500,000 $200,000 $300,000 $350,000 $375,000 $400,000 Social Fund Raise Program $16,159,000 $1,020,430 $1,120,430 $1,170,850 $1,249,109 $1,331,100 Total Revenue Meeting Room Rental There is a demand for the rental of space to host community events, outside functions, and internal programs at the Space. The estimate assumes 200 meeting events at $200 bringing revenue for meeting at $40,000 per year. Event Space There is a demand for the conference space to host community events, outside functions, and internal programs at the Space. The estimate assumes 24 events in the first year at $450, assuming sustaining these numbers for the first 3 years and having growth of 7% per year thereafter. Events and Festivals In the first five years of operation, it is assumed the organization will be establishing itself, operating a new facility, and focus on attracting and servicing the tenants. 103 Create Enhance Sustain

However, we do assume that significant events will be mounted by the Arts Incubator such as film festivals, multicultural festivals, food events, etc., and these events will attract visitors, income, and publicity for the Arts Incubator. We have assumed that revenues are plugged back into the next year’s events and festivals and that any cash flow issues are covered by sponsorship. Capital / Social Fund Raise Programs Capital social fund raise program will be run to gather funds to purchase Landmark Cinemas building and remodel it according to arts incubator needs. This funds of $15,000,000 includes the purchase of said property, engineering design and construction as per the proposed plan in this report. Social fund raise program will ensure that Arts Incubator will be a social enterprise. It is difficult to imagine the scale of programs, the total cost of running them, or the net revenue at this stage of development. It has therefore been assumed that each program will be mounted on its own budget. We have assumed that in each year including 2021, the programs delivered by the Arts Incubator make a little bit of net income for the Space. This net income is plugged into program development for the following year. Grants An important source of revenue to support the on-going operation and maintenance of the space will be the income from an endowment and/or annual operating grants. The income from an endowment provides a sustained source of revenue while operating grants are subject to changing government priorities and programs. Sponsorship Another important source of revenue for the Arts Incubator is sponsorship. Major employers in the region will be a primary source of funds and the appreciation for the arts and culture in helping to develop the region will positively influence contributions. Expenses Staffing / Salaries and Benefits Personnel costs are a significant portion of total costs to operate the Space. We have estimated costs for the limited staffing needed to operate the Space. Should additional staff be required to operate large events, run larger programs than those assumed in the program section, or to manage grants, endowments, and sponsorships, it has been assumed those resources will be considered as a cost of the respective programs or operations to which they apply. Table 11-3: Expected Expenses 2021 2022 2023 2024 2025 2026 Description $625,430 $715,430 $785,430 $824,702 $865,937 $909,233 $15,000,000 N/A N/A N/A N/A N/A Staffing / Salaries and Benefits $20,000 $30,000 $31,500 $33,075 $34,729 $36,465 Building Construction N/A $181,455 $181,455 $181,455 $194,157 $207,748 Marketing Expense / Advertising N/A $15,000 $15,600 $16,224 $16,873 $17,548 $484,770 $30,313 $37,173 $39,633 Operations and Maintenance $16,132,221 $972,198 $33,313 $34,826 $1,150,893 $1,212,653 Insurance $1,049,321 $1,092,305 Contingency Total Expense Operations and Maintenance Costs have been estimated for the operation and maintenance of the Space and grounds. Such costs include day- to-day requirements such as heating, electricity, and water, seasonal requirements such as landscape maintenance and snow removal, security, and long-term building maintenance. These costs, based on the experience of similar Spaces, are set at $15 per square foot in the initial year of operation. 104 Create Enhance Sustain

