Friday, March 28, 2008

Shell game

This is the Edmonton Gardens. The old barn opened on Christmas Day 1913 and would serve as the premier hockey venue in the city for the next 60 years, with the Edmonton Eskimos hockey club, the Allan Cup and WHL Championship-winning Edmonton Flyers, the three time Memorial Cup champion Oil Kings and the fledgling World Hockey Association Edmonton Oilers all calling the place home. The Gardens was shuttered in 1974 when the brand new Edmonton Colisieum opened up across the street, and it was later demolished to make way for the Northlands Agricom.

Now, it looks like the Coliseum­-known in today's corporate synergy speak as Rexall Place-is soon to join the old Gardens in hockey rink Valhalla. Despite operating for roughly half the lifespan of the building in superseded, Rexall has been deemed unsuitable for the needs of its main tenant going forward. The wise men and women tasked with deciding Rexall’s fate have concluded the rink where Gretzky, Messier, Kurri, Coffey, Smyth and other titans of the game all plied their trade must be replaced by a facility that is moderately larger and a few kilometers down the LRT line in the heart of Edmonton’s downtown. This whole saga has been documented extensively both here at Punjabi Oil’s and elsewhere, most notably at the Battle of Alberta and, when its proprietors can tear themselves away from penning homoerotic slash fiction, Covered In Oil.

I don’t have a whole hell of a lot to add to the larger discourse on this subject that hasn’t already been covered by some of the aforementioned worthies (my personal take is that the Oilers’ billionaire ownership can build their new luxury box farm wherever they please, provided the taxpayer not be asked to assume any undue risk. Such as, say, taking on $300 million in civic debt to finance the motherfucker). I’m definitely not going to get into the issue of whether or not a new rink is even necessary right now.

Rather, I’d like to focus on a single aspect of the Summary Report of the Leadership Committee for a New Sports/Entertainment Facility for Edmonton (henceforth known as “the committee”) that would have me tearing out my hair were I not already one of the many unfortunate victims of early-onset male pattern baldness. And that’s the huge gulf between what the committee is promising and what it says it will cost. The committee makes it quite clear that the arena, if built downtown, must be part of a larger development project that integrates with and spurs on Edmonton’s ongoing downtown revitalization. Indeed, if the glowing prose of the committee’s report is to be believed, the new arena will do just about everything short of healing the blind, curing the sick and putting an end to boner problems forever. To wit:
The right development, in the right place, will not only draw millions of visits to the city annually from far and wide; it will revitalize our downtown.

The development of a new sports/entertainment facility and associated multipurpose activity area can be the catalyst for ensuring Edmonton’s downtown is successful and vibrant well into the future.
Doesn’t that sound just swell? To back up these rather grandiose claims, the report cites arena projects in such hot spots as Indianapolis, Indiana and Columbus, Ohio where, the story goes, construction of sports arenas helped “enhance…a city’s image and critical economic and community goals.” When considering where to build a new rink, Edmonton must look at what transformed places like Columbus the new Paris; thus, the committee recommends “a sports/entertainment facility be designed as part of a multipurpose activity district” that includes restaurants, bars, retail, cultural activities, brothels, casinos, hotels, spas and so forth. Since the report concedes that “sports/entertainment” facilities generate sweet F.A. on their own in terms of economic activity, these additional attractions are completely necessary for the project to succeed and provide the public with some return on its inevitable and not-inconsiderable investment in tax dollars:

A new sports/entertainment facility can capture and focus the city’s projected growth, revitalize our downtown core and generate tax revenue through new housing, retail and office space, hotels, restaurants and additional facilities.

And here’s the rub. There’s no costs put forward as to how much this new downtown funland will actually cost, what it will include, and, most importantly, who’s going to pay for it. The only numbers the committee bothered to look at (or at least release to the public) were the costs associated with the construction of the arena and the arena alone. The rest, one is left to assume, will simply spring up in the arena’s wake as businesses flock to bask in the awesomeness that is the downtown arena. Problem is, the committee’s own case studies don’t back that claim. In two of the three cases where the committee claims a sports arena helped spur additional development, that additional revenue generating development was actually part and parcel of the arena project. In other words, in the three cases the report cites, the development of a multipurpose activity district and all the attendant benefits was a precondition of the construction of a sports facility and not a consequence thereof.

Columbus-based Nationwide Insurance agreed to pay 90 percent of the cost of building the new arena with the ownership of local newspaper agreeing to finance the balance. Columbus would pay for all of the needed infrastructure improvements and fund the environmental remediation (with help from the state of Ohio). However, Nationwide wanted one other incentive before agreeing to pay for the arena. It wanted to be designated as the master developer of an area adjacent to the arena and to have the convention centre agency — use its power of eminent domain to acquire additional parcels of land.

Indianapolis had a similar story, with the public rejecting outright any public financing of a new ballpark there until the team’s owner guaranteed $450 million in new real estate development.

To be fair, the report does suggest (down in the Appendix and separate from the actual recommendations) that commitments for additional large-scale private sector investments be secured beforehand. But one gets the distinct impression from the tone of the text and the structure of the financial estimates that this is not priority one. Otherwise, wouldn’t we be talking about a $1 billion or so comprehensive downtown redevelopment strategy? Instead it seems to this observer that the committee does exactly what one of its own subcommittees cautioned against and treats the arena as an isolated project. It’s like the Underpants Gnomes from PDO's post below have struck again:

Phase One: Build arena
Phase Two: ????
Phase Three: Collect tax revenue

If this thing goes ahead, as it sure looks like it will, the good people of Edmonton need to ensure that the full scope and cost of the project be known, the strategy made clear and all parties made fully accountable to hold up their end of the bargain.

1 comment:

PunjabiOil said...

Just wanted to say, excellent post.

Nothing much more to add.