On Monday night, the first of two council meetings in Markham, Ont., began, in which the taxpayers of the suburban Greater Toronto Area city got a chance to ask how the latest financing plan for a 20,000-seat arena would not cost them any money.
Markham Mayor Frank Scarpitti and his friend, arena promoter Graeme Roustan, hinted last weekend more details about how the private sector will pay for this $325-million arena would be revealed Monday.
But the biggest questions about this boondoggle remain unanswered: Does the NHL ever plan on putting a second franchise in the GTA so that if this arena is built it will have a major tenant to pay the operating bills? And since all NHL commissioner Gary Bettman has ever done is warn Markham politicians not to count on seeing an NHL team, how exactly will the 130 events Roustan claims the arena will attract every year keep it in the black?
Despite the lack of answers, and many questions from the details of the latest financial proposal to Roustan's long list of failed business deals and unhappy ex-partners, Scarpitti and his supporters on council are eager to rush into a deal.
Once the long list of speakers is finished at the meetings, perhaps by Tuesday night, council is expected to vote on whether to continue as a financial partner with Roustan, which may or may not mean guaranteeing loans with public money.
The latest financial proposal surfaced last weekend, when Scarpitti and Roustan held a press conference for certain media (MarkhamToday.ca, a website that published an interview with former Maple Leaf Sports and Entertainment Ltd. president Richard Peddie throwing cold water on the idea of a rink with no major tenant, was not allowed into the press conference).
Without offering many details, two memorandums of understanding were shown that called for Roustan's company to come up with about $200-million to cover half the construction costs plus arena-lease fees, with an unnamed group of property developers agreeing to raise the rest of the $325-million needed, with about $70-million already pledged. But nothing was said about how Roustan is going to come up with GTA Sports and Entertainment's share of the cost. This may be a challenge, since prominent developer Rudy Bratty is no longer funding Roustan's company.
"No, we're no longer the big private funder any more," said Randy Pettigrew, senior vice-president of land development for Bratty's company, Remington Group Inc. However, Pettigrew did say Remington thinks the arena is a good idea if it does not cost the taxpayers anything, because it represents jobs and future development.
Roustan now lists two private-equity companies, Canaccord Genuity Corp. and Jefferies LLC, as partners with GTA Sports in raising $162.5-million to cover half of the construction costs. He said through a spokesman Monday that Canaccord and Jefferies are now funding GTA Sports. But there are no binding documents promising the construction money will appear, which gives the mayor's opponents pause.
"[We've] just seen it. How can we go approve it in the next few days?" Markham Councillor Jim Jones said of the two memorandumsproduced by Scarpitti and Roustan last weekend.
Like most of opponents of this financing framework, Jones is not against the idea of an NHL-ready arena. But, they say, if this is such a great deal, why doesn't Roustan simply round up some private investors and make it happen – just like MLSE did 14 years ago, with the Air Canada Centre?
"Go get investors and develop this like the Toronto Maple Leafs did, if this is viable," Jones said.
And if council succumbs to the Scarpitti's and Roustan's push and agrees to the latest financing proposal, taxpayers have only one question left: Have you lost your minds?
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