What we know — and what we don’t — as the Halifax CFL stadium proposal heads to council
Zane Woodford, StarMetro Halifax October 29, 2018
HALIFAX—The future of a stadium and professional football franchise is in council’s hands this week.
Halifax regional council’s vote on Tuesday is a critical step; it could either throw out the proposal completely or lay the groundwork for a stadium and team in the municipality.
But there are countless unknowns, including the true cost to taxpayers.
The pitch from Maritime Football Limited Partnership (MFLP) is for a 24,000-seat stadium surrounded by commercial and residential development on a six- to eight-hectare portion of the 38-hectare Shannon Park lands, the former site of military housing next to the Dartmouth side of the MacKay Bridge.
The partnership, consisting of AMJ Campbell Van Lines president Bruce Bowser and former Arizona Coyotes co-owners Anthony Leblanc and Gary Drummond, is in talks with the Canadian Football League (CFL) to secure an expansion franchise for Halifax for the 2021 season, conditional on a stadium.
MFLP has met with Halifax Regional Municipality (HRM) staff, council, provincial staff and Premier Stephen McNeil.
A report to council recommends directing staff to complete a business case analysis on the project, work with the province to make the necessary legislative changes and determine new ways to pay for it and report back to council with a business case and a no-or-go recommendation.
The report says the stadium would cost between $170 million to $190 million; one reason for the more thorough business case is to nail down a precise figure.
The report suggests MFLP would buy the land, currently owned by a Crown corporation, Canada Lands Corporation (CLC).
It’s unclear who would own the stadium once completed, and other than HRM, it’s unclear who would pay for the cost of building it.
The report says the construction of the stadium would be paid for through a controversial model known as Tax Incremental Financing (TIF). In short, HRM would borrow the money needed to build the stadium and use increased property taxes in the surrounding area, a TIF district, to pay it back.
The justification for TIFs is typically that the project wouldn’t be possible without using the model and that the increased property values in the area will result in enough tax revenue to cover the annual debt costs — in this case $10 million, if the stadium cost $190 million.
“TIF models do have a risk factor as they are related to property values that can be affected by supply, construction delays, build-out time and absorption,” the staff report says.
It’s a similar model to the one used to finance the Halifax Convention Centre. In that case, the math isn’t working out. The office and retail portions of the larger Nova Centre project are largely vacant, the hotel is still unfinished and the resulting property tax assessments are lower than expected.
The staff report says Halifax would be a “partner” in the capital financing but never specifies whether MFLP would pay any of the capital cost. The report also suggests HRM will be on the hook for ongoing costs.
“Based on the preliminary discussion and information provided by MFLP, it is expected that HRM’s contribution to a stadium would include being a funding partner on the capital cost to construct the stadium as well as possibly being a contributor to ongoing capital repairs and maintenance,” the report says.
The staff report says securing funding from the province is “essential,” but the premier has publicly stated that capital financing through general revenue or tax incentives is off the table for the project.
Instead, staff are floating two alternative ideas: increasing the municipality’s hotel marketing levy and creating a new tax on car rentals. Either idea would require legislative changes from the provincial government. The staff report doesn’t say how much money the municipality would seek from the province through those taxes.
The report says MFLP would also seek a property tax break agreement on the stadium, something HRM doesn’t have the legal authority to do with for-profit corporations.
From a municipal planning standpoint, the project would need bylaw amendments to allow and expedite the process, “which would designate the selected stadium and mixed-use development as a matter of regional significance, requiring special policy and regulatory consideration.”
The approval process — including public engagement, community and regional council approval and provincial approval — could be completed as quickly as six months, the report says.
The staff report expressed concerns about the project on the planning side, including its effect on the Centre Plan and the Cogswell redevelopment project.
“A concern would be that the proposal simply shifts development from one area of the municipality to another, and as a result, there would be no incremental tax revenues. Competition could impact the build out and absorption of units for the Cogswell Development,” staff say.
There’s also millions of dollars worth of municipal infrastructure to worry about.
“Infrastructure could range from parks, roads, transit, public safety and street lights to any associated recreation requirements,” the report says.
The site is also prone to storm surge and sea level rise, the staff report says, “and may require unique engineering solutions to address risks to planned public roads, parks, services and other public infrastructure.”
If council moves ahead as recommended on Tuesday, staff will attempt to answer these questions and HRM and MFLP will start gauging public support for the project.
CLC won’t sell the land needed unless the proponents undertake a public engagement process “to confirm community support for the incorporation of the stadium into the current Shannon Park redevelopment concept.”
MFLP will also need the Millbrook First Nation, which is acquiring about three hectares of the Shannon Park lands, on its side.
“It will be necessary that the Millbrook First Nation is engaged and confirms that it supports the proposed stadium development,” the staff report says.
Public support currently varies, depending on who’s asked and who’s asking.
A Corporate Research Associates poll cited in the staff report, with no methodology or margin of error noted, says that “63 per cent of HRM residents support a stadium being built with the financial support of municipal and provincial governments.”
A poll commissioned by StarMetro Halifax and conducted by MQO Research earlier this year found a split in public opinion. MQO surveyed 500 Halifax residents in late March and early April, resulting in a margin of error, for a population of this size, of plus or minus 4.4 percentage points, 19 times out of 20.
Forty-two per cent of respondents said their views were either “very favourable” or “favourable” to the idea of taxpayer money being used for a stadium, and 41 per cent said their views were “unfavourable” or “very unfavourable.”
Shannon Park was the No. 1 location favoured by respondents in that poll, with 27 per cent choosing it over Dartmouth Crossing at 22 per cent and Bayers Lake at 14 per cent.
If council follows the staff recommendation on Tuesday, MFLP will start public engagement and then launch a season-ticket drive and a team-naming contest and finalize its agreement with the CFL.
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