Replacing Minnesota’s aging ice arena systems

 

Baudette Ice Arena: A case study on the R-22 (freon) dilemma and the economic impact of hockey

Last Updated on Wednesday, 25 February 2015 16:33

 

By John Hamre
Let’s Play Hockey Guest Columnist
 

Located on the border with Canada, just southeast of Lake of the Woods, Baudette, Minn., is a community of approximately 1,200 people. Baudette, also referred to as the “Walleye Capital of the World,” lies on the Rainy River nestled in the north woods between Warroad and International Falls.

 

Baudette residents hold their hockey tradition proudly. The town hosted the first editions of Hockey Day Minnesota (2007 and 2008), both on Baudette Bay. Like so many towns in Minnesota, Baudette is proud of its citizens who go on to succeed at higher levels in their chosen sports or paths in life. Current Minnesota Wild defenseman Keith Ballard, former Golden Gopher Jon Waibel and  Divison I hockey-playing brothers Matt (St. Cloud State) and Aaron Gens (Alaska) all consider Baudette their hometown, as did former Gopher and 1972 Olympic silver medalist Wally Olds.

 

Today, the Baudette Ice Arena is in dire need of renovation. The arena is where these players grew up playing hockey and so many others continue to do so today through the Lake of the Woods Youth Hockey Association. Barry Westerlund, of the Baudette Area Arena Association shared the Baudette Ice Arena’s predicament.

 

“We desperately need a Mighty Ducks grant to help us replace our R-22 direct ice refrigeration system and floor. The system was installed in the 1970s. The compressors have been rebuilt several times and every year or two we are repairing leaks in the floor due to a bad concrete pour that has caused the steel pipes to corrode.”

 

Mark Roderigo and his brother own and operate Commercial Refrigeration Systems, of Virginia, Minn. He added, “We build rinks all over the United States and none has a more immediate need for replacement of their R-22 system than the Baudette Arena. The Holmsten system is over 40 years old and needs to be constantly monitored for leaks. Baudette’s ice cooling system is totally ‘cancerous.’ They need to be first in line for a conversion.”

 

The origins of this predicament, facing Baudette’s and many ice arenas in Minnesota and the U.S., can be traced to the original cooling systems installed in these facilities. Many of these cooling systems utilize the refrigerant R-22 (commonly known as freon) as a once-cheap, but now very expensive and efficient refrigerant. Environmental concerns and policies arose in the early 1990s, which are having impacts now.

 

Stevens Engineering, who works regularly with Roderigo and Commercial Refrigeration Systems on projects, explained the situation in a Feb. 12, 2013, summary document: “R-22 refrigerant has been the most popular refrigerant used by Minnesota ice arenas to keep the ice on the ice rinks frozen. However, with the signing of the Montreal Protocol in 1992, the United States Environmental Protection Agency (EPA) implemented the final rule of Section 604 of the Clean Air Act, limiting the consumption of hydrochlorofluorocarbon (HCFCs) chemicals. Regulations started to take effect in 2010 and will continue to significantly reduce the allowances to produce and import HCFCs through 2020 when production and importation in the U.S. will be halted altogether. R-22 is one of these targeted chemicals.”

 

Succinctly put, R-22 is the refrigerant used in so many ice arena floor cooling systems. If leaked, R-22 has a detrimental effect on the earth’s ozone layer, and can last in the atmosphere for an estimated 12 years.

 

The scheduled phasing-out of the use of R-22 under the Montreal Protocol, as sourced by the EPA, includes the following:

• Jan. 1, 2010 – ban on the production and import of R-22 and other chemicals within standards, except for ongoing service of existing equipment;

• Jan. 1, 2015 – a ban on the production of and import of all HCFCs, except for the ongoing service needs of existing refrigeration equipments;

• Jan. 1, 2020 – a ban on production and import of R-22; after this date only recycled R-22 will be available;

• Jan. 1, 2030 – a ban on all remaining production of and import to the U.S. of all HCFCs.

 

The dilemma is simple to evaluate – but not simple to solve – for Baudette and many such smaller communities with similar local ice arena situations.

 

The cost of R-22 used to be cheap – less than $1 per pound in the early 1990s. The price of R-22 increased from approximately $7 per pound to nearly $13 per pound as recently as in 2012. Now, as R-22 use is continually being phased out, its price has skyrocketed to $15-$18 per pound. With the continued restrictions on R-22’s production, importation and availability, its price is projected to continue to rise as a result of an ever more limited supply.

