Regarding Halifax Expansion

Published on December 30, 2017 6:15 PM by dbo.

A major development on the Halifax expansion front came out of nowhere in November. Not news that the CFL was interested in expansion, nor news Halifax was willing to build a stadium, but that there were credible owners with a professional, enthusiastic and impressive proposal presented to the board of governors. Credible owners are the catalyst needed for CFL expansion anywhere, and provide Halifax with local ties to drive the process forward. Here is a rundown of the details and some thoughts on the detractors and what really needs to be figured out.

Announcement

In November, TSN reported that a group had made an October presentation to the CFL‘s board of governors on placing a franchise in Halifax, and the story was confirmed by the league. The presentation precipitated meetings with various levels of government in Nova Scotia, including CFL commissioner Randy Ambrosie meeting with Halifax city council in camera. The potential ownership group took away information from these meetings on the requirements for an expansion franchise in order to negotiate a stadium plan and develop a final application for a conditional franchise. While supportive of a bringing a CFL team to the region, Halifax mayor Mike Savage reiterated a stadium was not a capital priority for the city. The group’s aggressive timeline was for a conditional franchise to be awarded early in 2018 for a team to begin play in 2020 at a new Halifax stadium.

The revelation provides the critical catalyst the CFL has been lacking in the maritimes since the failed 1982 franchise bid. Those known in the group spearheading the initiative, described as “credible”, are Anthony LeBlanc, with ties to New Brunswick and sports management experience with the Phoenix Coyotes, Bruce Bowser, Halifax native and president of AMJ Campbell Van Lines, and Gary Drummond of Regina, former president of Hockey Operations for the Phoenix Coyotes.

The initial response in Halifax to the news was reserved interest.

Floating the Idea

(The following is some background information including some stories I haven’t linked to that I want to save for posterity).

The Touchdown Atlantic initiative started the discussions around what was required to develop a location for a franchise, whether in the Maritimes or elsewhere. In 2011, the Conference Board of Canada stated five new markets could support a CFL team (the league has since returned to Ottawa which was sixth on the list). Moncton was placed ahead of Halifax in their evaluation. Warnings were made about being realistic about the viability of a Moncton/Maritime team. Claims were made that CFL expansion would be an economic fumble for any location capable of sustaining a team. Even so, the study piqued interest in other communities like Waterloo. After the 2013 and the last Touchdown Atlantic in Moncton, talk over Maritime expansion dwindled.

Recent Halifax Developments

Football was out of the picture in terms of community and business leadership in Halifax, when in early 2017 a proposal from Sports & Entertainment Atlantic for a small “pop-up” soccer stadium to be built on the downtown Wanderer Grounds. The play was to develop a Canadian Premier League soccer franchise to play at the stadium. A modular stadium was to allow for easy “right-sizing” of the stadium based on interest. After establishment of a team, development of a larger stadium concept could be pursued with the province and city. The initial stadium would be funded without the use of public funds. The proposal for a temporary 7,000-seat stadium went to local council in April, and was approved in June. By July, however, the plan was stalled, delaying conditions needed to apply for a franchise. Since then, there has been no advancement on the soccer stadium I am aware of.

While there was some opposition to the group over restricting public access to the land, the council swept those aside with restrictions and annual reviews. Faced with no request for public funds, it was hard for council to reject the proposal. It appeared Canadian football was out-maneuvered by its cousin soccer.

Progress

Next reported were four preferred locations for a football stadium being examined by the potential ownership group. They include Shannon Park, Bayers Lake business park, Dartmouth Crossing and a downtown location.

At the Grey Cup, the principles state their market research confirms fan and corporate support similar to other CFL centres, while the Atlantic Schooner Fan Club president explained his optimism.

In December, the group associated with the potential franchise were reported to register the trademark on the Atlantic Schooners name to a numbered company associated with them. Commissioner Ambrosie spoke about being optimistic about Halifax in a conversation on Halifax radio. An update with the parties involved revealed additional info on their plans and perspective regarding the franchise, speculation on the stadium formula and wonders on the expansion fees, draft and other cities as potential franchise sites while musing on the specialness of a tenth franchise in Atlantic Canada to grow the league coast-to-coast.

Update Dec. 31st, 2017–Jan. 8th, 2018: Positive views for support in the region and filling a stadium, except from those with skin in the game for it to fail. A guest post from Regina explains the Roughrider regional support and community-owned structure (surprised to read a reference to gate equalization, I had to check the byline. Kudos to Davis for mentioning this piece of history many like to bury). Former CFL players with ties to the maritimes support a CFL team in Halifax, but go off the rails when they try to explain the CFL‘s place, history and fan support in Halifax. A public-private partnership to create a stadium for Halifax is explored with Ottawa’s model used for comparison, as the franchise hinges on a suitable stadium. As for a name, maybe it isn’t Schooners, but Atlantic or Maritime seem to be a shoe-in for the location.

