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Rendering of the proposed Markham Arena

Handout/BBB ARCHITECTS Toronto Inc.

As Markham city council postponed a vote Tuesday night about staying in partnership with controversial businessman Graeme Roustan in building an NHL-ready arena, there was more confusion about the scheme's financing.

Investment bank Canaccord Genuity insisted it is acting only as an advisor not an investor in Roustan's pledge to provide half of the Markham arena's estimated $325-million construction cost plus more than $30-million for an arena lease for a total investment of around $200-million. The Greater Toronto Area city is being asked to raise the other $162.5-million, with Mayor Frank Scarpitti and his fellow supporters of the arena promising this will come through property developers and other private sources, not the taxpayers. Given that the city will likely have to take out a loan to cover the construction costs up front, opponents to the proposed partnership with Roustan are skeptical to say the least.

A long line of speakers at Tuesday's meeting issued the same challenge to Scarpitti and Roustan: if this is such a good deal, then let the private sector do it. "If [Roustan] guaranteed a profit then he should guarantee to take the risks as well," said NHL player agent Anton Thun, a former Markham resident who has long opposed the plan.

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With 123 speakers on the agenda and 48 left by late Tuesday night, Markham council decided to defer a vote until Wednesday night.

The role of Canaccord Genuity which has an office in Toronto, and New York-based investment bank Jefferies LLC has never been fully explained by Roustan. They entered the picture in the summer when developer Rudy Bratty withdrew from funding the company Roustan formed to shepherd the arena project, GTA Sports and Entertainment.

Roustan was asked Monday by The Globe and Mail who was supporting GTA Sports, since it does not have any visible sources of revenue. Through a spokesman, Roustan said it was Canaccord and Jefferies.

The role of Canaccord and Jefferies was also the subject of an ambiguously worded press release from GTA Sports as well as statements on the GTA Centre web site. The press release said that, "Two leading investment banking firms, Wall Street firm Jefferies LLC and Bay Street firm Canaccord Genuity have joined the GTA Centre team to support this new option."

On GTACentre.ca, the company claims "the new financial framework option is supported by two leading investment banking firms, Wall Street's Jeffries LLC and Bay Street's Canaccord Genuity."

It also seems that Mayor Scarpitti is under the impression Canaccord and Jefferies are doing a lot more than simply advising Roustan on how to raise nearly $200-million. In a column he wrote for the Markham Economist and Sun, Scarpitti noted, "The arena is an amazing opportunity. There's no other municipality in Canada receiving $162.5 million in private sector funds, financed by Wall Street and Bay Street firms, to build a 20,000 seat, state-of-the-art arena that our city will own. The private sector clearly sees the market potential."

Add a dash of Twitter and suddenly Canaccord is investing in a $325-million arena project north of Toronto.

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The speculation started when Renaud Lavoie (@LavoieRenaud) of TVA in Quebec sent out a tweet to his almost 80,000 followers that "Canaccord and Jefferies LLC are ready to invest in the GTA Center in Markham. That way the city won't have to borrow $325M."

That's got to be a heart-stopper for any Canaccord shareholders who follow Lavoie. The investment banking and securities business is not so lucrative right now that firms have excess capital to be sticking into hockey arenas that don't yet exist, aimed at getting NHL franchises that have yet to be acquired. Naming rights jump to mind, also, but given that Jefferies and Canaccord are fierce competitors and sharing naming rights to an arena would make little sense – imagine the Air Canada-American Airlines Centre.

Canaccord moved quickly to point out it was only offering advice not capital. Where the money will come from has yet to be explained by the principals other than to say GTA Sports will promise to get it.

The ambiguous wording on the GTA Sports web site and press release is curious since Roustan has shown one of his chief concerns is that anyone making statements about him, his companies or his arena plans or his long list of failed business deals and civil court actions speaks carefully. He employs lawyers to warn people they could face legal action for libel or slander.

This happened again on Monday when a lawyer named Graham P.C. Gow from McCarthy Tétrault LLP wrote an e-mail message to Marilyn Ginsburg, a director of the Markham Citizens Coalition For Responsive Government, one of the groups opposed to the arena. Gow told Ginsburg McCarthy Tétrault would be monitoring MCCFRG's web site and the Markham council meeting Monday and Tuesday, where members of the group were expected to speak.

Gow told Ginsburg to "Please be aware that public statements by the MCCRG or its Directors that do harm to Mr. Roustan's reputation, whether or not they are a repetition of newspaper reports or other sources, may constitute libel or slander and give rise to serious legal consequences. We would ask that on your web site and in any public comments by your Directors the MCCRG adhere to standard practise and not pose open ended questions or make statements based on misinformation that are harmful to Mr. Roustan's reputation."

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