Insurance The insurance cost of similar Spaces, rendered on a square footage basis, has been used to develop the insurance estimate for this facility. Building and built exhibit insurance is assumed to start at $15,000 per year and increase at a rate of 4 percent per year. Contingency The contingency reserve has been calculated as 3 percent of revenues. Net Income It has been assumed that this facility will be fully capitalized at its opening, including construction and pre-opening costs. This will be accomplished through the various granting agencies, sponsors, and endowment sponsors. It is therefore assumed that it will carry no debt right from its initial period of operations. Risk Assumptions and Risk Management The largest risk to the concept at present is the risk of not finding the capital necessary to begin the process of building the dream which is clearly a risk to this assumption. Operating risks include many possible issues, from economic downturn to cost escalation beyond our estimates. The estimates are, we believe, conservative. They have been set in a conservative manner to mitigate the many risks associated with such a facility. We trust this approach will make it easier to realize the dream of this attraction. 11.2 CONCLUSION Based on our estimate of visitation and various rates (admission, meeting room rental, conference Space rental and leases), we have prepared as estimate of revenue, expense, and net income for the arts incubator for its first five years of operation. The opening date is assumed to be January 1, 2022 with a December 31st year-end for each year thereafter. Table 11-4: Estimated Revenue, Expenses and Net Income 2021 2022 2023 2024 2025 2026 $1,170,850 $1,249,109 $1,331,100 Revenue $16,159,000 $1,020,430 $1,120,430 $1,092,305 $1,150,893 $1,212,653 $78,545 $98,216 $118,447 Expense $16,132,221 $16,724,220 $1,049,321 Net Income $26,779 $46,210 $71,109 It is assumed that this facility will be fully capitalized at its opening, including construction and pre-opening costs. This will be accomplished through government funding and corporate sponsorships. Therefore, it is assumed that it will carry no debt right from its initial period of operations. The figures in pro forma do not account for the capitalization of the startup period, which can represent a significant cost for the two or three years in advance of opening. It has been assumed these costs are wholly included in the capital cost of the facility. The Arts Incubator will not strictly be a commercial attraction, rather it will be a community space, a gathering place, a place of presentation for arts culture, a commercial Space and finally a tourism and visitor Space. As assumed in this report, with or without municipal grants support, Arts incubator will be social enterprise to generate net income that will fund social causes within the Arts incubator. The largest risk to the concept at present is the risk of not finding the capital funds necessary to begin the process of building the dream. The financial concept assumes fundraising of the full cost of the facility. 105 Create Enhance Sustain

12.0 COMMUNITY SURVEY ANALYSIS A survey was conducted in October 2020 to get community feedback on the potential arts incubator project. A total of 410 individuals responded, of which 96.1% lived in Fort Murray, there were 7 responses from Saprae Creek, 2 from Fort McKay, 2 from Anzac, 1 from Fort Chipewyan, and 4 from outside the Wood Buffalo Region. 10% of the responses self-identified as Indigenous, 7.4% self-identified as Immigrant, 2% self-identified as a newcomer to Wood Buffalo within the last year. 87.5% of the responses were adults aged between 25-64 years of age, 6.6% of the responses were youth aged between 18-24 years of age, 4.6% of the responses were seniors or elder aged 65+ years of age, and 1.3% of the responses were children aged 17 years of age and younger. 67.7% of the responses were female, 29.8% were male, 1.5% were non-binary, and 1% preferred not to say. The following graphs and illustrations are the results of this survey: 106 Create Enhance Sustain

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One of the questions we asked during the Arts Incubator Engagement Survey was… “Do you think an arts incubator would be beneficial for the Wood Buffalo Region?” The words you see below were the ones commonly used by multiple individuals: oinnterastcotp shop focus innovation expansion stimulate creativity encouragement opportunities space youth celebrate skills connection talent amazingcollaboration culture thrive nurturingre-ignite mentornetworking useful benefit affordable benefit art showcaseattract foster hub venue coach studio career growth enjoyable wonderful enjoy training vibrant vibrant important learning communityheal local events potential resurgence diversify strengthen business change performance well-being promote sustainable support s all ages share absolutely stronger meet communication work expandnew ideas interact innovation participating synergy renaissance flourish transform purpose revive enriches excellent edresource economy healthy indigenous people contribution exhibition customers iganthesr piration create essential accessible visit value valuable asset 108 Create Enhance Sustain

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13.0 SUMMARY OF FINDINGS AND CONCLUSIONS The Landmark Cinema site is well suited for an arts incubator as it lies in downtown Fort McMurray, in an accessible location for those travelling by car and has excellent bus routes servicing downtown from any location in the community, while the current land usage designation for this area allows for the proposed use. The Cinema Building can be efficiently remodeled to fit the needs of ACWB to house an arts incubator space that can be used as a centre for artists to gather and work, a venue for performances, workshops and galleries, a community gathering space and to host special events. It has been proven in other communities in Canada, and around the globe, that art spaces create huge benefits to the residents economically, socially, and ensuring sustainable growth. Our October 2020 engagement survey revealed the excitement of the community to have an arts incubator space developed in the region. The proposed arts incubator space complements the RMWB’s current strategic goals and priorities for economic development and downtown revitalization, while enhancing artistic and cultural outlets by providing more local options for education and entertainment that residents are wanting. Our recent engagement survey revealed the excitement of the community to have an arts incubator space developed in the region. The geographies of the seven case studies presented in this report were chosen because of their relevant similarities to the RMWB, as they faced challenges of a downward spiral in the economy, employment uncertainty, a one industry community, poor determinants of health, apathy and negativity. They discovered that there will always be factors outside of their control affecting their community, and the one thing that does not rely on natural resources, major infrastructure investment or political will is creativity. Creative minds can turn any challenge into an opportunity and change any negative into a positive. Communities that have embraced art incubators have achieved impressive transformations by their emerging creative forces due to a growing arts and culture sector. These communities are driving new business, spurring innovation, attracting talent and investment and, in the process, accelerating community development and improving the overall quality of life for their residents. Based on the many positive responses to the engagement survey, it is evident that many of our community residents appreciate the need for an arts incubator space and want to participate in it. Having this project come to fruition will be a red-letter day, as it there will be a time when forces come together to create something not only creatively impressive, but economically vibrant and self-sustaining. Below are a few comments from individuals who responded to the survey, “We need initiatives like this. Fort Mac definitely needs encouragement in the arts sector and the incubator would be hugely beneficial to both artists and the community at large. My hometown has had incredible success with projects like this (CoBALT or The Cotton Factory in Hamilton). Hamilton has seen a huge resurgence in the arts because the community invested in it. It used to be a steel town. Now it's an arts town. We could do the same. I believe this could be a huge re-brand opportunity for the region.” “Having a space to practice crafts and collaborate on arts would allow for increased innovation of arts in the community. As well it would allow for both artists and non-artists to learn from each other. One of the biggest challenges in the RMWB is finding the people who are doing interesting things to collaborate with or get involved in. Having a well known central space to come together would help facilitate those connections and give people an opportunity to learn or try something new.” “I think it would contribute greatly to the cultural life of Fort McMurray. I think having a designated space for visual and performing arts would also strengthen the arts community, generate interest and also present developmental and economic growth opportunities for existing and emerging artists. It will add to the rich mosaic of Fort McMurray .” “So many opportunities to do things together. Art is intangible, easy gets overlooked- yet needed these days like never before for people's mental health and well-being. Even the fact of having a designated space is already a huge burden lifted.” 113 Create Enhance Sustain

