Can Edmonton have a successful hockey arena downtown without increasing taxes? ?Absolutely,? says Dr. Dan Mason.
?All NHL arenas in Canada built since 1995 have been 100 percent privately funded,? says Mason, an expert in sport management and sport organisations. He points to arenas in Montreal, Ottawa, Toronto and Vancouver that have all built their arenas that way. So the precedent is there already. ?However, what we?re seeing is a tendency for cities to step forward and recognize that the facility should be an anchor for a broader development project,? he says. Cities are entering into agreements with the team, team owners and developers to build arenas with guarantees for a certain degree of local development around the facility that includes recreational, cultural, commercial, and residential components to generate sufficient tax revenues to offset the public?s investment in the facility.
?Building an arena is so costly that a lot of team owners just don?t have the resources to build them,? says Mason. It becomes viable, though, when it?s part of an overall development project, which brings developers on board with the resources and wherewithal to undertake the project.
According to Mason, it?s key that these developments be seen as real estate developments rather than arena development projects. ?Arenas by themselves do not generate sufficient positive economic impacts to justify public subsidization,? says Mason.
One of the best examples of a successful real estate development that includes an 18,000-seat hockey arena development (comparable in size to a replacement for Rexall Place) that?s privately-funded, is the Nationwide arena in Columbus, Ohio. Home to the Columbus Blue Jackets, this is, in Mason?s words, ?not a hockey hotbed and yet that arena and district around the arena have been hugely successful because of the overall development. The arena has been built in a warehouse district and built to look like the surrounding areas; they developed bars and restaurants, put in an eight-screen movie theatre ? the first downtown in 30 years or so. The development also included a three-acre park, a performance amphitheatre, a fitness centre and condo loft developments.?
?One of the central arguments against building a downtown arena is that it?s empty when it?s not being used,? says Mason. ?In Columbus, around 750,000 people were coming into the area in a year to watch hockey, but the overall development draws over two million people to the area annually. It?s that two million that generates the economic impact, not just the people who are going to watch hockey. That?s one reason why it has been successful.?
Mason also points to the Staples Centre in LA which sits cheek by jowl with the Disney Performing Arts Centre. In addition, to build San Diego?s Petco Park, a baseball stadium for the San Diego Padres, the city floated a bond to pay for part of the facility with the guarantee that there would be $450 million of development around the facility within a specified timeframe ? the idea being that tax revenues from properties in the surrounding areas would service the debt load on the bond. As it happened, the area experienced a real estate boom and $1.4 billion worth of development has actually taken place around the arena, more than covering bond costs for the city.
?Edmonton is a growing city,? says Mason, ?and becoming a more prominent one. But compared to other cities it has a very lifeless downtown. Most, if not all, pre-eminent cities in the world have a vibrant downtown which has places where you spend time when you?re not working. You don?t need to go home, you stay for dinner, you engage in cultural activities. That?s what this project needs to offer ? it needs to make people want to be downtown.? There are bonuses to this that positively impact peoples? lives: a lessening in traffic density and the growth of a central economic heartbeat that will continue to thrive as people are drawn downtown to live, work and play.
He?s clear on what would work: ?Edmonton wouldn?t benefit from a downtown arena so much as it would benefit from a comprehensive development project downtown,? he emphasises.
Yet, given the Oilers poor showing in the playoffs this year, is this the right time to build? ?Absolutely,? says Mason. ?The Columbus Blue Jackets have never made the playoffs since they entered the NHL and their winning percentage is far worse than the Oilers?. The important thing is to create this destination where there are all kinds of things going on.?
Another compelling reason, he says, is that ?hockey is a cultural institution in Edmonton, so the development can be designed to accommodate other activities not just related to the Oilers but perhaps lower levels of hockey ? tournaments and other hockey activities.?
Dr. Mason?s research into how cities leverage arena projects as part of infrastructure development is funded by a grant from the Social Sciences and Humanities Research Council.
?All NHL arenas in Canada built since 1995 have been 100 percent privately funded,? says Mason, an expert in sport management and sport organisations. He points to arenas in Montreal, Ottawa, Toronto and Vancouver that have all built their arenas that way. So the precedent is there already. ?However, what we?re seeing is a tendency for cities to step forward and recognize that the facility should be an anchor for a broader development project,? he says. Cities are entering into agreements with the team, team owners and developers to build arenas with guarantees for a certain degree of local development around the facility that includes recreational, cultural, commercial, and residential components to generate sufficient tax revenues to offset the public?s investment in the facility.
?Building an arena is so costly that a lot of team owners just don?t have the resources to build them,? says Mason. It becomes viable, though, when it?s part of an overall development project, which brings developers on board with the resources and wherewithal to undertake the project.
According to Mason, it?s key that these developments be seen as real estate developments rather than arena development projects. ?Arenas by themselves do not generate sufficient positive economic impacts to justify public subsidization,? says Mason.
One of the best examples of a successful real estate development that includes an 18,000-seat hockey arena development (comparable in size to a replacement for Rexall Place) that?s privately-funded, is the Nationwide arena in Columbus, Ohio. Home to the Columbus Blue Jackets, this is, in Mason?s words, ?not a hockey hotbed and yet that arena and district around the arena have been hugely successful because of the overall development. The arena has been built in a warehouse district and built to look like the surrounding areas; they developed bars and restaurants, put in an eight-screen movie theatre ? the first downtown in 30 years or so. The development also included a three-acre park, a performance amphitheatre, a fitness centre and condo loft developments.?
?One of the central arguments against building a downtown arena is that it?s empty when it?s not being used,? says Mason. ?In Columbus, around 750,000 people were coming into the area in a year to watch hockey, but the overall development draws over two million people to the area annually. It?s that two million that generates the economic impact, not just the people who are going to watch hockey. That?s one reason why it has been successful.?
Mason also points to the Staples Centre in LA which sits cheek by jowl with the Disney Performing Arts Centre. In addition, to build San Diego?s Petco Park, a baseball stadium for the San Diego Padres, the city floated a bond to pay for part of the facility with the guarantee that there would be $450 million of development around the facility within a specified timeframe ? the idea being that tax revenues from properties in the surrounding areas would service the debt load on the bond. As it happened, the area experienced a real estate boom and $1.4 billion worth of development has actually taken place around the arena, more than covering bond costs for the city.
?Edmonton is a growing city,? says Mason, ?and becoming a more prominent one. But compared to other cities it has a very lifeless downtown. Most, if not all, pre-eminent cities in the world have a vibrant downtown which has places where you spend time when you?re not working. You don?t need to go home, you stay for dinner, you engage in cultural activities. That?s what this project needs to offer ? it needs to make people want to be downtown.? There are bonuses to this that positively impact peoples? lives: a lessening in traffic density and the growth of a central economic heartbeat that will continue to thrive as people are drawn downtown to live, work and play.
He?s clear on what would work: ?Edmonton wouldn?t benefit from a downtown arena so much as it would benefit from a comprehensive development project downtown,? he emphasises.
Yet, given the Oilers poor showing in the playoffs this year, is this the right time to build? ?Absolutely,? says Mason. ?The Columbus Blue Jackets have never made the playoffs since they entered the NHL and their winning percentage is far worse than the Oilers?. The important thing is to create this destination where there are all kinds of things going on.?
Another compelling reason, he says, is that ?hockey is a cultural institution in Edmonton, so the development can be designed to accommodate other activities not just related to the Oilers but perhaps lower levels of hockey ? tournaments and other hockey activities.?
Dr. Mason?s research into how cities leverage arena projects as part of infrastructure development is funded by a grant from the Social Sciences and Humanities Research Council.