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Toronto Star Articles on the Proposed Markham Arena: Excerpts

“A key element of Markham’s financial plan to pay for half of its $325 million arena project could be resting on thin ice.

A significant component of the city’s plan to cover its $162.5 million share of the NHL-size facility relies on developers paying a “special levy” to help pay for the 20,000-seat arena — a contribution that would be in addition to development charges already required to pay to build in this booming city.

Critics fear the voluntary nature of the levy means it can’t be enforced and that failing to follow the mandated process could open it to a legal challenge from developers.

And if a developer were to win in court it could put the arena debt on the backs of Markham taxpayers.”

The TorontoStar  08/30/2012 – Critics say Markham arena financing may put taxpayers at risk

 “Markham’s ambitious plan for a $325-million, NHL-size arena faces trouble after Deputy Mayor Jack Heath joined a growing number of councillors opposing the project’s funding formula.

Heath, who has backed the project since its inception more than two years ago, stunned the city on Thursday by announcing council should cancel the arena’s current “financial framework” and not provide any public funding.

“The proposed financial framework has become extremely controversial in our community,” Heath said in a statement. “I believe that discussions on it should be discontinued.

Heath, a 15-year council veteran, follows councillors Jim Jones and Joe Li, the city’s biggest opponents of public funding for the project because of the possible risk to taxpayers. The two councillors, who are members of York Regional Council with Heath, have also criticized a lack of transparency in the approval process that has infuriated some taxpayers.”

The Toronto Star 11/01/2012 – Markham’s NHL-size arena project losing support

“Councillors Jim Jones and Don Hamilton have confirmed they will ask council within the next two weeks to probe the background of Graeme Roustan, president of GTA Centre LP, the proposed builders and operators of a $325-million arena near Hwy 407 and Kennedy Rd.

The Star reported last month that a Texas civil court found in 2009 that Roustan committed statutory fraud in an arena deal. He has appealed to the state’s Supreme Court.

He provided financial advice to wealthy investors during the 1990s before developing a business that managed and provided ice-making equipment to arenas, primarily in the United States. But several former partners and customers have criticized his business practices in interviews with the Star.

Earlier this year, Roustan told Markham council and residents that he was “a finalist” in the auction of the iconic Montreal Canadiens in 2009. But a source familiar with the sale said he never made the top four suitors or submitted a formal bid.”

The Toronto Star 11/04/2012 – Councillors seek probe of promoter in Markham’s proposed NHL-size arena

“Markham taxpayers are furious about a survey the city approved to be sent out to assess public support of the controversial arena project.

After months of debate, discussion and numerous public meetings on the controversial NHL-size arena project in Markham, a select number of residents received an email survey this week on the $325-million project masked as a “consumer goods” questionnaire.

The city refused the Star’s requests to see the survey nor would they confirm the questions. The polling company Delvinia refused to comment on the survey.

Councillors say they never signed off on the survey, and only found out about it when residents asked them about it.”

The Toronto Star 12/06/2012 – Arena survey ruffles feathers in Markham

“The concerns are mounting and so are the questions.

Councillors in Markham say they need many more answers and more input from the public before they can approve the proposed $325-million NHL-size arena with a “clear conscience.”

“I have a lot of concerns,” said Councillor Valerie Burke. “With everything else we discuss in council, we are given very detailed reports. But with this we have just been given a very rosy picture. We are not being given all the details of the deal.”

“Why is the municipality involved in this? If it’s such a great project, why isn’t the private sector all over it?” she asked.

Don Hamilton, councillor for the ward where the arena will be built, said he has spent all week answering questions from residents who read the Star series on the arena published over the weekend.

“If I had to vote today, I would say no,” said Hamilton. “There is too much mystery, too much unknown and too much uncertainty, and the public is exposed to too much risk. It’s just too dangerous.”

The Toronto Star 10/11/2012 – Questions growing in Markham arena deal

“Markham will proceed with a controversial plan to use taxpayer money to help fund a $325-million arena — and possibly attract an NHL team.

After a sometimes emotional meeting involving more than 500 residents over seven hours, Markham council voted 7-6 against a motion that would have ended a unique cost-sharing arrangement with GTA Sports and Entertainment and its financial backer, Remington Group, for the landmark project.

“I feel it’s a work in progress,” said Councillor Carolina Moretti, who rejected the motion and supports the project’s so-called “financial framework.”

Councillors expected a tight vote, with most remaining firm in their past positions. However Councillor Logan Kanapathi appeared to waver from earlier support for the motion and became the crucial swing vote against it.

