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Markham Citizens Coalition for Responsive Government


Excerpts from Articles in the Globe and Mail about the Markham Arena.

“Roustan insists securing a NHL franchise to play out of a new facility just north of Toronto that could provide an alternative to the established Toronto Maple Leafs is not something he will be seeking.

“Absolutely not,” he stated emphatically in a telephone interview Wednesday, when asked about his future plans for the proposed arena. “I have no expectations of having a professional sports franchise as a tenant in this building.”

Roustan said business proposals have led him to believe an arena in this location would be a financial success relying on upwards of 100 concert and other cultural events a year.

NHL deputy commissioner Bill Daly confirmed in an e-mail to The Globe and Mail that the league has spoken with Markham officials on the subject of the new arena proposal for the community.

Daly reiterated that in no way should the proposed development be dependent on an NHL franchise eventually landing there.

“If it doesn’t make sense to build it without an NHL tenant, then they shouldn’t build it,” Daly wrote. “And that’s what we told them.” “

The Globe and Mail 11/23/2011 – A new NHL-ready arena in the GTA?

“Roustan has been careful to say he and his partners, who include real-estate tycoon Rudy Bratty, are not planning to land an NHL franchise, just compete for concerts and other events with the Toronto Maple Leafs’ Air Canada Centre in downtown Toronto.

Markham Mayor Frank Scarpitti, who has said the arena is council’s “priority No. 1,” could not be immediately reached for comment.

NHL commissioner Gary Bettman has said several times that Roustan and his partners were told not to proceed with the idea a second NHL franchise for the GTA would follow the building of the arena.”

The Globe and Mail 04/18/2012 – Markham’s NHL-ready arena could get green light next week

“Graeme Roustan made his pitch for a 20,000-seat arena in the Greater Toronto Area on Thursday to a group of councillors for the Town of Markham.

He told the councillors the plan is to build it without public money.

“We think this is an exceptional opportunity for Markham because the construction of this facility will not rely on taxpayers,” Roustan said in a press release. “This venue will be fully supported by private investors and the local development community without any municipal, provincial or federal contributions.” “

The Globe and Mail 04/19/2012 – Roustan makes pitch for Markham arena

“The Markham arena is planned for a six-acre parcel of land near Highway 407 and Kennedy Road. Roustan hopes to see it open in 2014 and play host to the 2015 world junior hockey championship.

Councillors for the City of Markham approved an arrangement under which the municipality will borrow the $325-million needed to build the arena. GTA Sports & Entertainment, the private company formed by Roustan to build and operate the arena, will pay back half of cost of the city’s loan with the other half coming from revenue from the arena and entertainment centre after it opens and from future development in Markham.

Most banking and hockey experts say the arena will not be profitable unless it lands a major tenant such as a second NHL franchise for the Greater Toronto Area. However, while Markham politicians have said they met with NHL commissioner Gary Bettman about the possibility, Roustan has been careful to say a franchise is not part of his plan.

While some NHL governors would like to see a second team in the Toronto area, Bettman has said repeatedly there are no plans either to move an existing team or grant an expansion franchise for the region.”

The Globe and Mail 08/08/2012 – Builders of Markham arena look familiar

“Graeme Roustan is convinced he can build a 20,000-seat arena in the suburbs northeast of Toronto and make it profitable without an NHL team as a major tenant.

A lot of skeptics are just as convinced he cannot. Among them are taxpayers in Markham, Ont., who wonder about the promises from local politicians, and from Roustan and his partner, real-estate tycoon Rudy Bratty, that the cost of the $325-million project will not come out of their pockets.

Also doubtful are NHL executives, and those familiar with the operations of the Air Canada Centre, one of North America’s busiest arenas some 32 kilometres south in downtown Toronto.”

The Globe and Mail 08/19/2012 – Markham arena developer defends economic Model

 “Roustan, the former chairman of Bauer Performance Sports Ltd., is promoting the $325-million, 20,000-seat arena with the financial backing of prominent developer Rudy Bratty through his company The Remington Group Inc. However, a senior Remington executive distanced the company from Roustan in the wake of questions about a string of his previous business dealings in the arena business in the United States, two of which resulted in civil judgments on grounds of fraud against either Roustan or a company he was associated with.

Roustan, the former chairman of Bauer Performance Sports Ltd., is promoting the $325-million, 20,000-seat arena with the financial backing of prominent developer Rudy Bratty through his company The Remington Group Inc. However, a senior Remington executive distanced the company from Roustan in the wake of questions about a string of his previous business dealings in the arena business in the United States, two of which resulted in civil judgments on grounds of fraud against either Roustan or a company he was associated with.

