Halifax tackles funding options for $200-million CFL stadium

Maritime Football Limited wants Shannon Park—and a lot of government help—for its proposed football expansion.

click to enlarge Halifax tackles funding options for $200-million CFL stadium
MFL's proposed stadium location. The peninsula jutting out beyond the blue border belongs to the Millbrook First Nation.
Maritime Football Limited wants to buy 20 acres of land at Shannon Park for a $200-million football stadium—but first the province and the municipality have to agree to help pay for it.

A staff report on the much-anticipated stadium proposal coming to city council on Tuesday recommends that HRM completes a “thorough business case analysis” for a stadium district on the Shannon Park land before agreeing to shift hundreds of millions of dollars in public tax revenue to the private business venture.

Council asked for the report back in July, after multiple closed-door meetings with MFL’s representatives and—until now—no publicly disclosed financial details. The ownership consortium has been jointly negotiating with the city and the CFL on plans for a new expansion football franchise and a place where the team could play. Securing one has been conditional on securing the other.

According to HRM’s staff report, the city would partner on capital costs to construct the 24,000-seat stadium—buffered by surrounding mixed-use commercial and residential developments—and possibly partner with MFL for ongoing repairs and maintenance work. Initial construction estimates fall “in the range” of $170 to $190 million.

City hall would cover those costs by creating a Tax Incremental Financing model. Property taxes from the new stadium and surrounding buildings would be redirected from general operations and instead be put towards a $10-million annual payment for debt financing. It’s the same model HRM uses for the Nova Centre to try and recoup its annual payments for the Halifax Convention Centre.

The biggest risk factor, however, is that a TIF is incredibly susceptible to changes in property valuations, real estate trends and other external factors. It’s why tax revenues from the still virtually empty Nova Centre are now expected to be $25 million less than original estimates.

Another concern, says the report, “would be that the proposal simply shifts development from one area of the municipality to another and as a result, there would be no incremental tax revenues.”

The city will the province's authority if it wants to create a new TIF and put a special property tax agreement on the stadium. More importantly, both MFL and HRM will also need the province to come on board as a funding partner.

Premier Stephen McNeil previously has shot down that idea unless a new source of revenue could be found to put towards a stadium. City staff are now proposing that money could be taken from an increased tax on hotel rooms and a brand new tax on car rentals to cover the costs.

Maritime Football Limited claims a new stadium will contribute $171 million to Nova Scotia’s GDP and create 1,951 full-time job equivalents. Football operations would bring in another $97 million to HRM’s GDP, claim the business owners.

Of course, all of these arguments have been heard before. Shannon Park has been proposed several times in the recent past for a stadium; always unsuccessfully.

In 2006, HRM paid $2.4 million for a report on the feasibility of a 25,000-seat stadium on the site as part of the city’s failed Commonwealth Games bid. Five years later, the city tried again. Council spent another $500,000 on a consultant’s report to see if a stadium could be built in time for the 2015 FIFA Women’s World Cup. It couldn’t.

“Stadiums on their own only have the potential to create a small amount of new spending that would not have otherwise occurred and instead redistribute spending that would have occurred elsewhere to the area surrounding the stadium,” reads the staff report from years ago.

In 2012, council asked staff to buy 40 acres of the former Department of National Defence lands for future stadium use. By 2015 those plans had evaporated and the city began planning for Shannon Park to be redeveloped as a “future growth node,” creating a compact community and potential housing for 7,000 residents. The city also recently offered to sacrifice the land to Amazon during a failed bid for the e-retailer’s new corporate headquarters.

Shannon Park’s 95 acres were used for military housing from the 1950s until 2003 when the site was declared surplus. Canada Lands Company currently owns the property and has been consulting with both HRM and MFL about possible redevelopment scenarios. 

This latest staff report says CLC will need to see a public engagement process from the city before supporting the stadium proposal.

The Millbrook First Nation, which is purchasing nine acres of Shannon Park to add to its ancestral reserve lands next door, will also need to be engaged in the stadium process and confirm its support before the idea moves forward.

If council votes for the business case analysis on Tuesday, HRM staff will also have to factor in what impact the new stadium district could have on roads, transit and housing, a growing concern that the chosen site is vulnerable to storm surges and rising sea levels, along with all other “assumptions underlying the business plan.”

Only five percent of residents ranked a new stadium as their top infrastructure project, according to an HRM citizen survey conducted this past summer. Polling conducted by CRA for Maritime Football Limited during the same period “suggests” 63 percent of HRM residents support a stadium being built with financial support from the public.

Maritime Football Limited plans to launch a season ticket campaign for its non-existent team next month, with average ticket prices ranging from $40 to $60.

According to MFL’s polls, 50 percent of residents say they would either definitely or probably attend at least one CFL game in Halifax.