Seven months after announcing plans for a $400 million hockey arena to be paid for entirely with public money — but with plans for the public to get some of its money back via arena revenues — Quebec City Mayor Regis Labeaume and Pierre Karl Peladeau, president of the communications giant Quebecor, announced yesterday that they’d reached a deal for Quebecor to operate the facility. According to reports over the weekend, the contract would look something like this:
- Quebecor would get full control of the arena through 2040, with an option to extend its rights until 2045.
- Quebecor would get to sell naming rights to the building, and presumably keep other arena revenues as well.
- The company would pay the province $63.5 million up front, plus $4.5 million a year in rent, if it lands an NHL team to play in the arena. Without a team, it would pay $33 million up front, and $2.5 million a year in rent.
Without seeing more details — the agreement is apparently close to 200 pages long, and I haven’t been able to find it online — on the face of it this sounds a lot like AEG’s lease to manage Kansas City’s Sprint Center: The city hands over all arena revenues to a professional manager in exchange for fixed rent payments. And while it looks like Quebecor will be paying a fair bit more than AEG for that privilege, the amount of money headed Quebec City’s way is still a pittance compared to its costs: Even if you ignore the $200 million that the province is putting in for construction costs, $63.5 million in a lump sum plus $4.5 million in rent is still going to leave the city losing several million dollars a year on its own $200 million construction debt.
And that’s if Quebecor even bothers to bring in an NHL team — making their rent higher if one is present certainly isn’t a good way of incentivizing their new arena managers to bid high to lure, say, the New York Islanders.
The Quebec city council is scheduled to vote today on the arena deal, and is expected to approve it. Hopefully at least the council meeting will shed a little more light on what exactly they’re agreeing to.