Stadium is a great deal for the City of London (column)
London Community News
Given the angst and anger over the pending name change, there’s no doubt citizens of the Forest City are in love with the John Labatt Centre. And with cause.
Almost single-handedly in the 10 years since it opened, the entertainment and sports complex we affectionately call the JLC has sparked a renaissance in the west end of downtown with a plethora of new restaurants, bars and boutiques, not to mention parking lots.
But lost in the foofaraw over whether we’ll ever get used to calling the place Budweiser Gardens — or more likely Bud Gardens or even The Bud — is the fact we’ve been learning more about the secret contract the city signed in 2001 with the people who built and operate it.
The deal was not made public when the JLC officially opened in October 2002. In dribs and drabs since, we’ve learned who pays and who gains, culminating in the revelation last week that it is Global Spectrum, the U.S. arena management company that runs the place, and not the city which controls the naming rights.
Under the agreement, city council can only reject a proposed name if it is deemed offensive or inappropriate. Budweiser Gardens, while certainly not evoking any historic connection with London even if it is Labatt Breweries’ top selling beer, also is not, strictly speaking, offensive.
The agreement also says the stadium may be named after a person or corporation. That’s a permissive right, not a stipulation. The brewery, therefore, was within its rights picking the name Budweiser, even though for the first decade the name of a real person, founder John Labatt, was used.
So for a secret sum of money — said to be 28 per cent more than Labatt’s paid last time, rumoured to be $5 million — Budweiser Garden is what it will become. All the money goes into the stadium’s general revenues.
What else do we now know?
• A total of $52 million was invested to make the dream of a downtown sports and entertainment facility come true. City taxpayers contributed $32.5 million toward construction costs plus the land, worth $10 million. The rest came from the builder, EllisDon Construction, and the ultimate arena manager, Global Spectrum.
• The stadium is operated by London Civic Centre Corp., which holds a 50-year lease subject to performance guarantees on management and building upkeep. For our money, city taxpayers have very little say in how it operates. A few decisions — naming rights is one — require city council’s concurrence, based on whether the agreement is competitive and represents good value. The city’s concurrence “cannot be withheld unreasonably.”
• The city does get a share of the profits, which have been substantial. In the first five years the share was 20 per cent of net proceeds. In the second five years, which ends this year, the share was 45 per cent. For the remaining 40 years of the agreement, the city will reap 70 per cent of the net proceeds — which should be enough to at least get our money back.
• There’s a final revenue stream, a surcharge of $1.25 on all tickets except for the London Knights. The money pays for building upkeep.
Whatever you call it, the stadium is a sweet deal. So why all the secrecy?
Philip McLeod is a longtime London journalist who writes a regular blog on civic affairs. Email firstname.lastname@example.org.