Toronto suburb plans new arena; push for NHL team next?

There could be a new player in the arena sweepstakes: The town council of Markham, Ontario (a suburb of Toronto) has voted to provide half the funding for a new $325 million, 20,000-seat arena that could play host to an NHL team to compete with the Maple Leafs.

How exactly the final bill will be paid is a bit unclear. Town officials claim that the $162.5 million in bonds will be repaid by “charges to developers and service fees at the arena,” though so far as I can tell there’s no written lease yet with the developer, GTA Sports and Entertainment. The rest of the money will come from GTASE, presumably from the profits from running a sports and concert arena in Canada’s largest market — while normally I’m skeptical of arenas paying their own way (see Kansas City), the market size and relatively low construction cost make this one feasible, if by no means a slam dunk.

Meanwhile, the sports media have set about the important task of speculating how this as-yet-unbuilt arena will affect the NHL arena shakedown market. The National Post, citing another newspaper story based on the ever-popular “unnamed sources,” says that “the proposal was being fast-tracked so a viable plan could be presented to NHL officials in case of a franchise relocation.” The Post continues:

An NHL-ready arena in Markham becomes an excellent bargaining chip when the league wants to convince a city that already has a franchise that it needs to invest public money in a new or upgraded arena. The next time the teams in Phoenix, New Jersey or Florida, for example, run into financial problems, the prospect of a glittering new building awaiting them in hockey’s largest market will be used to get the owners a sweeter deal at home. That’s a nice franchise you have there, fellas. Be a shame if something were to happen to it.

Hey, that’s my hyperlink joke!

The problem with using Markham as a NHL relocation target, or even as a move threat stalking horse, is that its territorial rights are controlled by the Maple Leafs, who are going to demand a king’s ransom in cash to allow anyone else to move in. That, in turn, is going to make bringing in an NHL team look like not such a good deal for GTASE, since they should be able to easily enough fill dates with Lady Gaga shows, which don’t require paying off the local sports monopoly. Not that that’s going to stop the league from using it as an idle threat, of course…

7 comments on “Toronto suburb plans new arena; push for NHL team next?

  1. Why would you even gamble with this considering there is a town a few miles over that has a rerenovateable arena?

    Stupid bet is stupid IMO.

  2. You talkin’ Hamilton? It’s a bit of a stretch to count Hamilton as part of the GTA. More importantly, the power of U.S. Senator (D-NY) Charles Schumer makes Hamilton impossible for the NHL. It’s too close to Buffalo. Markham is northwest of Toronto, which is important in avoiding Senator Schumer’s attention.

    It seems clear that the GTA could support another NHL team, but if I had to bet I’d think a $500M expansion fee (with maybe $200M going to the Leafs) is more likely than a relocation. I’ve talked to GTA residents who are even on the Buffalo Sabres’ season ticket waiting list because Maple Leafs tickets are so expensive.

  3. Markham, that’s an interesting area. I have family there. Hey, if it’s worth it, then by all means, let them do it. It’s not fair for Toronto to charge territorial fees when the market can clearly support two teams in the city.

  4. The interesting part is that, while the league does have territorial rights, they would get killed in litigation as being anti-competitive. Hence the league’s trepidation to even use the term when the Hamilton issue came up.

    Ben, Hamilton isn’t nearly as good an option as the media here lets on. Renovating Copps would probably cost as much as the Markham arena, parking is brutal, the QEW would be a nightmare before gametime, and the area around Copps isn’t that stellar. That’s not even getting into the Sabres, whose owner probably didn’t just pay a boatload for the team without a guarantee there wouldn’t be a team in Hamilton.

    If you’re going to get do the most time (get dinged with a fee), you may as well do the best crime (get as close to Toronto as possible in a new rink).

  5. the proposed construction #’s are typical of franchise owner/politician lowballing costs to get attention and pulling a bate-and-switch later with “cost overruns” that were conveniently ignored to get public approval.

  6. So the new arena in Markham would compete against the Air Canada Centre for concerts and/or events. Dumb idea.