The issue has dominated Markham’s politics for months. Tuesday’s debate and critical vote spilled into Wednesday as council heard presentations from about 60 people during the marathon session.”

The Toronto Star 01/29/2013 – Markham arena to proceed with plan for public funding

“Markham take note: If you build it, what might well come are operating losses, a mainly empty and inevitably aging arena, and a snub from the National Hockey League.

Just ask Hamilton. It spent millions building Copps Coliseum in 1985, hoping to lure an NHL team. Now the Hammer is hopelessly burdened with an out-of-date, underused, money-losing venue.

Risk of that hasn’t stopped Markham city council from sticking with a plan to build a $325-million arena fit for NHL play. But the proposal is on thin ice. An attempt to sink it now, before going any farther, was blocked only by a narrow 7-6 vote. And that came at about 3 a.m. on Wednesday after councillors had spent hours listening to delegations arguing for or against the arena. To say the community is split is an understatement.

Residents skeptical of this investment have good reason for doubt. Arena backers have engineered a clever payment scheme calling for Markham to borrow money needed for the 20,000-seat venue and then have half the cost paid by a private sector partner. The city would cover its half of the construction tab through ticket surcharges and a special fee imposed on new development. Builders would, presumably, pass that charge on to local buyers.

The real risk to municipal taxpayers is the prospect of being ultimately stuck with an icy white elephant for decades to come. Arena proponents insist the planned facility would be financially viable even without an NHL team. But it’s difficult to believe this venue could attract that many concerts, conventions and community events. Copps Coliseum hasn’t managed to do so.

Nothing has been signed so far. Negotiations are set to continue with Markham’s arena partner, GTA Sports and Entertainment, on such basics as naming rights and how profit — or losses — would be split. The Star’s Tony Van Alphen reports that no deadline has been set for reaching a deal and even the basic cost-sharing formula may be open to change.

All this uncertainty is grim news for arena proponents. Their plan is already on verge of rejection, and nothing in the negotiations to come is likely to make believers out of skeptics. On the other hand, disappointing details in a less-than-flawless final deal will likely bolster the opposition and quash Markham’s arena hopes.

That may not be such a bad thing. Sometimes a field of dreams results in just an acre of weeds.”

The Toronto Star 01/31/2013 – Markham arena is a big risk without an NHL team: Editorial

“It may be some time, if ever, before Markham pushes a shovel in the ground to start construction on a major arena near Highway 407 and Kennedy Rd.

However, Mayor Frank Scarpitti, a big project booster, said he is optimistic the city can complete a deal by May. “

Graeme Roustan, who heads GTA Sports, said last summer he hoped construction would start by the fall or end of 2012. He hasn’t made any public predictions lately.”

The Toronto Star 01/30/2013 – Many hurdles remain before Markham arena is built

 “The head of Canada’s biggest concert promotion company and a key player in the proposed $325-million arena in Markham has cast doubts on the project’s viability without a major sports tenant.

Riley O’Connor, chair of Live Nation Canada, told the Star on Monday that the arena will need an NHL franchise, other pro hockey or basketball team, because concerts won’t be able to generate enough revenue for a successful business.

“You really need a major tenant to make that happen,” he said. “In almost all major Canadian arenas, that’s an NHL team, an AHL team, a major junior hockey team. You can’t do it on concerts alone.”

Other industry insiders and some taxpayers have questioned continuing assertions from arena promoter Graeme Roustan, chair and chief executive officer of GTA Sports and Entertainment, that the Markham facility can work well without an NHL franchise.

But O’Connor’s comments mark the first time that someone in the arena group of consultants and advisers has raised doubts about the project’s viability without a major tenant.

“Look, I really support Graeme in his dream, but at some point you really have to look at the risks involved,” O’Connor said in an interview.”

The Toronto Star – 08/20/2013 – Markham arena partner casts doubt on project’s viability

“The handsome, smiling face of W. Graeme Roustan and his claims to fame popped up on the big screen.
It looked impressive to residents and councillors at the Markham Civic Centre last spring during his big pitch for an NHL-size arena without an NHL club for the city’s new downtown…

But Roustan has never owned a pro franchise and not all his deals have ended well. A Texas civil jury ruled in 2009 that he committed statutory fraud in a deal with a Fort Worth couple to revive an ailing arena.

In the deal, a Roustan firm assumed the couple’s lease and arena assets. His company agreed to pump funds into the arena through a new entity that included the couple. But Roustan didn’t pay some of the money, the arena struggled and Roustan stopped funding entirely.

