The cost of building new arenas in Edmonton and Markham; one city with an NHL team and another dreaming of one
For the rink
$162.5-million: From private investors: To finance the arena, the City of Markham will borrow $325-million with private partner GTA Centre LP, which is owned by businessman Graeme Roustan and financially backed by developer Rudy Bratty through his company, The Remington Group Ltd. Bratty and Roustan guarantee they will pay back $162.5-million of that loan.
$162.5-million: From the city. Money will be raised through surcharges on event tickets at the arena, parking revenue on the site and a “voluntary” levy on developers on new housing construction for the next 20 years. The levy will range from $2,000 to $5,000 per single family home, an amount critics of the deal say will be passed on to new home buyers.
The rest of the project
The arena is part of a bigger project Markham wants to develop at the intersection of Highway 407 and Kennedy Road which will include an amateur sports high-performance centre, a university campus, a hotel, office space, high-density housing, a performing-arts centre and retail shops. These costs are estimated to be as much as $400-million on top of the arena.
$200-million: From the city, to realign Highway 407.
$100-million: From the city, for a new parking structure.
$80- to- $100-million: From the city, for local road improvements.
The plan is for the city to own the arena and declare it a municipal capital facility which would exempt it from development charges and property taxes.
While the city estimates the arena will bring in $61-million a year to the local economy, the Markham Village City Ratepayers Association estimates the city will forfeit as much as $162.5-million in revenue over the next 20 years (a $100-million loss on 20 years worth of property taxes; $42.5-million from lack of HST payments; $20-million in uncollected development charges).
For the rink
$140-million: From the city. A mix of funding that includes $45-million from a Community Revitalization Levy, which collects municipal property tax revenue above and beyond what the under-developed neighbourhood, where the arena will be built, currently generates; increased parking revenue; and reallocated subsidies already paid to the current, aging rink.
$125-million: From ticket tax. Over its 35-year span, the ticket tax will pay down the capital loan, with interest. Each year $1.5-million will be diverted to a major capital work (read: big repairs) fund.
$115-million: From private investment. From Daryl Katz’s Katz Group, paid as a lease over the course of the 35-year deal.
$100-million: Undetermined. Proponents hope it will come from the province, which has steadfastly refused any commitment. Funding could come indirectly through the creation of a lottery that funds NHL arena projects, or simply through the annual infrastructure transfers the province sends to cities each year (Edmonton received $167-million from the Municipal Sustainability Initiative for projects in 2012).
The rest of the project
$53-million: $28-million from the Katz Group, $25-million from the city. For a Winter Garden or indoor pedway over 104th Avenue, a major street connecting the arena district with shops and restaurants that are part of the complex.
$47-million: From the city. $25-million for land purchase (the city will retain ownership of the land and the arena); $15-million for a pedestrian corridor around the NHL rink, and for travel to and from the community rink next door; $7-million for a light-rail transit station.
$21-million: From the city, province and federal government – each contributing $7-million, if approved – for a community rink. City officials don’t expect a problem getting approval.