An Arena, Concert Hall and Convention Centre – What to Do About Hamilton’s Aging Sports and Entertainment Venues?

City of Hamilton First Ontario Centre Copps Coliseum Councillor John-Paul Danko

Hello, Ward 8 Neighbours!

The City of Hamilton is currently undertaking a comprehensive review of our City’s aging sports and entertainment venues (First Ontario Centre, Hamilton Convention Centre and First Ontario Concert Hall).

Council’s direction to staff was to look at utilization of development opportunities to fund revitalization of these assets.

For more details, please continue reading below.

A new arena either downtown or at Limeridge Mall is currently estimated to cost Hamilton taxpayers tens of millions of dollars – the equivalent of a 1-1.5% tax hike.

As the Ward 8 Councillor, I have serious reservations about any plan that requires that level of taxpayer investment.

The following article provides an in-depth analysis of the work completed to date and my evaluation of the available information.

Council Direction

In December 2017, the previous term of Hamilton City Council approved a motion directing City staff to investigate opportunities for the redevelopment of the FirstOntario Centre (Copps Coliseum), the Hamilton Convention Centre, the Hamilton Art Gallery and the FirstOntario Concert Hall (Hamilton Place).

A copy of the original motion is available here as Item 16 on the Minutes from the December 8th, 2017 City Council Meeting: Sports, Entertainment and Convention Venues Review (Item 9.1).

It is important to note that in the original 2017 direction, the City’s contribution was restricted to the potential sale and/or transfer of ownership of the existing facilities.

In January 2019, the current term of Hamilton City Council approved a staff recommendation to commission an independent third party expert consultant to conduct an assessment of Hamilton’s sports, entertainment and convention centre facility needs, given the City’s size and position within the Southern Ontario marketplace.

At the January 16th, 2019 General Issues Committee meeting the scope of this investigation was specifically limited to Downtown, in a clustered precinct that includes residential and commercial development.

The General Issues Committee also confirmed that Council’s contribution was restricted to land and/or approval authority.

The amended January 2019 staff report is available here as Item 18 on the General Issues Committee Report from the January 23rd Council meeting.

At no time was Council anticipating funding redevelopment of any of these venues through a City capital investment of tax dollars.

Subsequent to January 2019, staff hired Ernst & Young LLP to conduct the review.

A complete copy of the Ernst & Young report titled “City of Hamilton Entertainment Venues Review – Final Report, dated August 15, 2019” is available here. This report was presented to the General Issues Committee of Council in September 2019.

The corresponding staff report is available in full here.

Bulldogs Propose a New Arena At Limeridge Mall

As the City was beginning it’s review of Hamilton’s sports and entertainment venues, the ownership group of the Hamilton Bulldogs submitted an unsolicited proposal to the City of Hamilton for a new arena at Limeridge Mall.

On October 2nd, 2019 Hamilton Bulldogs owner Michael Andlauer presented details of the Bulldogs proposal to the General Issues Committee.

A complete copy of the presentation the Bulldogs made to council is available here.

Video of Mr. Andlauer’s presentation and subsequent discussion is available here (click on Item 8.2).

The cost of a new 6000 seat arena at Limeridge Mall was estimated by the Bulldogs to be a total of $126 million dollars ($72 million for the arena and another $54 million for a parking garage).

Mr. Andlauer suggested that the Bulldogs ownership group would invest $30 million dollars towards the cost of construction. However, when provided the opportunity during questions, Mr. Andlauer refused to publicly guarantee this commitment.

The following are copies of my notes taken during the meeting:

Please review the information available above and decide for yourself if you would choose to pursue a $126 million dollar investment based on the information that was provided.

Assessment of the Bulldogs Limeridge Mall Arena Proposal

Coun. Sam Merulla (Ward 4), who first asked for a study on divesting or redeveloping downtown entertainment facilities, dismissed the Bulldog’s unsolicited arena pitch as “pie-in-the-sky.”

Mountain councillor John-Paul Danko (Ward 8), meanwhile, said he is “not sold” on the consultant’s assumption that the city is even obligated to replace its aging, costly downtown arena.

“I’m trying to take the emotion out of it,” he said, noting the city’s attachment to its sports teams.

Matthew VanDongen – Hamilton Spectator/Hamilton News

In my opinion, the proposal the Bulldogs presented to council was purely conceptual.

Further it would require a taxpayer investment of $96 million dollars (if the Bulldogs fulfill their promise to directly finance $30 million)

To put that in perspective, $96 million dollars is equivalent to a 1.5% tax hike for you and every other property taxpayer in the city – or substantial cuts to roads, snow removal, ambulance, fire etc.