The lease that Roustan held with the original owners fell in default. The owners evicted the couple. Another firm that Roustan used for investment and rink management reopened the arena the next day.

The couple sued Roustan and a jury found he breached the agreement by not paying them funds for the arena. The jury awarded the couple $87,500.

Roustan appealed and a judges’ panel agreed there was evidence of “statutory fraud based on a false promise” about his funding. He has appealed again to the Texas Supreme Court.

Troy Pappas, who sold ice systems for Roustan United from 2006-2009 out of Minneapolis, said when equipment failed or an arena project needed materials, the firm didn’t meet its commitments because it simply lacked cash.

“He had no money. Zero,” said Pappas, who claimed that Roustan owed him $170,000 in commissions by the time he left. Pappas said he didn’t pursue the commissions in court because Roustan didn’t have the money to pay him even if he won his case.

Roustan did not comment on Pappas’s claim.

A company in Illinois that builds and manages arenas said Roustan United provided and installed refrigeration equipment in a rink but it was still dealing with problems months later because of poor work.

“I know our board would never have anything to do with him again,” said Don LaPato, president of Club-Sports Consulting Group.

Roustan companies, which plan to install the proposed Markham ice and rink, also took over operation of troubled arenas in Columbia, S.C., and Tucson, Ariz., but couldn’t make them work.

The Roustan companies had owed more than $250,000 in unpaid local taxes and thousands of dollars more to suppliers. Roustan countered that those debts originated with the previous owner and he was a victim of “shoddy (newspaper) reporting.”

Dismissing the merits of lawsuits against him, Roustan said rich people typically push partners around, embarrass them and try to force monetary settlements in the U.S. legal system. They also regularly engage lawyers to fight for any profits in a deal, he noted.

Roustan would not comment specifically on cases where arenas closed or led to litigation.

Roustan said he continues the business of managing and building rinks but his interest in pro hockey franchises remains keen despite five unsuccessful shots at ownership.

He formed an investor group to bid for the San Jose Sharks in 1989. However he backed off when the NHL showed its preference for another suitor.

That’s not what Markham council and residents heard earlier this year. In his public presentation slides in April, Roustan said he developed “Pro Hockey San Jose,” the group that built fan interest for a franchise.

“That’s a stretch,” said Sharks broadcaster Randy Hahn, one of three key men in the group, about the statement.

Roustan acknowledged to the Star that he didn’t develop the group, and said its inclusion in the presentation was an error by Markham city staff. But the original version in the slide show remains on the city’s website.”

The Toronto Star 10/07/2012 – Markham’s powerplay: Arena promoter taking the biggest shot of his life

“A group of Markham condo buyers has filed a class-action lawsuit against a developer for allegedly piling on thousands of dollars in what they call unfair and last-minute charges.

A statement of claim was filed against The Remington Group — the key financial backer and developer named in Markham’s ambitious NHL-size arena plan — and its alleged subsidiary companies on behalf of condo buyers in Remington’s 95-hectare mixed-used development in downtown Markham.”

The Toronto Star 11/02/2012 – Markham Condo buyers sue developer over last-minute charges

“Councillors, who signed a confidentiality agreement, and ratepayers are still seeking public release of consultants’ reports a year after they were completed.

Consulting reports about the feasibility of a $325-million, NHL-size arena in Markham have remained secret for a year despite efforts from some councillors, citizens and media to release them.

Markham city council is awaiting a second legal opinion on whether to make the reports public. It’s been more than two months since councillors deferred that decision, after city staff advised against disclosing the reports because they contain sensitive business information.

Staff have already rejected requests for the reports about the public-private project from the Markham Village Ratepayers Association and the Star, for similar reasons, under the Municipal Freedom of Information and Protection of Privacy Act.

The ratepayers association has taken its fight to the Information and Privacy Commissioner of Ontario.

Councillors have also noted that the city commissioned specific consulting work without council’s knowledge or approval. Together, the reports and legal advice have cost the city more than $550,000.

There’s continuing frustration that Mayor Frank Scarpitti and the arena’s promoter, Graeme Roustan, have used optimistic numbers and information from the reports to tout the proposed project and win public support.

Scarpitti did not return calls requesting comment. The mayor has stressed in the past he would not vote for the project unless a final deal would be in the best interests of citizens.

However several councillors and two ratepayer groups say there is no reason the city can’t simply black out sensitive financial information and release the reports. “What harm would it do?” said Councillor Joe Li.”

The Toronto Star  04/15/2013 – Markham arena reports remain secret despite push for release