Update Jan. 10th–Jan. 13, 2018: Everyone wants answers, but the parties start with questions and look for answers; the details will be determined in good time as the process unfolds. Meanwhile, Halifax wakes up to the fact the franchise will hinge on fan support, not anything else. While all wait on a stadium plan and conditional franchise approval, enthusiasm and excitement fills the league on what a new team would deliver. Posing the question should government money be spent on a stadium, the headline writer gets it wrong; a stadium must come first before Halifax will be granted a franchise. In a detailed interview with Anthony LeBlanc, he explains how the group got involved with a Halifax expansion franchise bid/stadium project, outlines timelines with best-case/worse case launch dates and remains vague on details of any proposal to the city and province. Experience with the Coyotes has provided the lessons learned to be successful with the CFL. Evaluating other projects in Nova Scotia, there is little in public infrastructure projects on the horizon, but a stadium has no priority in many minds.

Update Jan. 27th, 2018: With the launch of the CFL in Halifax site, (The previous sentence and link is reference to a fan site not associated with the prospective ownership group). The prospective owners are checked in on for a status update. The seriousness of their intent is made clear with strong statements on talking to potential sponsors, developing more private investment for the stadium than other recent projects in Canada, and the hint of a forthcoming naming contest and season ticket drive starting soon.

Update Jan. 29th, 2018: I incorrectly indicated in the Jan. 27th update above that the CFL in Halifax site was associated with the ownership group wishing to bring CFL football to Halifax. This is incorrect, it is a fan site not associated with the official group. I did not properly verify the site ownership even though I had suspicions. I regret the error and apologize to readers of this article who were misled.

Update Feb. 4th, 2018: A poll released Feb. 1st shows a very strong base for team support despite the analysis. Demographic breakdowns for questions are provided, but except for the question of public funds for a stadium (whose funding plan hasn’t been announced), a majority isn’t required. As for support levels, a majority of persons buying season tickets isn’t required either. Taking the low figure for margin of error, 12% state they would be likely to buy season tickets. For the Halifax region population of 400,000, this equates to 48,000 season ticket holders. This is positive, and even with an additional 50% error rate for those who renege on the question, or balk when they see the pricing, etc. it still would provide 24,000 season ticket holders, a very healthy number for a CFL franchise to launch. This certainly buoys a prospective ownership group who will be accepting non-refundable season-ticket deposits at some point to gauge real interest. A prospective bakery wouldn’t require 80% of respondents to indicate they would buy from the bakery each week to have a successful business plan, so comments of a divided population over anything that isn’t affecting public policy is fallacious.

The positions are polarized already, but it is interesting to see how each thinks. The anti-stadium/team position makes statements with no supporting references. Some can read through the misrepresentation, exaggeration, blanket dismissing and predictions for failure, but the intent is to convince the uninformed that these are facts, not opinions . The pro-stadium/team position is supportive of the possibilities and using such an opportunity as a catalyst. No facts are required, but an appeal for a vision to be pursued by leadership rather than take a “can’t do” attitude. Once details are known, they will be willing to judge based on location, funding, size of vision and other factors.

Debate

No news about potential CFL interest in the maritimes (or anywhere) would go without follow-on opinions from doubters, opposers and cranks. Let’s start by agreeing on the questions that need to be answered, namely the stadium, support and financial capabilities (both of the owners and the business community). Believing any or all of these are the weak link in the proposal is acceptable, and one can make a case for that by providing details on how they cannot be met. Instead, we get speculation from “experts” with no actual knowledge of the current conditions that they are speaking to.

First to jump on board was the Globe and Mail with a hastily developed story on the hurdles to overcome before a team can take the field with some expert quotes to make the case. Moshe Lander, like in all the stories he is quoted in, shows very little understanding of the CFL or business, which explains why he is an academic.

Outside Halifax, some say sure to a Halifax franchise, but in time, a long time. Another evaluation is that solving the stadium riddle is the only obstacle. Some closer to the situation see support in the region and potential creativity as the solution to financing infrastructure. Others don’t debate, details to be worked out later, just build it. Many, not worth linking to, trot out all the old opinions — we can’t support a team, who wants the CFL anyway, players are doped up, a stadium will bankrupt the city, we have other priorities, we couldn’t do it 35 years ago, how can we think we can now and more. So many advising the status quo, but wishing for different results.

All For One

Support from existing franchises to share information to develop the business model differs from “you’re on your own” attitudes of the past. Locals make the case for the positive aspects of a Halifax-based football team look to change the attitudes impressed on the community.

