You win some, you lose some

North America has a long history of public investment in sports arenas for professional teams. Most of it ends up with a much bigger drain on the public purse than initially estimated.
Toronto's SkyDome cost more than $500 million to build in the late 1980s. Rogers Communications bought it in 2004 for $25 million and renamed it the Rogers Centre. ((Canadian Press))
North America has a long history of public investment in sports arenas for professional teams. Much of it has left taxpayers picking up a bigger share of the tab than expected.

Take Montreal's Olympic Stadium, which took and took from taxpayers for three decades.

Montreal's Olympic Stadium cost about $1.6 billion, one of the most expensive stadiums ever built. ((Paul Chiasson/Canadian Press))
In 1970, construction costs for the main venue for the 1976 Summer Olympics were estimated at $134 million, with governments picking up the entire tab.

When the Games opened, the bill had risen to $264 million — and construction wasn't even finished.

The Quebec government put an extra tax on tobacco products in 1976 to help pay the construction costs. By the time the last payment was made in November 2006, the total tab — including construction, renovations, repairs and interest — was $1.61 billion, making it one of the most expensive stadiums ever built.

Currently, the Big O is used for the occasional trade show, rock concert or playoff game for the Montreal Alouettes of the Canadian Football League.

The stadium's primary tenants — the Montreal Expos — moved to Washington, D.C., at the end of the 2004 Major League Baseball season. Today, there are more Expos Facebook fans than there were fans in the seats in Montreal.

Mistake by the lake?

Not to be outdone in the white elephant category, Toronto's Rogers Centre (née Skydome) took a big gulp from the public trough.

The idea of a domed stadium in the heart of Toronto was born as terrible weather plagued the 1982 Grey Cup game, played at the late Exhibition Stadium near the shores of Lake Ontario.

"We want a dome!" the fans chanted.

Seven years later they got it. Three levels of government initially pledged $30 million each to help make the dream a reality. That was supposed to cover the lion's share of the estimated $150 million price. A collection of private sponsors kicked in the rest in exchange for exclusive advertising deals and first dibs at premium seating.

By the time Skydome opened — two months late — costs had soared to $570 million. The stadium was carrying a debt of $400 million by 1993. The stadium's primary tenants — the Toronto Blue Jays — filled the seats 81 days of the year. The Toronto Argonauts took care of another nine dates. Maybe 10 or 11, if they fielded a playoff-capable team. Still, this wasn't nearly enough to cover the bills.

It was estimated the stadium would have to be booked for 600 days a year to pay the bills and turn a small profit. In March 1994, the provincial government, which was stuck with owning Skydome, sold it to a private consortium led by Interbrew. The province got $151 million.

The price kept falling from there. In 1998, Sportsco International LP paid $85 million for the venue. Rogers Communications, which had bought the Toronto Blue Jays in 2000, threw in another $25 million four years later and got the stadium, too.

From private to public

Judith Grant Long , an associate professor of Urban Planning at Harvard University, has studied the way major sporting venues are financed. She notes that in the early years of the 20th century, wealthy industrialists who had bought professional teams built most stadiums and arenas.

They wanted control of the venue — and the ticket and concession revenue the teams would generate. These venues — built with private money — included the Montreal Forum and Toronto's Maple Leaf Gardens.

The Ottawa Senators call Scotiabank Place home. ((Phillip MacCallum/Getty Images))
Long's book Full Count: Inside Public-Private Partnerships for Major League Sports Facilities notes that the era of public-private partnerships started to gain traction in the 1970s as the owners of teams sought replacements for aging facilities.

In the 1990s — especially in the case of American football — owners often threatened to move their teams to more accommodating markets if municipalities balked at building expensive new facilities.

The Los Angeles Rams of the National Football League moved to St. Louis in 1995 after the city balked at demands for a new stadium. The Los Angeles Raiders moved to Oakland, where they had played between 1960 and 1982, for the same reason.

That left Los Angeles, the second-largest television market in the United States, without a professional football team. Since then, several other teams have used the threat of moving to Los Angeles as a way to get their cities to replace or repair old stadiums.

Old Giants Stadium in East Rutherford, N.J., is demolished in June 2010. The people of New Jersey owe $110 million on the facility. ((Kathy Willens/Associated Press))
When the NFL's New York Jets and New York Giants moved into a new $1.6 billion stadium in September 2010, they left a now-demolished Giants Stadium in the Meadowlands Sports Complex in New Jersey. That stadium still carries a debt of $110 million.

Proponents of public-private partnerships in the U.S. say private investors pay an average of 57 per cent of the cost of new stadiums in public-private arrangements.

Long suggests the public's tab is much higher, if you take into account the public sector's bills for building roads and other infrastructure to service new stadiums, as well as land grants, lease give-backs and the waiving of property taxes.

The situation in Canada is a little different.

Arena owners finance interchange

In Ottawa, construction on what is now called Scotiabank Place — home of the Ottawa Senators — did not begin until the private corporation that owned the team got sufficient funding together to build a new highway interchange to service the site.

Over the past decade or so, private money was behind major new arenas — for lucrative professional sports franchises — in Montreal, Toronto and Vancouver.

But in Winnipeg, the new home for the Blue Bombers of the CFL is being paid for by public money after financing from a private partner fizzled.

The replacement for Hamilton's Ivor Wynn Stadium is slated to receive $75 million from the federal and provincial governments and $45 million from the city. The stadium is a key part of the 2015 Pan Am games, which were awarded to Toronto.

Regina is angling for a new football stadium as well, and Calgary and Edmonton are looking for new arenas for their NHL teams.

The federal government suggests money for sports arenas could come out of the $1-billion budget of Public-Private Partnerships Canada.

Calgary Mayor Naheed Nenshi says a new arena would be great, but the city needs money for other infrastructure projects first.

"In Calgary, we have a $2-billion social deficit just in recreation centres, libraries and fire stations."

Cities need money for other things

Montreal Mayor Gerald Tremblay also worries that using infrastructure money for facilities for professional sports teams would hurt projects such as public transit that also need money.

Funding details for Quebec City's arena project aren't clear yet, although the province is said to be kicking in $175 million if Ottawa matches that amount and the city provides another $50 million.

Pierre Karl Peladeau, the president and CEO of Quebecor, is said to be offering tens of millions of dollars for the project. Among his company's holdings is TVA, the largest French-language broadcaster in the country.

The major detail missing from the Quebec City arena plan is a long-term tenant.