 

Within many arena refrigeration systems like Baudette’s, there are roughly 6,000 pounds of R-22 circulating, within nearly 10 miles of piping beneath the ice surface. With such an old, corroded, leaking system, it costs the Baudette Ice Arena $20,000-$30,000 annually to fix leaks in the pipes and replace leaked R-22. These are funds spent annually on repairs to an old system which uses the restricted refrigerant. These funds must be spent on repairs, so they cannot be saved towards the replacement costs of a new, regulation-conforming and environmentally safe ammonia cooling system.

 

The potential catastrophe facing the Baudette Ice Arena, and others like it, is if the whole system fails (through leak or massive rupture) and the entire 6,000-pound charge of R-22 is lost into the atmosphere. The present-day cost to replace the entire 6,000 pounds of R-22 would be approximately $90,000-$100,000. This would not include jackhammering out the concrete flooring, fixing the old, corroded and compromised piping system, and then relaying the piping system and concrete flooring – all expenses before spending the nearly $100,000 to replace the R-22. Such a catastrophe would in all probability force the Baudette Ice Arena to close, and the citizens of the area and community would lose access to one of its great facilities.

 

The conversion of ice arena cooling systems can be costly. Such a changeover in equipment alone can very from $50,000 to well over $1,000,000. In the Twin Cities, the Lee & Rose Warner Coliseum on the Minnesota State Fairgrounds ceased operations as an ice arena facility last year as a result of the prohibitive costs required – an estimated $1.5 million – to change over its ice cooling system.

 

The environmentally-sound, long-term pathway for many ice arenas is to refit their cooling systems with natural refrigerants of “zero ozone depleting potential” – if they can afford to. There are two such refrigerants: CO2 and anhydrous ammonia (R717). In Minnesota’s climate zone the latter is the only natural refrigerant to go to, according to Roderigo.

 

In Minnesota, elected leaders, local communities and citizen stakeholders have all worked to find solutions as the EPA’s implemented HCFCs bans are now taking effect. U.S. Senator Amy Klobuchar has been cited as actively communicating to the EPA, working to ensure a supply of R-22 through the transition phase is kept up so as to keep costs down for ice arenas still operating with it during this era of arena systems transition. 

 

State Senator Jim Metzen has been a lead proponent for funding from the state legislature, in order to provide help to the many community-owned ice arenas needing to change out aging and non-conforming cooling systems. He is one of the author’s of this year’s Mighty Ducks bill introduced into the Minnesota State Senate, along with co-authors, State Senators David Tomassoni, Tom Saxhaug, Karin Housley and Kari Dziedzic. 

 

This year’s bill, commonly referred to as Mighty Ducks SF 423, is to provide funding for grants to be awarded through the Minnesota Amateur Sports Commission (MASC) for ice arenas and communities in such need. Posted in the Minnesota Senate on Jan. 30, 2015, the bill has been referred to the State Senate’s Capital Investment Committee.  

 

 “This is an attempt to make sure that the arenas all around the state have some resources available to them in order to make the mandated transition away from R22,” Tomassoni said via e-mail. “It’s a competitive grant program and MASC will be the administrator of the money. Baudette should be eligible. However, this may not be enough to do the job statewide, though it will help. We must continue to make communities whole throughout Minnesota to meet this unexpected need if hockey rinks are to remain open. It could take more than one funding cycle and more than the $3,000,000 in this bill.”

 

“We did a similar bill last year and about $1.5 million was awarded to the Minnesota Amateur Sports Commission for a grant program to help improve older rinks,” Dziedzic said in an e-mail. “Many rinks across the state are facing an issue because of the phase out and future ban of R-22. I believe we should look at providing assistance because it will help the environment, provide jobs, and help ‘Main Street’ in many communities across Minnesota. If these rinks have to close, it could hurt the economy in some areas. The rinks bring people to the community who spend money in those communities.”

 

In 2014, 11 grants totaling $1.5 million were awarded by the MASC. These grants were specifically made to assist communities in “developing new ice arenas, eliminating the use of R-22 refrigeration systems, improving indoor air quality and renovating current arenas.” Grants for removing the R-22 refrigeration systems were available for up to $200,000, and required matching contributions from non-state funding sources.

 

“There is no firm Mighty Ducks grant program in place for next year, but we are cautiously optimistic that the legislature will approve some level of funding, in amounts we do not yet know,” MASC associate director Barclay Kruse said. “If that is established then we will publish grant criteria. R-22 is one of several priorities identified in the past program last year, air quality being another one, and arena renovation being a third area. That would probably be similar to what would be approved in the future. No guarantees, but we are cautiously optimistic that there will be some sort of Mighty Ducks grant program approved by the legislature this year.”

