It’s time for the truth

Taxpayers deserve details of aborted NHL arena

In Quebec City, they are putting the final touches on a publicly funded NHLsized arena that conspicuously lacks an NHL tenant. The prospects for landing one have grown distinctly more dim since shovels first broke ground two years ago.

In Calgary, city council has refused entreaties for public investment in a new arena for that city’s NHL team, while in Edmonton taxpayer money was poured into one that is currently being built. And in Markham, a Toronto suburb that for a period was the hub of NHL speculation, including a fingerwagging segment on Hockey Night in Canada in which residents were admonished for resisting the use of any public funds for a $400-million arena, the idea of luring a franchise with a new stadium is long since dead. Unless it isn’t. A motion was tabled at city council last month that would ask the property developer who was donating the land in the previous arena bid to retain the large parcel for another two years, in case someone else — with their own money this time — comes along with a grand vision and some arena blueprints.

But the Markham case in particular stands as an example of just how fraught these arena schemes are as a vehicle for public investment. It has been almost four years since city council and Mayor Frank Scarpitti first announced that plans for the GTA Centre, which had been conducted in secret up to that point, were well underway. Underpinning the business case for the arena were a series of reports, commissioned by the city, that touted substantial economic benefits from the project. At least, that’s what the arena supporters claimed the reports said. They were never released publicly. And they still haven’t been.

Karen Rea, who at the time was the head of a local ratepayers group, filed a freedomof-information request in 2012 to have the reports released. It is still winding its way through the byzantine maze that is the privacy commissioner’s appeal process.

But Rea is now a city councillor, having been elected last fall, and she’s trying to get the reports released through council now, too. She’s tabled a motion, to be heard Feb. 10, that would make them all publicly available. She thought she had enough support to get the motion passed, Rea says in an interview, but now isn’t sure. The city solicitor has warned councillors that releasing the reports could break confidentiality agreements.

This seems an odd concern. The reports, one from economists at the University of Alberta, and others from consultants such as Raymond James and KPMG, were commissioned by the city and received by the city. It would be highly unusual for a consultant to tell a client what they could do with the information provided to it. Besides, the city already has released some details of the reports publicly, in using elements of them to buttress its case for the arena. So, cherry-picking the reports is OK, but releasing them whole is illegal? Interesting.

The suspicion from arena skeptics has long been that the project’s supporters on council didn’t want the reports released because they knew the business case was wafer-thin. It was much easier to talk up the alleged benefits of a 20,000-seat arena if you didn’t have to acknowledge the various caveats that the studies almost certainly included.

When I spoke with one of the Alberta economists in 2012, he said that his report did note the potential for tens of millions of dollars in intangible benefits derived from an arena, as Markham literature at the time was boldly proclaiming, but it also warned against building a stadium without a tenant in place, as the city was intent on doing. Markham’s glossy promotion of the GTA Centre didn’t mention anything about that.

And that’s the lesson for Calgary, or Quebec City (belatedly), or any municipality that considers justifying a public investment in a stadium, which almost without exception are lousy public investments: someone can always point to a line in a report that suggests a case can be made for it. It’s like the old joke about consultants: ask one for a report on the sum of two plus two, and they will ask what you would like the answer to be before writing it.

In the spring of 2011, you could talk yourself into Markham as an NHL city without too much effort, which made it easier to ignore the arena project’s red flags. But then the New York Islanders agreed to move to Brooklyn, and the Florida Panthers were bought by new owners, as were the New Jersey Devils. Even the Phoenix Coyotes extended their lease in Glendale, crazy as that seems, were sold to new owners and became the Arizona Coyotes, which should solve everything. Meanwhile, the Canadian dollar has tanked and the NHL appears enraptured with Las Vegas, with rumours of a $450-million expansion fee for a team in that town. Had things gone differently in Markham, where council eventually nixed its own arena proposal last year amid vocal opposition, the city might well be building a stadium today with the prospects for an NHL franchise all but shot. Ask Quebec City how that’s going.

Councillor Rea says that’s why the full justification for Markham’s aborted arena plan needs to be released. The public ought to know what’s in those reports, she says. “In case [the arena] ever comes back, the residents should know the pros and cons of it,” she says. “The public should know what they were paying for.”