The $325-million Markham, Ont., arena project promoted by Graeme Roustan is still alive.
Roustan, the former chairman of Bauer Performance Sports, saw the financing plan for a second NHL-size arena for the Greater Toronto Area, which is financially backed by developer Rudy Bratty, survive by a 7-6 margin in a vote by Markham city council. The vote came close to 3 a.m. Wednesday as the council meeting neared the eight-hour mark.
The financial plan would see Markham borrow the $325-million cost of the arena with the private partners covering half of that. The city would then pay back its $162.5-million share through a "voluntary" levy on developers' new housing projects, parking revenue and surcharges on event tickets. But there is no guarantee the city will not be responsible for any losses.
Council actually approved the financing last spring by an 11-2 vote, but, in the face of growing opposition from taxpayers, a motion to kill the deal and halt all work on the arena was introduced for Tuesday's meeting.
"I never get discouraged," Roustan said after the deal survived. "Until someone says no, until there is a no-vote, I never get discouraged."
However, even though council also voted to proceed with the site plan for the project, the arena will not proceed unless the final agreement between Markham and the arena developers is approved by council. That agreement is still subject to negotiation.
Markham Mayor Frank Scarpitti, who backs Roustan's plan, tried to soothe fears the city could be stuck with the operating losses of the arena by announcing Global Spectrum Inc., the company Roustan says will manage the arena, will cover them. Scarpitti read a letter to council from a Global executive which said the company will cover any cost overruns "based on mutually acceptable terms and conditions." But no details of the conditions were given.
Scarpitti also hailed the fact Bratty and Remington will guarantee half of the $325-million loan for the arena rather than have the city responsible for the whole amount. "That is unprecedented across North America," the mayor said, adding that other large arena projects rely on taxpayers' money.
Opponents of the financing plan said taxpayers' money should not be used to finance an arena that will enrich private investors if an NHL team is landed. "Let those who will benefit most pay for it," said Markham resident Bil Trainor.
Ever since he started promoting this project, Roustan has been careful to say the arena can be successful without an NHL team despite evidence to the contrary. He has also said he and Bratty are not chasing a team. But that position evaporated quickly Tuesday night when former NHL Players' Association executive director Paul Kelly stepped forward to speak to council.
He acknowledged he was there on behalf of Roustan, although he said he was not being paid. All Kelly spoke about was the chance of landing an NHL team and he warned the Markham politicians "if you don't seize this opportunity to have an NHL team you will likely not get it again."
Kelly said something publicly that has long been said by many NHL governors behind the scenes: "From the moment I became executive director of the NHL Players' Association I heard of the long-term vision of the National Hockey League to expand from the present 30 to 32 teams." His implication was those two additional teams could be in the Greater Toronto Area and Quebec City.
Kelly's statements are certain to create a lot of discussion in those cities, not to mention NHL circles, because of his implication the expansion plans are an official NHL policy. However, NHL commissioner Gary Bettman has long been careful to keep such talk out of the minutes of governors' meetings and dismiss it as speculation.
In conclusion, Kelly said, "If you build it, they will come," referring to the NHL. However, he failed to mention Hamilton, which sits 100 kilometres southwest of Markham, built Copps Coliseum in 1985 in hopes of attracting an NHL team only to be spurned by the league. But more than one opponent told council Hamilton is still paying to operate Copps.
Councillor Colin Campbell noted Hamilton pays more than $3-million per year in subsidies to the Coliseum. He also said he was told the NHL will put teams in Seattle and Quebec City long before a second team is placed in the GTA.
Last weekend, a number of councillors met with former Montreal Canadiens owner George Gillett for an information session. Campbell said Gillett warned them even though the territorial rights granted to the Toronto Maple Leafs through the NHL constitution may not stand up to a legal challenge, the Leafs could tie up the matter in court for years at a cost of millions of dollars.
"We're not getting an NHL franchise any time soon," Councillor Jim Jones said.
What was not pointed out by most of the speakers in favour of the project touted by Roustan and Remington is that Markham councillors were only to decide if they should kill the financing plan for the arena, not the arena itself. Ironically, it took an executive from Bratty's company to do that along with one of the opponents to the financing.
Randy Pettigrew, senior vice-president of land development for The Remington Group Inc., told council "we're committed to this process." Pettigrew said earlier this week that even if the financing was voted down, he and Bratty would be willing to keep working on building an arena, possibly with a partner other than Roustan, as long as they thought it was a good deal for them as well. He repeated that Tuesday night.
Voting against the financing plan were deputy mayor Jack Heath and councillors Joe Li, Campbell, Don Hamilton, Valerie Burke and Jones. Supporters of Roustan's proposal were Scarpitti and councillors Gordon Landon, Howard Shore, Logan Kanapathi, Carolina Moretti, Alex Chiu and Alan Ho.
Karen Rea, a local real-estate agent who represents the Markham Village City Ratepayers Association, said the scare talk about losing the opportunity to build the arena and get an NHL team was just a tactic by Roustan's group to push its own plan.
"Absolutely," Rea said. "All we're doing is the motion to rescind the financial framework. The arena is not a dead issue."
Rea and other opponents said there is too much secrecy around the deal and that Markham residents were not adequately consulted about the entire project. There were also charges Scarpitti and the council have not done the proper due diligence on the promoters and the financing, nor did they put the project up for bids.
"The mayor is supposed to work for our best interest along with 12 other councillors, not run a one-man show," Rea said. "We should not be standing here fighting to keep Markham debt-free. Where do your loyalties stand – with Mr. Roustan or the taxpayers who elected you?