Tag: public funding for arenas

Calgary Flames v Ottawa Senators

Quebec City is in ‘final blitz’ to wrap up $400M deal for an NHL-friendly arena


We’re a little over a month away from the rebirth of the Winnipeg Jets, but another former market is hoping to bring the NHL back in the future. Quebec City hopes to become the next location to get a team, but before they do that, they’ll need to build an NHL-friendly arena. The current plan is to have that arena built by 2015, but it might all come down to getting everything agreed upon according to some tight deadlines.

Apparently that arena would cost about $400 million, with the polarizing plan requiring much of that money to come from taxpayers. The Montreal Gazette reports that Quebec City Mayor Regis Labeaume is finishing up a “final blitz” to agree upon a naming rights deal with media company Quebecor, with a September 7 deadline for the paperwork. That naming rights deadline will be a prelude to the postponed voting for the arena bill itself, which is expected to take place on September 20.

The situation already caused some messy political backlash in Quebec City, so Labeaume knows that they need to make sure that they get it right.

“We don’t want to get this wrong because when these documents will become public, we have a feeling it will generate a lot of interest on the part of specialists and pseudo-specialists. So to be honest, we’ll work on it until Sept. 7,” Labeaume said last week, of the negotiations.

The tentative deal with Quebecor is also facing opposition in the province and a legal challenge of the agreement is scheduled to be heard in court on Sept. 6, the eve of the deadline.

Former civil servant and Parti Quebecois minister Denis de Belleval is fighting to nullify the proposed agreement because it is a municipal contract that never went to public tender. Instead, Labeaume used what he called a competitive bidding process, inviting companies to express their interests in managing the proposed 18,000 seat facility.

De Belleval also argues Quebecor got a sweetheart deal from the city. The media company would get full control of the amphitheatre until 2040, with a possible extension to 2045, plus naming rights, for $63.5 million if Quebecor succeeds in landing an NHL team; the price tag would be $33 million without NHL hockey.

Quebecor’s rent would be $4.5 million annually with a team, $2.5 million without.

Apologies if some of these issues go over your head – it gets more complicated as the article digs into the deeper political impact – but the basic gist is that the next month could have an enormous impact on Quebec City’s chances of landing an NHL team sometime in the near future.

Naturally, that doesn’t mean that there won’t be more twists and turns after the paperwork is signed and the voting is over. If the Phoenix Coyotes’ situation taught us anything, it’s that these situations can provide plenty of ups and downs. These matters tend to get especially messy when public money is involved, so we’ll keep an eye on this developing situation in the next weeks, months and even years.

Arguing against publicly funded arenas

New York Islanders Fan Rally With Performance By Blue Oyster Cult

Perhaps this might not be the case for New York Rangers and New Jersey Devils fans,* but most hockey fans probably feel a bit bad for New York Islanders fans right now. A lot can change between now and 2015 – when the team’s lease with the decrepit Nassau Coliseum finally expires – but engineering voting on a low turnout day still couldn’t nab public funding for Charles Wang’s new arena referendum. There have been a variety of escape routes discussed around the Internet, but the outlook appears to be pretty bleak for the Islanders’ chances of staying in Long Island.

That’s a shame, but the lukewarm response indicates that the Islanders aren’t important to enough people. That’s not to say that they are without hardcore fans and people nostalgic for the days of Mike Bossy, Bryan Trottier and Billy Smith. It’s just to say that memories haven’t been enough to gloss over a long span of losing and limited hope for significant change.

That being said, Arctic Ice Hockey makes a strong argument against public funding for arenas even if the Islanders did hold a stronger place in the heart of fans in the region. Let’s take a look at the four-point argument against public funding for arenas.

1. Economic studies show that the impact is minimal

The economic impact of sports teams on an area ranks as one of those arguments that are too complicated for sports writers. That’s why the author points to two studies (here and here) to back up that point. I don’t think many would argue that there is no impact at all, but those studies point to the fact that the benefits probably don’t outweigh the drawbacks in most (if not all) cases.

2. If it was a good investment to increase property value, owners would want to use all their own money.

The second one also rolls into Point 1: if building an arena in an area would make that area flourish so much, they wouldn’t a deep-pocketed businessman (like that team’s owner) want to jump on the opportunity?

3. Subsidies reward poor financial management

The funny thing about publicly funded arenas is that you don’t exactly see those lucky owners giving money back to the taxpayers. Maybe there are plans in which some kickback does take place (and not just based on the hypothetical increase in property values) but when owners don’t have to fork over their own money, one of their biggest costs is taken away. That allows them to continue to make the mistakes that probably got them in that predicament in the first place: spending their money on the wrong players or giving good players too much money.

4. If a team can’t survive in a market, it shouldn’t be there.

One other bitter pill to swallow in that failed referendum on Monday was the tepid turnout (and the fact that it was designed to take advantage of lower voting numbers). If you’re confident that a market couldn’t stand the idea of losing its team, wouldn’t you call on a vote at the busiest time possible?

Nassau Coliseum has been derided for its condition, but the bottom line is that sports fans will sit in uncomfortable seats (often with bad sight lines) if it means they get the chance to root for a good team. Maybe a new arena would help them earn more money from the tickets they sell, but the tenor of the arguments would be about maximizing profits rather than mere survival if the Islanders were a contender.


Ultimately, these arena deals often come down to leverage. Jerry Jones received plenty of help in building his absurd stadium because Arlington wanted to attract the Dallas Cowboys. The Pittsburgh Penguins got Consol Energy built because of Sidney Crosby and their image as a rising team. It would be a shame if the Islanders relocate, but right now, not enough people care to make something happen. That’s the sad bottom line.

* – Unless they’re worried that their teams won’t get to beat up on them anymore.