While the Bulldogs did reference a potential Federal/Provincial grant and partnership with Metrolinx to help fund a portion of the project – through questioning by council it was revealed that no actual investigation of these possible funding sources had actually been undertaken beyond a cursory conversation with the Provincial government.

This is not, and never was, a mountain versus downtown issue – or a discussion about a new arena for the Bulldogs.

It is important to recognize that while the Bulldog’s offer of $30 million dollars towards construction of a new arena is a very generous offer, it is the taxpayers of Ward 8 and Hamilton that will be left paying the gross majority of the cost to build a new arena.

In fact, Hamilton is one of the largest hockey markets in North America without an NHL franchise, so while we appreciate the contribution of the current Bulldogs ownership group, there is no reason to believe that they are the only OHL or AHL owners who would be interested in financially backing a Hamilton team.

In this case, I can say with certainty that a Limeridge Mall arena is not in the best interest of Ward 8 taxpayers.

I am proud to be the only mountain councillor to vote against further investigation of the Bulldog’s Limeridge Mall proposal – because it was the right thing to do.

The following Twitter discussion outlines several further reasons why an arena at Limeridge Mall is not financially viable for Hamilton:

How Much Will A New Arena Cost Taxpayers

Based on the Ernst & Young report, a new ten thousand seat downtown arena will require a taxpayer investment of $78.4 to $87.3 million (see Table 18 – pg 60).

This is estimated to save Hamilton taxpayers $13.1 to $26.2 million over maintaining the existing facilities (the status quo option).

A city consulting study has recommended partnering with the private sector on a downtown entertainment “precinct” that would feature a new $130-million, 10,000-seat arena and concert facility as well as a new convention centre.

Under that plan, private partners would pay up to 30 per cent of the cost of a new “sports and entertainment facility,” with new development and related revenues helping the city recoup its investment.

The catch? The study says the success of a downtown arena hinges on having an “anchor tenant” like the Bulldogs.

Under the Lime Ridge proposal, mall owner Cadillac Fairview would lease land to the city for $1 and run the free 1,800-space parking garage while the Bulldogs would operate the new arena. Andlauer argued that would end the taxpayer subsidy of the FirstOntario Centre, which could be sold.

Mountain Coun. John-Paul Danko also pointed out revenue from major FirstOntario Centre shows last year was nearly $2 million, compared to an operating loss of nearly $100,000 for regular season Bulldogs games.

Matthew VanDongen – Hamilton Spectator/Hamilton News

Next Steps

In October 2019, Hamilton City Council voted to receive the Ernst & Young and staff recommendation to continue investigation of a new 10,000 seat downtown arena and options for renewal of Hamilton Convention Centre and First Ontario Concert Hall.

A copy of the October 2nd, 2019 staff report is available here.

Council also directed staff to provide a report back on the feasibility of the Bulldog’s proposal for Limeridge Mall.

There’s another option, though, if you’re willing to think outside the penalty box.

Mountain councillor John-Paul Danko mused aloud this week about whether the city would be better off selling its valuable arena land and reinvesting millions of dollars in other priorities.

He argued the consultant approached the arena study with the assumption a 10,000-seat hockey arena is necessary. “That base assumption, I’m not sold on that.”

Matthew VanDongen – Hamilton Spectator/Hamilton News

My Position as the Ward 8 Councillor

The original 2017 resolution that initiated the current review of Hamilton’s sports and entertainment venues specifically limited the City’s contribution to utilization of development opportunities to fund revitalization of these assets without taxpayer capital investment.

As these reviews proceed, unless significant new information is revealed, I anticipate that my position on these issues will remain consistent with the intent of the original 2017 direction – no taxpayer capital investment.

As it stands now, both the Bulldog’s proposal for a new 6000 seat arena at Limeridge Mall and Ernst & Young’s recommendation for a new 10000 seat arena downtown require a City investment of tens of millions of tax dollars.

Neither option meets the benchmark for no taxpayer capital investment originally set by Council.

As Hamilton is one of the largest hockey markets in North America without an NHL team, has already proven to be a lucrative concert and entertainment market and is one of the top development investment markets in Canada, I remain confident that with time other redevelopment opportunities and/or partnerships will come forward.

Since being elected, I have worked very hard to ensure that the decisions I make are what I believe to be in the best interests of Ward 8 taxpayers, based on a thorough evaluation of the information I have available to me – and that is the work I intend to continue as your Ward 8 Councillor.

Questions or Concerns?

If you have any questions or concerns, please feel free to contact the Ward 8 office here.

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