The National Post ran a long article on the Markham arena plan on Saturday, and while the headline was about how the Toronto suburb’s new building could end up a stalking horse for teams’ arena demands in other cities, I’m more interested in the revelation that our old friend Brad Humphreys was one of the economists who drew up the economic impact study that predicted “substantial intangible benefits” from the project — and that that wasn’t the main finding of his report:
“I think they wanted to take some of my advice, but not all of my advice,” he said. “They wanted to cherry-pick it.”
The sticking point, he says, is that the city wants to proceed with the arena — half of which would be paid for by a private-sector group led by businessman Graeme Roustan and half of which would be funded through money raised by Markham — even though it lacks an anchor tenant.
On the question of economic viability, Humphreys said, you can’t evaluate an arena without taking into account its tenants, or lack of same. “Without an anchor tenant, it’s a lot more difficult to make an economic case,” he said. “I certainly told them in my report that it’s not a good idea to build the arena without a team in place.” He said he hasn’t heard from anyone with the city since April.
Humphreys indeed warns that by building an arena on spec, “you set yourself up to be the place everybody threatens to move to,” citing St. Petersburg’s relationship with MLB in the 1980s and ’90s as an example. (Kansas City would be another good one from the 21st century.) But he also points to another suburban arena that hasn’t gotten nearly as much attention:
Humphreys noted the more analogous case for Markham, located about 40 kilometres from downtown Toronto, is that of Hoffman Estates, a suburb about 40 kilometres from downtown Chicago. Sears Centre Arena — it even has the Canadian spelling for some reason — was built there in 2006. At a more modest 11,000 seats, it had plans to lure concerts and host minor-league sports — about the same business case as Markham’s proposed GTA Centre, even though the latter will be much larger and more expensive to build.
Sears Centre Arena lost boatloads of money and, according to The Chicago Tribune, was on the verge of foreclosure in 2009 before the village of Hoffman Estates stepped in to keep it afloat. Its roster of former tenants includes the Chicago Hounds of the United Hockey League, the Chicago Storm of something called the Xtreme Soccer League and the Chicago Bliss of the Lingerie Football League. An ECHL team, the Chicago Express, played there in 2012 but was last in league attendance at fewer than 3,000 fans per game. The franchise folded in April. Sears Centre Arena’s current tenants are the Chicago Slaughter of the Indoor Football League and the Chicago Soul of the Major Indoor Soccer League. The latter is an expansion team, and so far its first coach resigned before the team began play.
Other scheduled Sears Centre Arena events include the state “Cheerleading and Poms Competition” and a bull-riding championship. A Markham arena might do better — it’ll be bigger than the Hoffman Estates venue, and while Toronto is roughly the same size as Chicago, it doesn’t have an equivalent to the Allstate Arena to suck up events that don’t go to the Air Canada Centre. But Humphreys’ warning is still a useful one — as well as a good reminder that even legitimate economic impact reports can end up turning into PR documents in the hands of government officials.