“We need a great place to met and work with other artists in town. It sucks to see all of our great artist leave to different communities.” “Especially with all the hard times we've been experiencing in our community (esp. the fire, flood and pandemic), people are feeling isolated and disconnected. An arts incubator will not only support people who are trying to establish an income as an artist, but will support the wellbeing of the entire region. Some people are quick to think that when times are tough, art is disposable but in fact the opposite is true. Art, creative expression and community building initiatives are critical to helping communities heal and thrive.” “I think this incubator will be the key that unlocks the true potential of Art in our region. We currently do not have a “home” for artistic endeavours here. There are a few places, but they are scattered and tend to only have focus on one or two veins. “ “I think a multi-purpose art centre would be wonderful. A place to enjoy art galleries, workshops, support the sale of local art and the Opportunity to use the space for shows and performances for our dance and theatre community.” “Everyone needs a place to do their thing. Swimmers have public pools, hockey players have multiple expensive publicly funded arenas, tennis players have community courts, runners have municipally supported trail systems, etc. Artists are most often left on their own, and survive only through tenacity and by applying their inherent creativity to the problem of where they can practice their art. This needs to change.” “Arts are important for a community and while I'm not active in the arts community, it would be nice to see a more active vibrant arts community in the region, and might tempt me into being a more active participant.” “An arts incubator would create an opportunity for arts education, tourism, and increased regional competitiveness. It could tie into the urban fabric of downtown and create a destination for events and activities. It could make the region more attractive for investment and for artists looking for studio space.” “Arts and culture make up the fabric and richness of a community. Exposing kids, pre-teens, adults, and seniors to art has immense benefit throughout the different stages of life and is often under recognized or valued. Our region needs a central location where expression of art is the norm and the go to place. Somewhere that is both physical and financially accessible. Somewhere where all people feel welcome vs intimidated. Deep down we are all artists. We are human and its is our nature to be expressive.” “I have lived here almost 10 years, and have been looking for an arts hub. Somewhere to take some courses, gather with fellow artists. Art is an important part of a healthy community, and Fort McMurray has always been lacking in the arts. True, throughout the years there have been great art initiatives, but ever since the downturn, the fire and flood, a lot of those initiatives no longer exist. Now more than ever it is needed. As much as it would be wonderful to spend time with like minded people, it can also help to heal through these difficult times.” “Since I moved here 3 years ago I’ve always thought there was something missing in the arts community here in the form of a local gathering place. Especially one that gives room for those under the legal drinking age. There’s lots of bars for adult musicians to perform. But having worked with young teenage artists there was almost nowhere for them to “show off” and share their work. I think an arts incubator would be an amazing addition to the community. Where there is art there is life.” “Good use of an empty downtown business building. Provide a valuable space for artists to work and collaborate. Makes the community stronger by encouraging the arts and artists that create it. Art encourages conversation and be a draw for people to invest in the community and make it home.” “Growing up in Fort McMurray, there was always a wonderful arts scene, but didn't seem to be a lot of purposeful spaces to create. This building would allow for artists to flourish and tell the community that the arts matter.” 114 Create Enhance Sustain

Prepared By: Reviewed By: Approved By: Kyle Hunter Dennis Heinzlmeir Nayef Mahgoub 109 Create Enhance Sustain