What is hard to explain is the CFL supporters across the country with negative comments about the practicality, possibility or acceptability of Halifax as a franchise site. More muted than 35 years ago, when the attitude was largely laughter to the announcement of Halifax getting a team, especially in the west, but it is still present. It comes from persons unwilling to accept change, allow new members to their club, and be positive about anything (always oppose and predict failure, unaware that all success is built on failure).

The Stadium Play

I feel the only real question to a conditional franchise being granted is a framework plan for a stadium in place. While the general approach of mimicking the Ottawa Lansdowne revitalization with commercial and residential development is sound, the details of what that means to the private and public funding is what really matters.

I don’t have the answers to predict the future. There is a chance the franchise plans are scuttled again over the stadium. There is also a chance the stadium gets built, clearing the way for the franchise. I believe the odds currently are somewhere slightly greater than 50%, and I can readjust those once more details of the group’s proposal becomes known in 2018. Based on experience in other jurisdictions, a 2021 or 2022 fielding of a team is more realistic in my eyes, but the ownership group may not have that much patience.

A cost estimate of $225 million for a 25,000 seat stadium is a good conservative starting point. A stadium substantially above this cost and seating becomes harder to fund. The design would to make expansion (either temporary or permanent) workable to protect the investment and hosting the national Grey Cup championship. Multi-purpose means football, soccer, any other large field sports and other events like concerts. The more attractions that can be developed for the stadium, the more it benefits the surrounding area. A stadium also provides a venue necessary for hosting large national and international tournaments and games.

Building the stadium in phases or in a modular fashion can help spread out the initial capital cost, while temporary seating is used to meet demand. This does not appear to be in the plans of a forthcoming stadium proposal.

While the mayor has indicated a proposal which generates tax revenues to offset any public contribution would be acceptable to him. Based on a $225 million price tag, my rough calculation based on other projects is a minimum of $550 million in new development to have net zero revenue in/expenditure out for the city. The city could also be asked to contribute above net zero in the form of land, tax breaks or a straight contribution to join a private/public partnership.

Federal money for infrastructure has been mentioned. If available, I can’t see this being used for anything except roads, sewers and the like. While it may help with access to the stadium site or other needs, it doesn’t go against the core development of the stadium site and area.

Provincial money is possible, though any amount will be highly protested, even if it does bring $500 million in construction to Halifax. I would expect any request to the province would be in the 10-20% range of the stadium cost. This could be sold as a loan or shown to be paid back through taxes from the economic activity and job creation. While there are calls for the team to be regional, asking New Brunswick or PEI for money for a stadium in Halifax will get you laughed out of the room. Unless the team can offer a game a year in Moncton in exchange, regional money won’t come, and if it does, how much could it be — $500,000 for five games?

The ownership group might make a small capital contribution to the stadium for the private/public partnership. Additional cost sharing from the users would likely be presented as a ticket surcharge, though the city and/or province would have to front the money for the cost and be repaid over time. A $2/ticket surcharge generates $500,000/year for a sold out stadium, plus what ever other events are held there. In 10 years, the loanees could expect $5 to $10 million paid back in this way.

So first glance, it appears the vast majority (up to 80% or more) of the stadium cost would need to be offset by other development. The owners are proceeding with developing their cost proposal to the city and province along with the economic impact of the stadium. I expect a creative proposal with additional development that pays for the stadium a la Ottawa’s Lansdowne Live, and an proposal to manage the stadium in exchange for covering operating costs (while paying rent to go towards the operating budget).

It is unfortunate that in the last century much public money was used to build public use structures across Canada, especially federal money to Canada’s big centres, and the neglected maritimes received none. Now that well has dried up federally, and Atlantic Canada misses out on the power of public funding due to their small size. This is where a contribution from the CFL that I’ve advocated for would show a commitment to a new partner city. Unfortunately, the capitalism that runs business prevails, and getting facilities built with public money is the standard, and token gestures are not needed, even if the league’s members are the ultimate benefactors of expansion and reap the rewards of TV growth, expansion fees and increased sponsors (even when anything they contribute comes from the fans across the country).

For once, it would be nice for a community to discuss the facts, evaluate the risks, costs and benefits and make a decision. With a small group posed to make a major decision, I expect much opposition based on fear, misinformation, and “can’t do” attitude. It works, so why stick to facts and possibilities?

Supporters just want to know where will the stadium be and when will the team take the field? Right now there are no answers, but many possibilities. It will become clear when the ownership group makes their presentation to government officials. At that time, with numbers on the table, we can examine whether they are realistic and debate their merits.

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Regarding Halifax Expansion was published on December 30, 2017 6:15 PM by dbo.

3,064 words.

This article is categorized under Franchises and tagged with expansion and halifax.