If the facilitator brings enough creativity and urban sensibility to the table, he may be able to persuade the Ticats that their best interest lies in embracing the logic of urban investment and making it work for them.
By Ryan McGreal
Published May 21, 2010
It will be interesting to see whether and how the facilitator the City and the Hamilton Tiger-Cats selected can bring together a party that has already finalized a stadium location after a two-year process and a tenant that suddenly announced at the laste minute that the location is unacceptable.
The conflict comes down to competing interests, and understanding those interests can help us to sketch out a solution that will satisfy both sides.
First of all, stadium economics has been studied to death south of the border, and the conclusions are inescapable:
A stadium is not going to produce net revenue for the city regardless of where we put it; but a compact downtown location integrated into its surroundings can pay for itself by catalyzing related business development.
The city loses money on the stadium itself but gains money in new tax assessment on neighbouring businesses that capitalize on the crowds of people coming down for events. It becomes more or less possible to break even.
Making it really easy to drive and park in front of the stadium is a big hindrance to this. Car-based travel in the city makes it harder to detour into other destinations, and the parking itself displaces potential complements.
A stadium nestled into an attractive, walkable neighbourhood with good transit connectivity encourages the kind of ambulatory travel that supports street level commercial business.
On the other hand, a suburban, highway accessible stadium surrounded by parking is inevitably an economic black hole, a self-contained singularity that holds its patrons hostage for concessions and generates exactly zero third party investment. The benefit to the team is that patrons have no choice but to spend their money inside the stadium - there's nowhere else to go.
So a suburban stadium is better for the sports franchise but worse for everyone else; whereas a compact urban stadium is better for everyone else but means the franchise actually has to work to earn money beyond ticket sales.
Hence the conflict. The City's interest is in a location that will produce the most public good, or as Mayor Fred Eisenberger stated, "This is about what's best for the people of Hamilton - today and into the future."
On the other hand, the Ticats' interest is solely in maximizing their own profitability, or as team owner Bob Young put it, "The location should be a secondary consideration to the business arrangements."
In today's Spectator (I can't find the link online), columnist Andrew Dreschel concluded about facilitator Michael Fenn:
It's not clear if Fenn knows the football business, but there's no doubt he understands plenty about city building. Eisenberger must be thinking that if this were a football game, he just scored a touchdown. [Andrew Dreschel, "Finding Fenn: The story behind the story", The Hamilton Spectator, Friday, May 21, 2010, p. A13]
My baseline guess is that Fenn will end up bringing the City and the Ticats together on the West Harbour site by sweetening the deal for the Ticats, i.e. getting the city to agree to a tenancy agreement that flows more public money and more stadium revenue to the team than strict fairness would suggest.
But I'm left wondering: by the time we're done giving away the farm to keep the Ticats from picking up their toys and going home (wherever that may be), will the stadium come anywhere near recovering the public money - both capital and operating - we're going to end up plowing into it?
While we're at it, will remaining a dependent ward of the state help or hinder the Ticats to get creative and figure out how to make their own business profitable?
It may be possible to sell the Ticats on an urban stadium by selling them on the idea that they could own some of the complements. Revenue is revenue, whether it comes through a concession stand in a stadium surrounded by acres of parking or through a tailgate bar across the street.
If Fenn brings enough creativity and urban sensibility to the table, he may be able to persuade the Ticats that their best interest lies in embracing the logic of urban investment and making it work for them.
Of course, if Young is just looking for a quick way to stem his admitted losses and cash out, it won't be in his interest to commit to the kind of long-term vision that would enable the Ticats and the stadium to create lasting value together.
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