Monday, 29 October 2012

A New Football Stadium for Regina?


To: The Mayor and City Council   
October 29, 2012

RE: Memorandum of Understanding on the proposed new stadium

Dear members of the City Council:

The Memorandum of Understanding on the financing of the proposed new football stadium adopted on July 19, 2012 was not final and needs to be re-assessed by the new City Council. There are a number of important reasons to revisit the issue of whether to build a new stadium or renovate the existing Mosaic Stadium. These are as follows:

(1) Some have stated that the recent municipal election settled the issue in favour of building a new stadium. However, the citizens of Regina were not given a clear choice on the issue. The three leading and serious candidates for Mayor all supported the building of a new stadium; there was no choice for the alternative. The same problem carried over to voting in the wards. Even in ward 3, where I live, there was no candidate who openly stated that they opposed the proposal for building a new stadium. There was no referendum. The election did not resolve the issue.

(2) The previous City Council did not make a serious effort to look at the option of renovating the existing stadium. The public was kept in the dark about this option. It was often stated that a renovation would cost $150 million. This was the figure supposedly put forth by a consultant’s report done for the Saskatchewan Roughriders. But both the football club and the City Council have refused to make this report public. We have no idea how the consultant came to this conclusion.

On February 8, 2008 members of the City Council, meeting as the executive committee, received a report done by Santec Architecture on the state of Mosaic Stadium. This report was not released to the public. But it has been obtained by the Canadian Taxpayers Federation, which posted it on their web site. After a careful examination of the stadium, the technical consultants concluded that it was in pretty good shape, and with the expenditure of $3.4 million, it could be made to last at least another ten years. The report detailed the renovations that were recommended.

The Saskatchewan Roughriders are currently carrying out significant renovations to Mosaic Stadium, which is to cost them $14 million. Among other things, this will expand the seating capacity to 50,000. There is no reason why these renovations cannot be maintained with some additions, which could include new seats, more washrooms and more refreshment sites.

(3) The previous City Council asked Praxis Analytics to survey public opinion as to what they think is the single most important public issue facing Regina as a community. Their survey found that 30.4% felt that the question of the availability of affordable housing was the most important issue. Only 3.2% indicated that they thought the issue of the stadium was the most important issue. The City Council did not release the results of this public opinion survey until after the Mayor and City Council had signed the Memorandum of Understanding.

These reasons may explain why there was such a low turnout in voting in the recent municipal election, only 33% of eligible voters.

Comparison with other Prairie Football Stadiums
There are three other prairie cities which have stadiums which support privately-owned professional football teams. Their experience is quite different from that of Regina.

(1) Calgary. Population 1,096,833. McMahon Stadium opened in 1960. Seats 35,000. It is owned by the University of Calgary and operated by the McMahon Stadium Society. There were renovations in 2001, 2005 and 2010. The most recent renovation, adding luxury boxes, cost $1 million, to be financed by the Society. There is no pressure to build a new stadium. Renovation works and is cost effective.

(2) Edmonton. Population 812,201. Commonwealth Stadium, opened in 1978. Seats 60,000. Owned by the City of Edmonton. Renovations in 2001 cost $22.17 million. During 2012, new seats are being  added at a cost of $12 million, to be paid for by a tax on tickets. There is no pressure to build a new stadium. Another example of how renovations of an existing stadium is a prudent route to take.

(3) Winnipeg.
Population 663,617. The current Canad Inns Stadium is owned by the City of Winnipeg and operated by the Winnipeg Blue Bombers. It opened in 1953. Seats 29,000. Plans for a new stadium began in 2007; revised plans increased the cost from $120 million to $190 million. Investors Group Field, the new football stadium, is due to open in late 2012. It will seat  33.000.

The most obvious fact from the above is that Regina has the weakest population base for a stadium designed to primarily support a private professional football team and would be the most likely of the four to experience financial failure.

Building a New Stadium: Winnipeg v. Regina.

There are very significant differences between the construction of the new stadium in Winnipeg and the current proposal being put forward in Regina. The financial obligation being assumed by the City of Regina is radically different from that of the City of Winnipeg. Here is a summary of the initial financing:


Financing Winnipeg’s New Stadium           

Winnipeg Blue Bombers                       $85 million      44.7%   
 Manitoba government grant                 $22.5 million   11.8%                                                 
City of Winnipeg grant                          $7.5 million     3.9%
Provincial loan to City of Winnipeg        $75 million     39.5%

Total initial cost                                    $190 million

The province of Manitoba has provided loans to build the stadium. The provincial loan to the city will be paid for by the sale of the Polo Park land to Cadillac Fairview ($30 million) and property taxes on the commercial businesses to be developed on the Polo Park land. There will be no general increase in property taxes to pay for the project.

