Tuesday, March 2, 2010

A Domed Stadium in Regina - The Mirbel of the new Millenium

Yesterday a report was released on the feasibility of a domed stadium in Regina. The report, which cost $1,100,000, says it is feasible to have a domed stadium in that city. They clearly have a new definition of the word feasible that I was unaware of. In this feasible means that it might able to cover operating expenses, not the cost of construction or the cost of repairs and renovations.

The stadium would seat 33,000 for football games and 53,000 for concerts. The report says that if the stadium hosted 31 events a year, 11 of them CFL football games, four high school or university football games, eight concerts, and eight other events like monster truck, the stadium could pay for its operation and make some money, though the first year of the profits would only just cover the cost of the feasibility study. This means Regina would have to be hosting 20 top flight concerts per year every year for the foreseeable future.

The Regina areas has a population of 206,000, add in Moose Jaw, Weyburn, and small towns you still only get to 250,000 people living within an hours drive of the stadium. Saskatoon is 260km away, yes Roughrider fans will drive that 11 times a year, but for concerts as well? I can not see how a stadium this size makes any sense in Regina.

The cost estimate:
  • $386 million open roof
  • $431 million retractable roof

That is a lot of money. Given the type of capital project, research shows that these sort of projects are almost always well over budget. Realistically the people of Saskatchewan should be prepared for a cost of $460 to $600 million for the stadium. This is on par with total government funding of venue construction for the 2010 Winter Olympics. The best way to find out if the costs are reasonable is to make a request for proposals for a P3 for the stadium, if no one bids that says a lot about the costs.

The cost of this stadium would be on a par with what Saskatchewan spends on the Ministry of Agriculture in a year.

The $1,100,000 feasibility study was paid for by the City of Regina, the Roughriders, the provincial government and the federal government. Only one of these is not the taxpayer and they are only contributing 10%. Frankly I could have done this report for them in under two weeks and for less than $25,000. I have not got the fainest idea what the consultants needed the money for or how they managed to come up with a 5 cm thick report. OK, I know why it is a thick report, something had to look like it was weighty enough to justify the wildly high priced study.

Why could I do the study so cheaply and so quickly? It is clear to me that there are serious flaws to the whole concept any one of which should be a feasibility red flag.
  • The capital cost is too much for any possible benefit
  • The population is much too small to support the stadium given the cost
  • There will never be enough events per year drawing enough people to cover the operating costs
  • The ongoing repair and maintenance costs of the stadium will be prohibitively expensive after about 10 years.

This study looks and feels like one of the classic federally funded ones - the answer has to be yes.

The earlier Stadium Concept Review was very poorly done. The comparisons it was using to justify the stadium were all smaller in size. It estimated the cost to be $350 million with a retractable roof, maybe. The review was not clear on that. The study claims economic benefits of building the stadium that are completely without any evidence. They hold up the FargoDome as an example. It is much smaller in size, half the size of the proposed Regina Stadium. It manages an average attendance at events of barely 4000 people. This should have sent up immediate alarms bells, this 19,000 football, 27,000 concert seat stadium is mainly almost completely empty for events. The report numbers on the FargoDome indicate that the stadium pulls in about 2.3 visits per resident per year.

Most of the economic benefit identified by the feasibility study is during the construction. Let me borrow half a billion dollars and I could do better in job creation than the stadium could during construction. The thinking is so bizarre that I can not even fathom the doublethink going on to justify the lunacy.

I am assuming that the stadium would sell out for the 11 CFL games each year, but I can not see how the stadium will attract the crowds needed to come close to filling it otherwise. Based on the numbers in the feasibility study, everyone within an hour drive of Regina would have to go to six events a year at the stadium. That will not happen, it is an assumption. The feasibility report speaks of 500,000 people a year attending events, of those 363,000 will be going to Riders games and only 137,000 to the other 20 events a year, or 6850 people per event. Why do you need a 55,000 seat stadium for 6850 people?

Right now Taylor Field can seat just under 31,000 people which can be expanded to 55,000 with temporary seating. There have been some big name concerts in Regina which have sold out, most notably the Rolling Stones in 2006. The proposed new stadium would not have a large capacity than what is possible now. The cheap option, no retractable roof, would not be able to operate for more days in a year.

If Regina were hosting 20 to 30 major concerts a year, there could be a case that the stadium would be used to the degree the feasibility study says is needed, but that is simply not happening. At 31 events, the place will sit empty a lot of the time. How many events has Regina missed out on because of only having Taylor Field? It was good enough for the Stones.

Much of the discussion in favour speaks of the stadium being an big economic driver. The economics are simply not there. Any money spent by people going to events at this stadium comes from other entertainment they would go to. When a big band comes to town, almost all the money spent leaves town. Large stadiums are economic drains for cities, the problem is that for a host of reasons large cities have to have stadiums. The sale of the SkyDome in 2004 gives us an idea what a domed stadium is worth - $25 million.

SkyDome, build for $570 million almost 20 years ago is only worth a tiny fraction of that. A Regina Stadium would be worth $10,000,000 the day after it opened, Saskatchewan would see a net drop in provincial net worth by around half a billion dollars on the day the stadium opens. This stadium will make the BC FastFerry program look like an economically smart idea.

The lifespan of the three domed stadiums in Canada has not been that long at all. BC Place is closing in on 30 years and is requiring a lot of money to be injected to keep it going. The Montreal O not only cost a huge amount to build, but it has needed constant repairs for the last 20 years. There have been suggestions the SkyDome needs replacing.

Few domed stadiums in North America have managed to last for more than 40 years. The Astrodome(65-04) is closed, so is Veterans Stadium(71-03), the Kingdome(76-00) has been razed the same with the Hoosier Dome(82-04), Busch Stadium (66-05) Giants Stadium(76-10) is being demolished right at the moment. None of these facilities lasted more than 40 years.

With a 40 year lifespan, the capital cost amortized over that time means an annual cost of around $11 to 15 million dollars a year for construction alone. That is a $22 cost per person attending events at the stadium IF it is used significantly more than Taylor Field.

To put this in clear terms, the consultants of the feasibility report think it is feasible project because a subsidy from taxpayers of $22 per ticket for every event for the next 40 years is a reasonable.

If any Federal government money goes towards this project, I simply can not vote for the current government. Only a finance minister that was a fiscal moron would allow this to go ahead.

I am not the only questioning this the NDP, the Taxpayers federation and some good comments from blogger Jordon Cooper
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