Toronto Therme Spa/West Island at Ontario Place | 45.15m | 9s | Therme Group | Diamond Schmitt

Northern Light said:
@UtakataNoAnnex will doubtless contribute her own thoughtful answer, but I'll throw my two cents in here.

The sheer size of the facility, up against the price point seems problematic.

You're looking at $40+ per person. For a family of four somewhere north of $120 (I'm assuming some discount); but that's not including parking or transit to the site, nor any food/concession, nor any extra (massage, programming etc.)

That's not a cheap day out. Certainly there are lots of people doing Spas around town at more than that, but they tend to be comparatively smaller facilities, and often targeting the indulgent girls night out, or romantic couple day out/weekend (for those with accommodation). Here they will require families and lots of repeat traffic throughout the year to make the numbers work.

For perspective, they're talking about a draw of 5,000,000 annually, which compares to Canada's Wonderland at ~4,000,000 annually. I think for most families, the latter is probably a more interesting day out, and likely the same or lower cost.

Now, Therme would obviously operate year round, where CW has about 1/2 a year of downtime.

Even then, you're talking average daily attendance of 14,000

I would call that ambitious, particularly in a post-novelty phase.

I think they would actually do better in outer suburbia, beside a highway or such, on the premise they could be cheaper and up their return trip/family rate on that basis.

On straight construction costs (if they hit their estimate); with their ideal attendance, the province subsidizing servicing and construction of parking, My math put them at $10 admission to break even over 7 years.
That sounds good until you realize that's with no overhead, no insurance, no marketing, no operations etc, and no lease cost to the province for the land, either.

We could have a fun time pegging a fair lease number, but I struggle to come to a place where they can break even at $40 per ticket, based on their own numbers.

Of course, we don't know the land-lease terms; I don't have Therme's pro-formas, so there's a bit of guessing at work; but I would simply say I find their business case optimistic at first blush; and wonder, as others do, what the plan is should it fail.
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I'm not sure I see the issue. Other than bringing electrical and water services to the island (which is admittedly a significant expense), the remainder of the funding is coming from private sources. This is also a lease, not a sale. If the business goes tits up, the land will remain publicly owned, with the benefit of a massive building and significantly improved outdoor spaces.

Also, Theme already operates four very similar spas and has two under construction. It seems they know how to make a profit off this business model, or at least there is no reason to believe their business case is incorrect.

On a personal level, I've been to several Nordic-type spas outside Toronto. They are generally far away and very expensive ($100+, just for access to the pools). If there were an adults-only section of Therme with similar facilities, easily accessible from downtown, I would be happy to pay $40. Not to mention that there will also be restaurants, liquor, etc. I can also imagine ducking in for lunch or a drink while walking around Ontario Place, since there is no other food service within several kilometres.

My opinion is that this is an exciting development. Despite being shuttered since 2012, absolutely zilch has been done with Ontario Place. I'd rather this something, even if it fails, than absolutely nothing for the next decade.
 
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mcornett said:
I'm not sure I see the issue. Other than bringing electrical and water services to the island (which is admittedly a significant expense), the remainder of the funding is coming from private sources.
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Therme is asking the province to pay for 2,000 underground parking spots! That will be quite expensive. As in ~100M+ I would imagine. Though @innsertnamehere , among others might provide a better estimate.

mcornett said:
This is also a lease, not a sale. If the business goes tits up, the land will remain publicly owned, with the benefit of a massive building and significantly improved outdoor spaces.
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We don't know the terms of the lease. Are they being given a lease below market value? Who collects the parking revenue? In the event of default, are the buildings auctioned off to the highest bidder who gets to inherit the lease? If so, do the new leaseholders get to apply to repurpose/redevelop said site over the term of the lease? So much is hidden from view; this is a government that has earned a measure of suspicion.

mcornett said:
Also, Theme already operates four very similar spas and has two under construction. It seems they know how to make a profit off this business model, or at least there is no reason to believe their business case is incorrect.
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Hmmm, Therme Bucharest was bleeding red ink in its first year:

business-review.eu

Therme Bucharest posts losses of EUR 4 mln after the first year of operation - Business Review

News - One of the biggest European centers of wellness based on thermal water, Therme Bucharest, which opened on January 14, 2016, registered losses of EUR 4
business-review.eu

