Expansion of the Werklund Centre (formerly Arts Commons) and Olympic Plaza’s transformation is well underway, however, the modernization project awaits full funding before moving ahead.

Councillors and public members of the Arts Commons Advisory Committee members also heard at the Jan. 28 meeting that there are cost pressures with the ongoing work on the $660 million transformation.

The Olympic Plaza block has been cordoned off for months as construction continues on the Osten and Victor Playhouse, a new, 1,000-seat theatre, along with a smaller, 200-seat theatre. Work will then happen on the revamped plaza area.

Kelly Coles, VP of building and infrastructure with the Calgary Municipal Land Corporation, who is in charge of the project management, took the committee through the current progress. Ideally, they’d like to see all three phases – the expansion, the Olympic Plaza, and the modernization – complete at around the same time, Coles said.

“As I mentioned, the expansion is well underway now. In terms of construction, the Olympic Plaza transformation, we have completed design, and we are heading into full construction in the spring,” she said.

“It’s really important, if you walk by that site now, you will see that there’s one big site fence around there, and so it’s really important for our collective success that we take that fence down and have both of these portions of the campus completed, and then the modernization.”

What’s holding the modernization project back is that it’s the one part that isn’t yet fully funded. There’s still roughly $170 million, with $103 million from the federal government, $63 million from the City of Calgary, with the remainder coming from private funders. The expansion and Olympic Plaza are fully funded.

“We know that the modernization will be following the completion, but we will try and tighten up that as soon as we have line of sight to that schedule,” Coles said.

Modernization in the mix

The modernization, which is described as a major renovation of the current Werklund Centre buildings along 8 Avenue in the downtown, will include better accessibility, upgraded amenities and improved technology.

The City of Calgary administration document on the Werklund Centre item did indicate that market conditions were a significant risk for the project. It said that escalation pressures are currently being managed.

“Material risk related to the modernization phase of work, which is only partially funded, is an upcoming concern the project team is working on. Modernization is expected to rely on federal funding, philanthropic contributions, and additional City investment,” read the cover report.

“If these sources do not fully materialize, the project may face delays, scope reduction, or increased long term costs.”

 That project has a rough timeline of 30 to 36 months for completion, so time is of the essence to limit construction fatigue in the area, according to Coles.

Alex Sarian, president and CEO of the Werklund Centre, said that there are dangers in not following through on the original vision for the whole project, including the full modernization.

First off, he said there’s deferred maintenance at the site that has to be addressed quickly. Calgary is working through issues on other infrastructure related to asset and risk management over time.

“If we as a city, and if we as an organization, we as an oversight committee, decide that modernization is not important for the vision of this campus, then we will have to have a conversation with the Werklund family, and we will have to have a conversation with all these other private donors, as well as the province who has invested on the premise of a larger vision that we are somehow having to modify it,” he said.

“There are needs that have to be met through modernization, and so we are we are designing for what our aspirations are. We are fundraising for what our aspirations are. Over the course of the next year, should those not align, we will have to sit down and have a conversation as an oversight committee.”

Cost concerns and contingency funds

CMLC president and CEO Kate Thompson acknowledged that the projects are seeing some cost pressures.  She said, however, that all of the projects undertaken by Calgary’s wholly owned development subsidiary have contingency funds set into two buckets.

They have an “unknowns” contingency fund, for things they don’t know about, but inevitably happen in any project. There’s also the escalation fund, which handles cost increases due to inflation resulting from labour, materials and other related costs.

The typology of the building also influences the potential cost, Thompson said.

“This typology, this type of building, a theater, is not a warehouse. This is a very specific building that has requirements of it,” she said.

“They need to be assets for Calgarians for decades, and we’re conscious of that to make sure that we’re delivering quality projects, and to do that in this specialized building, we do need to make sure we have the right trades so it doesn’t just happen on the day you tender or the day you start construction.”

Escalation is being driven by several major projects in the Calgary area, many overseen by the CMLC. They provided an update on their projects – including the Werklund Centre transformation – earlier this week. That’s created an increasingly tight market for labour.

The Calgary Construction Association issued a release on Wednesday, highlighting the workforce challenge to keep up with construction. They cited Statistics Canada’s latest labour force data showing 5,300 Calgary job vacancies in the trades

“Calgary is in a true city-building moment, and that’s something to be proud of – and optimistic about,” said Bill Black, President and CEO of the Calgary Construction Association.

“But delivering the housing, schools, healthcare facilities, and infrastructure our communities need will require more skilled workers. When nearly one in four job vacancies are in trades and related occupations, it’s a clear signal that we need to keep investing in workforce development, training, and pathways into the skilled trades.”

Federal funding for the modernization may be finalized this spring. The discussion for modernization funding from the City of Calgary isn’t expected until November of this year when city council debates the 2027 to 2030 budget.  The Government of Alberta has already committed $103 million to the modernization project.

Sarian said the sooner the better, however, as they have contracts with resident companies that require significant notice of interruption.

“If we could know sooner, that would be great. It would help because, I mean, as we said, the sooner we know, the sooner we can trigger those conversations with the resident companies, “ he said.

“And as of right now, that November, December, date is the last anchor for us.”