Category: Markham arena

Markham, Ontario, held a public meeting on its plans for building a $325 million arena on Wednesday night, and local residents seem to be asking the same question that’s been puzzling me:

“What I have seen so far, everything is wonderful, actually it’s grandiose, and that’s not my concern at all. The only issue I have is who‚Äôs paying for it. And I don‚Äôt like the answers there,” said Donna Bush, vice president of Markham Village City Ratepayers Association.

Moving past what may be the first-ever use of the word “grandiose” as a positive, what do we know about who’d be paying for the arena? The city and a private developer (GTA Sports and Entertainment) would each put up half the construction cost. Of the city’s half, “most” of it will be funded by “surcharges on new condominiums and apartments,” according to the Globe and Mail, with the rest coming from lease payments, parking fees, and a share of ticket sales.

That sounds like a rather stupendous (not meant as a positive) amount of money to be raised by fees on new housing development — as Openfile notes, it’s about $2,000 per city household, and only new ones would be paying the fee. And what happens if development slows, or arena revenues are less than expected with two arenas competing for events in the same market?

If any answers were provided at Wednesday’s public session, they didn’t make it into the press reports. Any FoS readers who were there and can provide an eyewitness account, by any chance?

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…