 

The MASC website encourages communities interested in Mighty Ducks grants in 2015 to contact them, indicating a specific need this year. The MASC is trying to gauge the continued need for state help in funding Minnesota’s many community-owned ice arenas.  Any future Mighty Ducks grants are dependent upon funding from the legislature.

 

John Evans served as a director of the MASC from 2011-14. He is a strong advocate for the  Mighty Ducks program. Evans shared insights on this issue facing Minnesota.

 

“The money that is invested – I want to make sure we make good, solid decisions to solve problems. If we want to continue to be the State of Hockey, policymakers need to help. When you look at the financial and environmental situations, the rinks at greater risk are the rural rinks. Probably, the solution is $15-20 million. If we can chunk it down every year and help save the Baudettes and Cloquets and Wilmar’s ...”

 

Evans outlined the relative scale of shared fund contributions to help local community arenas solve their R-22 issues, saying, “The state’s share of the costs is 20-25 percent, so a large share of the expenses still has to come from other local funding sources.”

 

Evans pointed out the accrued benefits state investments will have in helping community arenas refit their ice-cooling systems. They include cost savings in operations, more energy efficient systems and environmentally beneficial systems.

 

“Ninety-eight percent of the ice arenas in Minnesota are publicly-owned and are viewed as parks within communities,” Evans said. “The good news is we are the State of Hockey as a result of all the access to ice arenas. The bad news is the arenas operate at break even so they don’t have the money saved for the capital improvements needed. On MASC, we need to get out in front of this R-22 issue. It is important for the economic development of these communities. Rinks are part of the identity of communities in the state of Minnesota.

 

“I wonder what the economic impact is?”
 

 

Why is this funding so important to so many in Minnesota? In the State of Hockey, nearly all ice arenas are publically owned. Typical ice time costs of $150-$250 per hour are about half of that found in rinks elsewhere in the country. Hockey, ice skating and a community’s ice arena are part of the fabric of Minnesota’s culture. Access to skating, hockey, the community arena and its programs is fundamental to the state’s culture.

 

In 1991 and 1992 while serving as a graduate assistant coach for the University of Minnesota men’s hockey program, I wrote a report for The Commission for the Progression of Hockey in Minnesota. The report was titled, “The Economic Impact of Hockey In Minnesota.” The Commission included leading hockey persons within Minnesota such as Brian Burke, Doug Woog, Doug Johnson and others. Its mission was to continue growing the sport of hockey in Minnesota, and one way of growing media coverage and growth of the sport efforts was to quantitatively demonstrate the economic impact of the sport in Minnesota.

 

The abstract from my report, presented on March 13, 1992, stated, “This report outlines an estimate of the economic impact of hockey in the state of Minnesota. For this study, hockey has been defined as the participation in all levels of organized hockey, and the activities, businesses, and organizations that are directly attributable to, or affected by, these levels of hockey.”

 

Market segments of hockey activities were modeled and economic impact estimates were made. An aggregate economic impact of hockey in Minnesota for 1992 was estimated. I wrote then, “This study estimates the typical yearly economic impact of hockey in Minnesota at $271.09 million.”

 

Within the section on ice arenas, 132 then in the state of Minnesota in 1992, I  wrote, “The direct economic impact of ice arenas in the state of Minnesota can be conservatively estimated at $53.6 million. This figure is an estimate for all operating expenditures of ice arenas.”

 

If we only consider the effects of inflation from 1992 until 2015, and use a conservative estimate of 2.5 percent inflation annually, these economic impact estimates grow to the following values for 2015:

• $478.37 million economic impact of hockey in Minnesota;

• $94.67 million annual economic impact of ice arenas in Minnesota.

 

These figures in no way account for any growth in these sectors of Minnesota’s economy. They are only calculations of 1992 estimates with 23 years of inflation. 

 

Perhaps it’s fair to estimate the economic impact of hockey in Minnesota now to be between half a billion to one billion dollars? Perhaps its fair to estimate the annual economic impact of ice arenas in Minnesota is now a quarter of a billion dollars?

 

Needless to say, the economic impacts of hockey in Minnesota, and the ice arenas’ operations which provide venues for our state’s pastime, are real. Hockey in general, and ice arenas specifically, both significantly and positively impact the many communities throughout the state economically.

The ice cooling system at Baudette Ice Arena was installed in the 1970s and in need of replacement.