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By RenaissanceWatcher (registered) | Posted January 30, 2011 at 18:25:55
The readers of and contributors to the Raise The Hammer website are not a single issue interest group. Some are young, some are old. Some are business people, some are not. Some are Tiger-Cat season ticket holders, some are not. A common thread is that most of us are Hamilton taxpayers. Hamilton taxpayers have the right to ask questions and/or complain when questions and/or complaints are justified.
The stadium costs and the risks of building a stadium for a CFL football team are both justifiable concerns.
a) Stadium Costs
On January 11, 2011, Mayor Bratina and Bob Young held a national press conference to announce the Ivor Wynne Stadium refurbishment proposal at an estimated cost of $115 Million.
On January 24, 2011, a city staff report estimated the Ivor Wynne Stadium refurbishment cost at $156.5 Million based on figures from Infrastructure Ontario.
It is unreasonable for Mayor Bratina or Bob Young to expect taxpayers to be comfortable with a $41.5 Million discrepancy (36%) in these figures.
Mayor Bratina has a duty to explain to the Hamilton taxpayer at tomorrow’s meeting how he and Mr. Young arrived at the estimate of $115 Million to refurbish Ivor Wynne Stadium three weeks ago. Did they obtain that figure from a consultant? If so, who provided the estimate?
Mayor Bratina keeps saying that he thinks the estimate from Infrastructure Ontario is too high. If he has concrete proof of this, he should present it at the city council meeting tomorrow.
b) Risks
So far, the City of Hamilton has received from Bob Young a three year guarantee on a 20 year lease for a refurbished Ivor Wynne Stadium that should have a life span of about 40 to 50 years. What happens if the Tiger-Cats continue to lose money after year four of the lease (i.e. 2018)? Will the Tiger-Cat owner fold the team? Will he threaten to move the team if the City of Hamilton doesn't reduce his rent? What happens if Toronto gets an NFL franchise in year 10 of the lease? What happens if the Tiger-Cat owner passes away? All of these risks need to be addressed.
One only needs to look at the Glendale, Arizona hockey arena scenario to get an example of a municipality sinking under the weight of a massive capital investment for a professional sports team. Glendale paid $175 Million to build a hockey arena for the Phoenix Coyotes in 2003 and the team signed a 30 year lease. Glendale, which was the largest creditor at the Coyotes' bankruptcy proceedings in 2009, eventually had to agree to a shorter lease with the NHL plus set up a line of credit to pay the NHL the amount of $25 Million to cover the league's losses in taking over ownership the team. Glendale most recently took the desperate step of agreeing to pay $100 Million to prospective buyer Matthew Hulsizer as part as his payment to purchase the Coyote franchise from the NHL plus $97 Million over five years to Hulsizer to operate the arena. Media reports indicate that Glendale is having trouble raising the money to pay Hulsizer. Yesterday, NHL commissioner Gary Bettman acknowledged that time is running out for Glendale. So much for their original 30 year lease.
The Hamilton situation is somewhat different than the Glendale scenario in a few respects:
First, there has been a much deeper history and brand loyalty for Tiger-Cat football in Hamilton than there has been for Coyotes' hockey in Glendale. However, it remains to be seen whether the actions of the current Tiger-Cat owner and president during the Pan Am stadium issue over the past ten months will have an impact on future Tiger-Cat brand loyalty.
Second, Hamilton is required to pay part of the stadium refurbishment cost in an amount to be determined tomorrow whereas Glendale had to pay the entire cost of constructing their arena.
Third, a Toronto NFL franchise would challenge the continued existence of the CFL, the Argos and Tiger-Cats over the long term whereas franchises in the NHL face no similar challenge. In other words, there is a risk as to whether the CFL itself will continue to operate in southern Ontario throughout the 20 year lease and/or throughout the life span of the refurbished stadium.
In addition to these risks, there are risks that the City of Hamilton will be assuming. The risk to its city building plans is the largest risk.
i) while the Ivor Wynne Stadium is situated in a venerable, working class area, the stadium is surrounded on three sides by residential housing. There is no room for economic growth in the immediate vicinity of the stadium. In fact, there has negligible economic growth in that area throughout the life span of the old stadium. How will the city overcome that obstacle and at what cost?
ii) concentrating city Pan Am spending on the Ivor Wynne Stadium refurbishment project could result in the loss of the permanent velodrome and perhaps even the temporary velodrome.
iii) concentrating city Pan Am spending on the Ivor Wynne Stadium project could result in no monies remaining to remediate the west harbour brownfield lands for whatever purpose they are eventually used for. How long is the city, and the west harbour area residents, prepared to wait to remediate and reuse the west harbour brownfield lands.
One hopes that Hamilton city council can make a decision tomorrow which minimizes the cost and risks and maximizes the benefits for the Hamilton taxpayers.
Comment edited by RenaissanceWatcher on 2011-01-30 19:30:17
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