“So of all the hundreds of transactions I’ve been involved in there are a couple that stink and they stink.”

“But hopefully when people who do background checks look at things, they go, ‘He didn’t kill anybody, there’s no criminal stuff there, there’s a couple civil things. It is what it is.”

Scarpitti is lobbying hard with his fellow councillors to get the financing plan approved and is an enthusiastic backer of Roustan.”

The Globe and Mail 01/27/2013 – Veto of Markham financing plan may torpedo arenas private partner

“On the surface, Markham city council is to vote Tuesday night to approve or rescind the financing plan for a $325-million arena that will serve the Greater Toronto Area.

But if the arena fails, which could happen without a major tenant such as an NHL team, the taxpayers could be stuck with the cost.

In addition to the motion about financing, council will be asked to conduct due diligence on the arena promoters, a motion made by councillor Jim Jones after questions about Roustan’s business dealings came up last fall.

Given what is at stake, it is not surprising Roustan reacts aggressively to criticism, usually through a letter from one of his lawyers warning of legal action. Jones received such a letter, as did The Globe and Mail, and so did Anton Thun, a prominent NHL player agent who lives in Markham.

Thun heard from Roustan’s lawyer after he sent an e-mail to Markham Mayor Frank Scarpitti and the councillors about Roustan’s claims he was a finalist to buy the Montreal Canadiens. Thun said former Habs owner George Gillett was willing to come to Markham to refute that claim. Gillett eventually met with some Markham councillors last weekend along with Bratty and his message was it is not a good idea to build the arena unless you have an NHL team.

In addition to hearing from Roustan’s lawyer, Thun said he also received a call from an NHLPA lawyer asking if he had a financial interest in the Markham arena situation. The implication was a potential conflict of interest. Thun said he does not have any financial motives, just the desire to see the city avoid a bad deal. He also believes the call from the NHLPA lawyer “was no coincidence.”

Thun has his doubts about Roustan as well as the financing plan. “I have no confidence in his ability as a businessman,” Thun said.”

The Globe and Mail 01/28/2013 – Markham city council set to vote on arena financing plan

“Ultimately, developers could gamble and move forward without any direct assurances from the NHL that they will necessarily be first in line for an expansion franchise, even if they had an appropriate facility to house it.

It may well be that the NHL will want the team to play downtown as a tenant in the Air Canada Centre. There is a precedent for that in the NBA, where three teams play out of the Staples Center in Los Angeles, two basketball (Lakers and Clippers) and one hockey (Kings).

So from Markham’s perspective, building a new arena is not the same thing as automatically getting the NHL nod of approval, when it is finally ready to grant Toronto a second team.

So the caveat needs to be expressed: For Markham, it’s not buyer beware necessarily, but builder beware.

New arena or not, if the NHL doesn’t like the look of your balance sheet – or if an ownership group more to its liking happens to come along when the expansion dream gets closer to reality – then Markham could be left with a white elephant on its hands.

Predicting that a second NHL team will eventually land in Toronto is the easy part. Predicting where it lands, and who gets to own it? Far more complex.”

The Globe and Mail 01/30/2013 – White-elephant alert to Markham and arena developers

 “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.

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.

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.”

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………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?” “

The Globe and Mail 01/30/2013 – Markham city council backs financing plan for NHL-size arena

 

The cost of building the Markham Arena – $ 725 million

For the rink:

                               $162.5 million: From private investors

                               $162.5 million: From the city.

The rest of the project:
                               $200   million:  From the city, to realign Highway 407.
                               $100   million:  From the city, for a new parking structure.


                     $80 to $100   million:  From the city, for local road improvements.

                  Total :     $725   million                                                       

“The arena is part of a bigger project Markham wants to develop at the intersection of Highway 407 and Kennedy Road which will include an amateur sports high-performance centre, a university campus, a hotel, office space, high-density housing, a performing-arts centre and retail shops. These costs are estimated to be as much as $400-million on top of the arena.”

The plan is for the city to own the arena and declare it a municipal capital facility like a municipal community centre which would exempt it from development charges and property taxes.
“While the city estimates the arena will bring in $61-million a year to the local economy, the Markham Village City Ratepayers Association estimates the city will forfeit as much as $162.5 million in revenue over the next 20 years (a $100 million loss on 20 years’ worth of property taxes; $42.5 million from lack of HST payments; $20 million in uncollected development charges).”

While this article is called A Tale of Two Arenas (Markham and Edmonton), only information from the Markham Arena has been extracted.

The Globe and Mail 02/01/2013 – A tale of two arenas