The proposal to bring a professional football team and stadium to Halifax raises many questions.
Since the proponents of the stadium want the Province to contribute money and concessions on ownership of former federal lands, it’s fair for people outside HRM to be concerned and need clarification.
One of the proposed revenue sources is a two-to-four percent levy on hotel bills.
I wonder about the impact of this entertainment tax/levy on health care. HRM is the region’s medical centre with the greatest concentration of medical specialists.
So, like medical pilgrims, people come to Halifax for appointments, tests, treatments and surgeries. They bring their sick kids to the IWK. The bulk of these people travel with a family member or friend, who often need a place to stay. Every day hundreds of hotel, inn, lodge and B&B rooms in HRM are occupied by people who are here for medical purposes. A levy on their accommodations is a type of tax on health care.
While $4-$8 a night may not seem much to some, to families whose main income earner is ill or who have to take time off work, this adds up. In the U.S. this type of surcharge is called “drip pricing” and is getting push-back from the corporate community as well as being the subject of lawsuits in Nebraska and Washington, DC.
When thinking about this I discovered a similar hotel levy had been proposed to pay for sporting infrastructure in Glendale, Arizona. Glendale is a city of 230,000 a few miles outside of Phoenix. A federal judge rejected the levy on constitutional grounds.
We are a different legal system, but it is worth studying the Glendale experience since one of their former team owners is also a backer of the Halifax stadium proposal. The proposal for Halifax seems to mirror the deal the owners of the Phoenix Coyotes had with the city for managing the Gila River Arena. This link provides details of a similar-sounding proposal:
I understand a passion for sports, but in Canada and Nova Scotia we have expensive sporting history to consider. An example is the exuberant former Montreal Mayor, Jean Drapeau, who famously said, “The Olympics can no more run a deficit than a man can have a baby.” Well, Montreal’s 1976 Olympics were so costly – 13 times over budget – that it took the city 40 years to pay off the Games’ debt.
In 2008, Glendale invested $14 million to host The Super Bowl. They lost $1.6 million.
More recently and more local was Halifax’s winning bid to host the 2014 Commonwealth Games. The public was told the games would cost $785 million, generate $2.4 billion in economic benefit, increase the province’s annual GDP, create 18,000 jobs and leave a legacy of “world-class sport facilities and programs”. Proponents said, “We are not going to see the kinds of overruns that other games have seen.”
But investigative reporting later learned that the real budget for the Games was $1.72 billion and would be closer to $2 billion. A consultant hired by the organizing committee criticized the organizational structure, business plan, proposed ticket prices, budget projections and said the positive assumptions – like higher attendance and ticket prices – were based on a “we are different” concept.
If Halifax is to host a professional sports team and stadium, perhaps we should look at the model provided by Green Bay, Wisconsin. Green Bay is a city of 109,000 people so it is smaller than HRM, yet is home to the Green Bay Packers, the winningest and most successful football franchise in the NFL. The Packers have no public money involved in the team or stadium, nor do they have a single owner. For lack of a better description, they’re sort of a cooperative.
The Packers are a community-owned team. They sell shares to the public and have 360,000 shareholders. Their last share offering in 2011 raised $67.4 million. In 2003 the Packers’ home, Lambeau Field, underwent a $295-million redevelopment that increased capacity to 80,000. The Packers’ organization paid for that.
It’s out-of-the-box thinking to raise money for professional sports by selling shares to fans and supporters, but it doesn’t divide the community and doesn’t put an extra burden on those who have to travel for health care.