Markham council approves public funds for NHL-size arena

Markham City Councillors and residents pack city hall to vote on the construction of a new arena in the city, Tuesday, Jan. 29, 2013.

Markham is one step closer to building an NHL-size arena, after its city council narrowly voted to go ahead with plans to use public money to help build the facility.

In a 7-6 vote motion in the early hours of Wednesday, following hours of debate, council rejected a that sought to scrap the current cost-sharing arrangement between the city, GTA Sports and Entertainment and its financial backer, Remington Group.

That means the $325-million project moves ahead, with Markham taxpayers on the hook for half the cost of the complex.

Tuesday night’s meeting dragged on for eight hours. More than 60 people filled the council chambers as well as an overflow room to have their say on a motion submitted at an earlier meeting by Coun. Colin Campbell. That motion argued the deal was not in the best interest of the city.

When councillors finally voted shortly before 3 a.m., the motion was rejected.

Markham Mayor Frank Scarpitti, who is in favour of the arena, insists that no cash from the city’s budget will be used to fund the project, and that city services will not have to suffer to help pay the arena’s cost. Instead, development levies will be passed on to new home buyers within the city.

“We came up with a unique funding model. And I tell you, it’s an opportunity of a lifetime,“ Scarpitti told CTV Toronto before the meeting.

GTA Sports and Entertainment formally submitted a plan for the proposed 20,000-seat arena last August. At that time, the plan was for construction to begin before the end of 2012.

The aim of the arena is to lure a second NHL franchise to the GTA, widely considered the world’s biggest hockey market. But Tuesday night’s meeting was rife with questions about whether taxpayers should be supporting venues for what are essentially private corporations.

When Markham council first approved the cost-sharing deal last year, it appeared to have the public’s support. But that support had since eroded, over worries the arena could lose a lot of money if it doesn’t secure an NHL tenant.

Sports Business News' Howard Bloom says he’s confident a second NHL team is coming to southern Ontario one way or another.

“Paul Kelly, the former executive director of the NHL Players Association, spoke in Markham last night. Paul and I are on the same page: the National Hockey League is going to expand. You can take that to the bank,” he told CTV’s Canada AM Wednesday.

“They are going to add a second team to the GTA (Greater Toronto Area) and one in Quebec City.”

But Bloom believes the only way Canadian cities will ever see NHL expansion is if taxpayers get on board to build arenas.

“To make arenas work in today’s economic environment, it has to be a public taxpayer and a private solution,” he told CTV’s Canada AM Wednesday.

One can’t look at these facilities as economic engines, Bloom says, insisting it’s hard to make a good economic argument in their favour. Instead, he says it’s what they bring to a hockey-loving city that matters.

“We have to ask: Is it important to Canadians and the life we live to have NHL teams in those cities? If that’s the way we look at it, it makes sense,” he says.