In general, the company's finances are fairly opaque as it's not publicly traded; but the way in which it's structured may give one pause. It's part of a vertically integrated industrial conglomerate which might well recover much of its investment by providing the requisite technology, parts, and contracting services during the construction phase.

mcornett said:
On a personal level, I've been to several Nordic-type spas outside Toronto. They are generally far away and very expensive ($100+, just for access to the pools). If there were an adults-only section of Therme with similar facilities, easily accessible from downtown, I would be happy to pay $40. Not to mention that there will also be restaurants, liquor, etc. I can also imagine ducking in for lunch or a drink while walking around Ontario Place, since there is no other food service within several kilometres.
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Again I think the difference here is scale/cost; a Park predicated on drawing more visitors than Canada's Wonderland is being very bold in its assertions.

mcornett said:
My opinion is that this is an exciting development. Despite being shuttered since 2012, absolutely zilch has been done with Ontario Place. I'd rather this something, even if it fails, than absolutely nothing for the next decade.
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Fair enough, we have difference preferences for the site. I'm more enthused to see the Science Centre relocated to a revitalized group of pods. The proposed public realm improvements could be carried out for less than the cost of providing parking.

Restaurants could be rebuilt/refurbished as appropriate and bring back Children's Village/ A destination playground and spray pad complex for the kids and I think we're mostly good. There's certainly room for bigger dreams for the site, but this would not be one of mine.
 
Northern Light said:
Therme is asking the province to pay for 2,000 underground parking spots! That will be quite expensive. As in ~100M+ I would imagine
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$100M isn't coming close to it. That's only $50k a spot. You might pay that out in Scarborough on a greenfield site.

It'll be 2.5 to 3 times the cost per spot here which is $250m to $300m
 
Northern Light said:
We don't know the terms of the lease. Are they being given a lease below market value? Who collects the parking revenue? In the event of default, are the buildings auctioned off to the highest bidder who gets to inherit the lease? If so, do the new leaseholders get to apply to repurpose/redevelop said site over the term of the lease? So much is hidden from view; this is a government that has earned a measure of suspicion.

.
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I understand your perspective and I agree the lack of transparency is unfortunate. Just one minor point: It is possible that the lease rate takes into account some perceived value of the buildings or improvements, but a commercial lease would never allow a lessee in default to auction off a building on the land or assign the lease. The fixtures and land would simply revert to the province to do with as it wishes.
 
i can't imagine underground parking being that close to the lake a good idea. when i lived at NXT (103 & 105 The Queensway), our parking had 4 levels underground and was leaking like crazy and needed major major repairs. coincidentally, all the other condos around our build had above grade parking. that being said, i also don't think 2,000 parking spots is acceptable. they're not building this thing in the middle of nowhere. 2,000 spots? that's madness.
 
No offence, but I am extremely skeptical of my fellow forum members doing armchair feasibility studies here. I do not think we have any idea whether this will be successful or not. I assume that Therme has looked at this with great detail and have concluded that it is feasible and worth their many of millions of dollars in costs.

That being said, I can comment on what is a matter of principal: this is a poor use of very important parkland, regardless whether it is feasible or not. So yes, let's move it to some parking lot somewhere in the GTA. I couldn't care less where it ends up. As long as Ontario Place remains recreational parkland on the waterfront, in a city that could really use it.
 
mcornett said:
I'm not sure I see the issue. Other than bringing electrical and water services to the island (which is admittedly a significant expense), the remainder of the funding is coming from private sources. This is also a lease, not a sale. If the business goes tits up, the land will remain publicly owned, with the benefit of a massive building and significantly improved outdoor spaces.

Also, Theme already operates four very similar spas and has two under construction. It seems they know how to make a profit off this business model, or at least there is no reason to believe their business case is incorrect.

On a personal level, I've been to several Nordic-type spas outside Toronto. They are generally far away and very expensive ($100+, just for access to the pools). If there were an adults-only section of Therme with similar facilities, easily accessible from downtown, I would be happy to pay $40. Not to mention that there will also be restaurants, liquor, etc. I can also imagine ducking in for lunch or a drink while walking around Ontario Place, since there is no other food service within several kilometres.

