The other Canadian real estate boom

 

Sports stadiums and arenas are popping up across the country

by Aaron Hutchins on Saturday, August 4, 2012 12:34pm

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There is another boom in Canadian real estate and it’s not in houses or condos; it’s in professional sports facilities. Several football stadiums and hockey arenas are set to sprout up across the country, and like the residential housing boom, they are largely being built on borrowed money.

The city of Regina unanimously approved a deal for a 33,000-seat stadium for the Saskatchewan Roughriders on July 23. The estimated $278-million cost has the team paying $25 million, while the bulk is split between the city and province (to be repaid in property taxes and higher fees attached to ticket prices). Other new CFL stadiums, meanwhile, are in the works for Ottawa, Hamilton and Winnipeg, and all will be funded by provincial and city governments.

Also on the horizon are some ambitious arena projects. Edmonton is pushing for a new home for the Oilers. Quebec City hopes to bring back the Nordiques with a $400-million arena, with the cost shared between the city and province.

The boom is primarily the result of years of neglect: many of the facilities being replaced are old and falling apart. Renovations are no longer enough to keep Winnipeg’s stadium, which was built in 1953, workable. In Ottawa, Lansdowne Park is set for a much-needed overhaul; in 2007, cracks were found in the concrete columns and horizontal beams of the park’s Frank Clair Stadium, former home of the CFL’s Renegades. It is being rebuilt. “We coasted on our infrastructural capital, when it comes to sports, for a long time,” says Glen Hodgson, chief economist for the Conference Board of Canada.

Studies, however, suggest that the long-term economic results of these investments won’t be pretty. One recent report by the Conference Board found that building sports complexes does little to stimulate growth. It might boost civic pride, but can also strain already-burdened government budgets. “Those who think there’s an economic return from investing in sports facilities are probably kidding themselves,” Hodgson says. Still, anyone who has watched a CFL game in Regina in November will no doubt be happy with the new digs.

Posted via email from Selling Cambridge with Clare DeJong