Financing Regina’s Proposed New Stadium
Saskatchewan Roughriders                  $25 million            8.9%
Provincial government grant                 $80 million            28.8%
Provincial loan to City of Regina          $100 million          35.9%
City of Regina contribution                  $70 million             25.2%
City land contribution                          $3 million               1.1%

Total initial cost                                   $278 million

The City of Regina has agreed to assume any cost overruns, which are a normal part of stadium construction in North America. The City of Regina has also agreed to assume all maintenance and rehabilitation costs for the next 30 years, which is estimated to be $230 million. The sale of the land on which Mosaic Stadium stands is expected to bring in $30 million. Paying back the loans over thirty years is expected to increase the full cost of the stadium to $675 million. The Memorandum of Understanding states that $300 million of this total cost will be paid for by general increases in property taxes for all residences and businesses in the city.

There are some notable differences in the two stadium projects:

(1) The Winnipeg football team will provide 44.7% of the cost while the Regina football team is to put up only 8.9% of the initial cost.

(2) The Saskatchewan government is to put up 28.8% of the initial cost of the new stadium while the Manitoba government is only putting up 11.8%.

(3) The City of Winnipeg is contributing a grant equal to 3.9% of the cost, and the loan equal to 39.5% of the cost will be paid back by the commercial development of the old stadium site. There will be no general increase in property taxes.

In contrast, the City of Regina is to assume 62.2% of the initial cost of building a new stadium, and 44.4% of the full cost of the stadium is to be paid back by a general increase in property taxes on residences and businesses.

The issue of property taxes
Many people do not believe that property taxes should be used to build a stadium which will be used primarily to host a professional football team. Professional football is part of the profit-making entertainment industry.

As a senior citizen, living on a fixed income, I am not pleased with the proposal that there will be an increase in property taxes to pay for the new stadium. Property taxes are regressive taxes, falling heaviest on those with low income. They do not take into consideration the income or the wealth of the people living in a residence. For many seniors, property taxes are a significant burden. For example, the city taxes on my house take around 10% of my annual income.

Those of us who live on relatively low income have a limited budget for entertainment. I personally prefer to spend my entertainment budget on movies and concerts. When it comes to sporting events, I much prefer to go to a hockey game. Why should I have to pay to support the professional football industry? Mosaic stadium as it now stands fills the need of amateur sports.

The most serious problem facing Regina these days is the high cost of housing, the lack of rental housing, and the desperate need for social housing. This basic social problem should certainly take priority over building a new stadium. I would not be surprised to learn that a majority of the citizens of our city would prefer to see Mosaic Stadium renovated. The people of Regina need a referendum on this issue.

Sincerely yours,.
   
John W. Warnock
2269 Cameron St.
Regina, SK
S4T 2V9
352-5282
warnockj@hotmail.com

4 comments:

  1. Although the Regina funding model could be altered, the Edmonton team is not private owned but a public team, like the Riders. Edmonton and Regina stadiums are not comparable when discussing respective upgrades, they are light years apart in quality. Additionally Commonwealth Stadium did not need a complete overhaul, which Taylor Field would need once any upgrades were initiated as the electrical and all current construction standards would need to be adhered to. Thus renovating the existing site would be cost prohibitive. Retrofitting is much more expensive than new construction. If Regina had a private owner and the stadium were privately owned it would be an easy decision, get the private money to build it, but as they are both publicly owned, it makes this stadium issue unique to most other situations. Public money ($18,000) was given in 1912 after the cyclone to fix the stadium when money was obviously needed elsewhere, but they deemed it important. If no public money were given, when the city was in dire need, there would not be a Riders. Also in 1979 when the expansion went from 14,000 to 27,000 seats. If the public money were not given then too, there would be no team today. To predict the future, look to the past. Like museums, art galleries, zoos, concert halls and other cultural facilities, the precident has been set for public funding, and no one can debate that the team does not contribute to the culture and civic pride of the city, which makes better citizens, just like museums etc. These are not millionaire players with billionaire owners. If it were, the decision would be easy. We cannot compare the Regina situation to other cities as the local issues are much different.

    As for the affordable housing issue, which is certainly more important than the stadium, it is a federal funding issue and has never been a municipal responsibility. All levels of government has had their responsibilities layed out for decades and budgeted accordingly. The feds are not contributing to the stadium and they are the level of government that should be lobbied for housing funding, just as the province is the healthcare and school funder.

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