Stadium Studies – Phase 2
Posted November 29, 2011
On Dec 6th HRM council will resume discussion of a new stadium. Public meetings have been held to discuss where a stadium could be located and what it might look like. These questions are undoubtedly more fun to talk about than the tedious business of examining the business case.
Given the very large amounts of taxpayer money involved it is to be hoped that any decision to build would include a realistic examination of all capital and operating costs and corresponding revenues. There are reasons for pessimism.
- Although the phase one report does not provide any estimate of capital cost a number of $60,000,000 has been used in various discussions. Any final decision should include costs for land acquisition and preparation, planning and design, construction, all furniture and finishes, access roads and parking, landscaping, and a sensible contingency amount.
- Instead the Phase 2 report is to provide a Class C estimate. This is typically used in project management to differentiate between possible options but not to make a firm decision. It will be based on the recommended location and design sketches. Yet it appears that Council will be asked to make a decision to proceed based on this limited information.
- To be ready for the 2015 FIFA deadline land preparation and construction would have to commence almost immediately, long before design has been completed and costs accurately projected (“Class A estimate”). If ever there was a recipe for massive cost overruns this is it.
- Assuming that the proposal continues to be for 10,000 permanent and 10,000 temporary seats, it will be much smaller than necessary to house a CFL franchise. While this was clear from the Phase 1 report, the ensuing consultations made it easy for people to believe that this was one of the possibilities to be enabled. In fact it might more than double the original cost.
- It has been reported that participation by a city in the 2015 FIFA event will require a payment of $2,000,000 in cash plus in kind services worth $250,000. For this Halifax might get to host six or seven games. None of these games will include Canada or the USA, which will go to the much larger facilities available almost everywhere else. Instead we will get matches like Equatorial Guinea vs. Columbia or North Korea vs. Nigeria. These may display excellent soccer but will not do much for the tourist trade. The vast majority of spending at the event will be by Nova Scotians who would otherwise spend it on local goods and services (generating just as much economic activity and tax revenue) without paying $2,250,000 for the privilege.
- The Phase 1 report talks about prospects for other national and international events. Based on the experience of comparable facilities in Canada these are very small. And if the cost of entry is comparable to the 2015 FIFA event they will come with their own substantial price tag.
- The province has said again on Oct 17 that it is unwilling to participate at this time. The federal government is unlikely to participate if the province does not, nor if the facility is for a professional sports franchise. Is HRM on its own?
By the time the second report is received in December the municipality will have spent $375,000 on consultants and used considerable time from able volunteers. For that investment taxpayers deserve a clear-eyed look at financial prospects of a stadium. There may well be a case for a high quality community use facility with one or two thousand seats. But the evidence so far available suggests that a project to rush construction of an expensive stadium at this time is a very bad idea.
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