Hamilton Approves Investigating Compromise Sites on CFLdb

Hamilton Approves Investigating Compromise Sites

Published on September 1, 2010 10:03 PM by dbo.

After an approximate three week cooling off period Hamilton city council responded to a olive branch offered by Bob Young in the form of support of a new site at Aberdeen and Longwood Avenues. The response was a vote to proceed with investigating the viability of the Longwood site and other mutually-agreeable sites with the Tiger-Cats and other parties to try to come to a common understanding on a location and plan. The city has until Sept. 14 to complete these negotiations and decide on a site.

The vote does not put the stadium issue to rest once and for all. Much due diligence on a new site is required and the MIP Longwood site includes acquiring the land necessary for the stadium. If the university decided a football/soccer stadium in their research park was not appropriate, other locations on the list would be next. If no agreement can be made on another alternative, the city would be left with their second track of West Harbour. Without a tenant at that location the PanAm HostCo would likely only fund the construction of a 5-7,000 seat stadium if the facility was left in Hamilton at all and it was still desired.

How did they get here?

When we left off, Bob Young had pulled his funding contributions for an East Mountain location off the table before council’s vote. Council then, as expected, endorsed the West Harbour location without an anchor tenant committed.

In the days after the decision, the mayor and Bob Young did the rounds to get their position out. Speculation ran rampant as to the Ti-Cats end-game with plenty of claims that Bob Young was playing the situation by the book. The media fuelled the thoughts the Tiger-Cats were going to relocate within the region and Oshawa had an council candidate make an unrealistic proposal to investigate nabbing the Cats but saner heads prevailed.

Hamilton native and Argo Bryan Crawford found thinking about Hamilton without the Tiger-Cats hard to do. TSN analyst Glen Suitor saw council’s West Harbour endorsement vote as a statement that the Tiger-Cats are not important to Hamilton and an insult to all Bob Young has done for Hamilton in the past seven years.

Councillors may have started to see the consequences of their decision when negotiations with HostCo revealed only a 5,000 to 7,000 seat stadium was required for Pan-Am soccer without a legacy tenant. Combined with earlier revelations that Mayor Eisenberger failed to share with council a conversation with the premier in which he offered additional assistance if the stadium was located at East Mountain, reality started to seep in. A call for for an emergency meeting never materialized, but the new proposed location began gaining steam and Ti-Cat fans rallied for their team.

The final contribution may have been the city report stating the West Harbour stadium would cost the city $2.3 million per year to operate without a CFL or soccer tenant.

In the end Bob Young extended his hand and the mayor took it. Council was wise enough to take one final opportunity and an extended deadline to investigate putting a deal together that involved their football partners.

Where is his new location anyway?

Located in McMaster Innovation Park, the site is to the south-west of the West Harbour location, near the Chedoke Expressway.

View interactive map

Who is funding it?

The exact details of the funding of the stadium are unknown since the site is still be determined and the Ti-Cats have not stated their commitment. They previously committed $15 million towards stadium construction initially plus costs to pave up to 7,000 parking spots for the East Mountain location.

The other financial commitments are:

$60 million from the Hamilton Future Fund ($45 million for the stadium, $5 million for the velodrome plus $10 million in land acquisition costs)
56% of the cost of a 15,000 seat stadium from PanAm HostCo (funding from senior level of governments)

PanAm quality construction costs for a 15,000 seat stadium have been estimated at $116 million ($102 million in 2008 dollars) for the West Harbour site. The $45 Future Fund contribution is based on 44% of $102 million. No estimates have been obtained yet on building a larger (25,000 seat) and CFL quality stadium.

Stadium Challenges and Fallacies

The stadium debate has been heralded as the solution to many problems in Hamilton — revitalize downtown/west harbour, put the Tiger-Cats on solid financial footing, expand the economy — and decried as the cause of many problems — high taxes, wasteful spending, the abandonment of Ivor Wynne Stadium. The truth is there are no certainties and an agreement on a stadium still poses risk while some things just have to change.

Stadium as Revitalization

The belief that constructing this stadium was to magically revitalize the economy of the harbour area and tie into Hamilton’s downtown is simply without basis. Those that name other cities whose harbour or lake front stadiums were constructed for those purposes gloss over the the other facets which contribute to the revitalization efforts, the differences in the stadiums (baseball vs football) and cities and their actual success.

The revitalization actually comes from the other development that surrounds the stadium. Restaurants, pubs, theatres and shops will not spring up naturally around a stadium once it is built, especially in dilapidated and brown field areas. The city must encourage this development with rezoning and tax advantages for developers. Sad as it may seem, capitalists don’t take risks on new development to increase the city’s tax base and a city’s vision without something in it for themselves (profit).

