When it comes to public dollars (taxes, other city revenue), I believe that investment of public dollars should provide public benefit. To me, this means we need to see a return on the investment in some way. The Arena issue has been a very contentious one and it can be quite polarizing. It has become a big election issue – although I am hopeful it is not the only issue guiding candidate selection, as there are many opportunities facing our ward and city voters should be giving attention to.
I am a sports fan. I play hockey, one of my sons plays hockey and we attend Flames and Hitmen games when we can. I also attend a number of concerts at the Saddledome every year. As a major Canadian city, I recognize that having a functional sports and entertainment venue like an arena is important. While I think the Calgary Flames are good for our city and a new space is needed, the deal we make with the Flames needs to make sense for the city as a whole. How the arena is financially supported is the big question.
I struggle with the idea of providing direct funding to sports teams, as I don’t feel that in most situations public dollars should subsidize private business. That said, when you look at the big picture, the Flames provide value to our community. But what does that value entitle them to in terms of public dollar support? And what are the benefits?
Those in favour of a new arena suggest there would be great economic benefit for the city. Yes, building a new arena would create construction and planning related jobs. And yes, people who attend games, concerts or work for the Flames (arena support staff) also stimulate the economy by spending money at the venue itself and in the area around the arena. The Flames and any concerts/events held at the arena could attracts tourists and business investment. For example, Amazon and other large companies look at, among other attributes, all a city’s amenities when choosing to set up operations in a new place. There is also the argument that nearby businesses and housing values would increase with the area being busier and more vibrant. But does that increase in spending and revenue justify public investment? Would we as a city actually get our money returned in some way?
Several sports economists would argue no, we would not see a high enough return on investment to justify public dollars being used. Independent research suggests that new sporting facilities do not create significant economic boost for cities. Economist Victor Matheson, quoted in this article explains “Most of the independent research can’t find any economic impact associated with either new arenas, new stadiums, or new franchises or large events. Building a new arena doesn’t seem to have any effect on a city’s employment, per capita income, hotel occupancy rates, or taxable sales. For those cities that do see a business bump from hosting sporting events, it’s a fraction of what is touted’.
To me, this is troubling given what the Flames would like to see Calgary contribute.
I feel the City’s offer is very generous and was more than fair. I am surprised the Flames did not feel that way. I (like many Calgarians) am reluctant to support funding the arena with public dollars. However, I do recognize there seems to be some public appetite for a compromise and that Calgarians really value having an NHL team. Ideally if any public dollars are given (which I am not really in support of without a strong business case, which I have not seen), I would want to see the Arena be used for more than sports and concerts. I would like to see it targeting events like large conventions which would be an additional opportunity to attract visitors and business (and greater revenue) to the city. I am also not pleased with the negotiation tactics I’ve seen being used by the Calgary Flames organization – I don’t believe they have approached the process in good faith and in a positive way.
So What is Right for Calgary?
We need to be cautious and responsible in how we use our tax dollars and the return needs to be demonstrable. I also believe we need to be very thoughtful in how we move forward in the Victoria Park area as a Master Development Plan is created. We need to understand the role of an arena (if any) within a Culture and Entertainment District, and the plans for future development of residential in the area as well. We need to ensure as a City that we have control over how the growth of that area occurs and that a private business is not dictating that to us.
Location wise, the arena being built in Victoria Park logistically makes the most sense. Investing in that area could stimulate growth, development and provide economic benefits to businesses beyond the Flames but there are no guarantees. And would that benefit be any more than simply having the area redevelop without an arena? Any addition of homes, shops and businesses in Victoria Park would add to the vibrancy and economy of that area. Unlike the Flames, there would be no expectation from private developers that they receive city funds.
It is important to note that the CalgaryNext project (the land west of Downtown), while interesting, had some pretty significant flaws including distance to transit and a lack of parking that would have made that site problematic. Victoria Park on the other hand has much more direct access to transit (the current Red Line and eventually the Green Line). There are already existing amenities like parking, restaurants, with space available to expand those services as the area redevelops to include more housing and mixed use areas. It’s close proximity to other culture and entertainment venues like the National Music Centre and Stampede Grounds would help the east end of the Beltline and Victoria Park be revitalized.
This is definitely a divisive issue. It will be important that our new council have all the facts. This would include data from independent sources that analyzes and shows a definitive return on investment and projected financial benefits of the proposed project. The Flames need to approach the next round of negotiations with positive conversations, as does Council, to ensure we are working together with all stakeholders for the best outcome for all involved. Without those elements in place, I don’t think we are ready to do an arena deal.