Markham Approves $325M Arena with Developers’ Support
Overview
As reported in my blog of March 28, 2012, the Town of Markham is proceeding with a $325M NHL-worthy arena of approximately 20,000 seats. It received approval from Council to proceed with the project on April 26, 2012.
Apparently, 50% is to be financed privately by a consortium of Rudy Bratty and W. Graeme Roustan, a sports entrepreneur and Chair of Bauer Performance Sports. The other 50% which the Town is to finance, is intended to be sourced from “the collection of monies from developers in Markham based on a formula and they’re paying down the $162.5M,” Roustan said in an interview with the Toronto Star. This is to cover 95% of the Town’s contributions. As noted in our previous blog, the intention was to obtain “voluntary contributions” from developers, who are processing low-rise or high-rise developments in Markham with charges ranging between $2,000 and $6,500 per unit/house in the area. As the Town has no legal right to charge these costs through to developers, developers are being “encouraged” to make these contributions as it purportedly will benefit everybody including developers whose properties supposedly will appreciate in value.
In a letter sent to Mayor Scarpitti, BILD took a clear position prior to Council approval, that these charges were not “voluntary” as they were being tied to development approvals and stated quite clearly that it would not support any of these contributions outside of the Development Charges Act.
David Rider in his article in the Toronto Star http://bit.ly/Jbno1r refers to a confidential report which anticipates that developers would cover 95% of all of the Town’s share of costs via “voluntary contributions”, with the remaining 5% to come from payments under Section 37 of the Planning Act, paid by developers in exchange for increased density rights.
The proposal is clearly creating tremendous controversy both within the Town of Markham and the development industry. The need for such a massive project is questionable, considering the limited spinoff of the economic benefits from a NHL-style arena, and as well, the difficulty in obtaining the franchise in the first place in light of the Buffalo Sabres and Toronto Maple Leafs veto rights.
Furthermore, it is questionable whether there will be sufficient concerts needing venues over and above the existing concert facilities around the GTA including the Air Canada Centre and the numerous large theatres and complexes in the GTA.
At the end of the day, however, from a development perspective, seeking to finance a commercial enterprise on the backs of developers and ultimately, homeowners, under the guise of “voluntary contributions” is something that should be vigorously opposed. This process really makes a mockery of the strict limitations of the Development Charges Act and the parameters that were originally set forth in that Act to limit excessive municipal spending.