My opinion is that this is an exciting development. Despite being shuttered since 2012, absolutely zilch has been done with Ontario Place. I'd rather this something, even if it fails, than absolutely nothing for the next decade.
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I agree completely.
 
Northern Light said:
@UtakataNoAnnex will doubtless contribute her own thoughtful answer, but I'll throw my two cents in here.

The sheer size of the facility, up against the price point seems problematic.

You're looking at $40+ per person. For a family of four somewhere north of $120 (I'm assuming some discount); but that's not including parking or transit to the site, nor any food/concession, nor any extra (massage, programming etc.)

That's not a cheap day out. Certainly there are lots of people doing Spas around town at more than that, but they tend to be comparatively smaller facilities, and often targeting the indulgent girls night out, or romantic couple day out/weekend (for those with accommodation). Here they will require families and lots of repeat traffic throughout the year to make the numbers work.

For perspective, they're talking about a draw of 5,000,000 annually, which compares to Canada's Wonderland at ~4,000,000 annually. I think for most families, the latter is probably a more interesting day out, and likely the same or lower cost.

Now, Therme would obviously operate year round, where CW has about 1/2 a year of downtime.

Even then, you're talking average daily attendance of 14,000

I would call that ambitious, particularly in a post-novelty phase.

I think they would actually do better in outer suburbia, beside a highway or such, on the premise they could be cheaper and up their return trip/family rate on that basis.

On straight construction costs (if they hit their estimate); with their ideal attendance, the province subsidizing servicing and construction of parking, My math put them at $10 admission to break even over 7 years.
That sounds good until you realize that's with no overhead, no insurance, no marketing, no operations etc, and no lease cost to the province for the land, either.

We could have a fun time pegging a fair lease number, but I struggle to come to a place where they can break even at $40 per ticket, based on their own numbers.

Of course, we don't know the land-lease terms; I don't have Therme's pro-formas, so there's a bit of guessing at work; but I would simply say I find their business case optimistic at first blush; and wonder, as others do, what the plan is should it fail.
Click to expand...
That all makes sense. Thanks. I actually didn't take in the sheer scale of the facility. I assumed it would've been more along the lines of the other smaller spas you mentioned. But considering they would need to appeal to families that would repeatedly visit I think you're definitely correct that this is unlikely to go well in the long "therme" (pun intended), to say the least.
 
I have to agree with @Northern Light on the financials. Looking at the estimates they’ve put together, the numbers just don’t make sense. It’s unclear this facility as presented will ever make money. It’s highly likely we’ll see some combination of heavy operational and capital subsidy coupled with architectural cheapening.
 
alklay said:
No offence, but I am extremely skeptical of my fellow forum members doing armchair feasibility studies here. I do not think we have any idea whether this will be successful or not. I assume that Therme has looked at this with great detail and have concluded that it is feasible and worth their many of millions of dollars in costs.

That being said, I can comment on what is a matter of principal: this is a poor use of very important parkland, regardless whether it is feasible or not. So yes, lets move it to some parking lot somewhere in the GTA. I couldn't care less where it ends up. As long as Ontario Place remains recreational parkland on the waterfront, in a city that could really use it.
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You can be as skeptical as you want...but without readily available information on this, speculation is all we really have. And one which does not state or claim that we will be correct nor know everything that's going on here. Instead, I would wager there is a few in discussion that have more of a finger on the pulse of this as they are more involved with the industry, I gather...thus making it more than just guessing from their respective armchairs. That said, it doesn't make it that they'll be right about it...as only time will ultimately tell on that. But I doubt they'll be that far off the mark either.

SKULL_KRUSHER said:
That all makes sense. Thanks. I actually didn't take in the sheer scale of the facility. I assumed it would've been more along the lines of the other smaller spas you mentioned. But considering they would need to appeal to families that would repeatedly visit I think you're definitely correct that this is unlikely to go well in the long "therme" (pun intended), to say the least.
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Fair enough! And you're welcome.
 
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This should go somewhere on the Woodbine RaceTrack site, like close to the relocated Etobicoke North GO station, and get the Finch West LRT extended to it too, before the LRT then heads on to the airport. There should be lots of space for a cheaper parking garage for anyone not taking transit.

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Those are more prosaic locations compared with OP...but one that has the potential to draw them a lot more business. And certainly less controversial for the PR. I mean, that's they what ultimately want with this, I gather...
 
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