Q&A: Can Halifax build a CFL stadium that isn't fully funded by taxpayers?
Economist suggests hotel tax could be the solution to pay for an expensive stadium
Halifax Regional Municipality is at the one-yard line, wondering if it should charge ahead with a proposal to bring a CFL team to the city. But in order to play, the team needs a venue, which could come at a significant cost to taxpayers.
The cost of a stadium is steep. The new home of the Saskatchewan Roughriders came with a $278-million price tag.
The premier has said that the province won't put up the cash to build a stadium. So this week, HRM city staff were asked to prepare a report on the true cost of building a stadium and to look into ways of funding it.
Economist Glen Hogdson says there are ways that don't burden taxpayers. He is a senior fellow at the Conference Board of Canada and author of the book Power Play: The Business Economics of Pro Sports.
He spoke with the CBC's Amy Smith to share his thoughts on whether a stadium is a worthwhile investment.
It's not clear what the ask is yet in this situation, but is it worth it to taxpayers to fund stadiums?
It can be worth it to taxpayers, but taxpayers don't necessarily have to pay for it. There's actually lots of different models that are evolving right now for how you can have public support for a sports facility — for a stadium, for a hockey arena — but actually share the burden people who use hotel rooms and other sources of revenue.
So I would say that to attract a team to Halifax, you're going to need a new facility and have to figure out a way to pay for it.
They only play nine home games, would you need other sports and events to fill in those gaps and make it worthwhile?
Ideally you would be able to use the venue for other things, rock concerts, whatever and have more nights where you're actually attracting rent.
The other way to go is to look at the funding side. Who is actually going to provide the funds?
The kind of model that I see developing now in the United States is to have the taxpayer backstop it, but actually have people like hotel users pay for the stadium, add sort of $1 a night, $2 a night over 25 or 30 years.
So ideally it would be great to have the facility used a lot more times which is why hockey arenas, for example, become much more interesting commercial business models than football stadiums.
The locations that have been suggested are outside of the downtown, does that make a difference?
Downtown stadiums are more of a draw. People actually like to go downtown, go to bars and restaurants afterwards, but in the case of Halifax, I think you want to position it so people can come from longer distances.
For me, ease of access would be at least as important as a downtown location.
Would a CFL team, in your opinion, be good for Atlantic Canada?
It's not a net creator of wealth. A CFL team would probably have a revenue base of about $15 million a year. That's frankly just another small business. It'll create a few jobs and it'll be good.
I think the real thing is, does it make people feel good about living in Halifax? Is it something adding to the social wealth of the community?
You look across the country and the cities that have successful CFL teams, I put Saskatchewan at the top of that list, Winnipeg, Edmonton, Calgary, and then it begins to get more questionable. Hamilton, with a new stadium. They all feel good about themselves. There's a certain level of pride.
So don't think about it as a business proposition. Think of as another form of community engagement, community wealth.
We've never had a pro football team here. Do you think that fan base is strong enough to support one?
You certainly have a big enough population base. The Halifax area has, what, half a million people? The province has just short of a million. Compared to Saskatchewan, that puts you in roughly the same ballpark, so the fan base is there.
Of course people in Halifax and Nova Scotia like sports, you can see that in the sports that they've had. Basketball, junior hockey, lots of events over the years.
So with the population base you can build a loyal fan base. You can attract between 20-25 thousand people a game at the right pricing point. So you have the right fundamentals.
I think your first question was really spot on. Who is going to pay for the stadium? Who is going to build and pay for a stadium? And there you really have to put your thinking cap on.
This interview has been edited for length and clarity.