Ti-Cat Loss Claims are Unbelievable

Bob Young and the Tiger-Cat organization have taken a lot of abuse during this debate with many calling out Mr. Young’s business acumen for his claims of losing $30 million in seven years on the team. Calls have been made for the franchise to throw open their books and prove their claims. The smug have offered to take over management of the team in order to return it to profitability. I don’t doubt the loss claims but do question the economic ignorance of some citizens.

When Bob Young bought the Tiger-Cat franchise in late 2003 he would have had little revenue against the expenses for the remainder of the year. In addition he spruced up the stadium and added a $2 million video scoreboard. Though attendance rebounded in 2004 through 2006, it declined to the 20,000 to 23,000 range in 2007 to 2009. The Winnipeg Blue Bombers had an operating loss of over $100,000 in 2009 on attendance of over 25,000 as a community owned team with additional revenue opportunities. I would expect Hamilton’s corporate support to be weaker than the league average and the average ticket price lower as well. Therefore, $30 million is not out of the realm of possibility. I believe the losses will total up from all Bob Young has put into the team whether fans believe it should be excluded as part of his philanthropy or not.

New Stadium ≠ Ti-Cats Profitable Forever

A new stadium is no guarantee of a perpetual sea of black for the Tiger-Cats. That is why Bob Young wasn’t interested in just putting the stadium anywhere and watching the people come through the turnstiles, the ticket prices increase and the profits roll in. There is a plan in addition to the new stadium to put the team in a position where ownership interest will not be lacking. There is no guarantee of the plan’s success, but it is a start towards correcting the issues. Some of the success of the Ti-Cats lies with the acceptance of changes a new stadium will bring, and not just in the location.

The Tiger-Cats plan to stabilize the financial footing of the club consists of expanding their fan base outside of Hamilton proper, increasing their season ticket sales (and attendance overall) and increasing ticket prices. The stadium location helps in their efforts to expand regionally, but also assists in increasing ticket sales (with the team’s performance and marketing key here) and ticket prices. A new stadium also provides other revenue streams, such as taking over stadium management, parking and more corporate suites and special amenities. The risk comes from whether Hamiltonians and fans from the region are willing to pay more to attend a game in a better facility and whether the team can attract more fans, maintaining a good average through bad years. If the blue-collar fan base of Hamilton decide they do not want pay more for the same entertainment, the experiment may be a bust.

There is no doubt in my mind that enough Tiger-Cat fans exist in southern Ontario for the team to be viable. Of the search terms used on CFLdb, blackouts is popular with Hamilton fans contributing to a large percentage of those queries. The goal is, therefore, to translate those fans at home to come to the park. Building demand with a reduced supply of tickets can help, but also changing attitudes of fans, and a better stadium experience can help attract repeat visits. There are no guarantees, but you have to believe the research the Ti-Cats have put into the stadium location question indicates an increase in interest if the travel and game experience are improved.

Ivor Wynne Stadium Should be Saved

The movement to drop any pursuit of a new stadium in order to revitalize Ivor Wynne Stadium are noble for nostalgic reasons, but lack any basis in fiscal reality to ensure the long-term viability of the club. Even with a blank cheque to demolish the stadium and rebuild from scratch the location does not provide for the needs of a modern sports team. Without expropriating additional land, increasing parking and access and changing the whole neighbourhood the current site cannot offer the Ti-Cats what they need. If you were to rebuild the stadium, expand the site and streets you would be destroying what the Ivor Wynne supporters hold dear, the cozy confines of the stadium in the community.

Unfortunately Ivor Wynne’s time has passed by. It was successful in the years when it could be filled from fans in the core of Hamilton. Now fans needed to attend a game are the same in number but are drawn from much farther distances. This requires a location that recognizes this fact. A new stadium will also bring additional comfort and amenities to fans while losing the quirks of the old stadium. This trade-off is part of progress. Putting money into Ivor Wynne, no matter how much, will not prevent the team from having to leave within a decade.

The End

Stadiums are a complex issue and I get much of the debate and positions taken. I do not understand how the debate took this long, with a location not decided and details lacking because the conflict has been over issues of “principal”, or political ideologies. Since politicians never compromise on issues of this nature, they were doomed to be backed into a corner. A logical person would have found a compromise to address all what was trying to be accomplished. The private party in this regard took the wrong approach in trying to steer people towards their proposal. I think focusing on the details of West Harbour would have made the shortfalls more clear and helped their cause. If the location is resolved in the next 14 days the delays have cost time in working on the details of the stadium design and funding to reach the necessary seating, surrounding development and other private partnerships, all just as critical to the project as the location.

I still have hope for a successful resolution and the Ti-Cats moving into their new home somewhere in 2014. That is what all parties want from this project, something good for Hamilton.