Announcing the New Quebec City Arena…

Big news out of Quebec today.  The Province of Quebec and the Quebec City government announced formal plans to build a new arena in Quebec City.  The new facility will be 100% publicly financed, with the province and the city each picking up half of the cost.  The plan is to build the arena in hopes of attracting an NHL franchise back to Quebec City, which has been without a franchise since the Nordiques left for Colorado in 1995.

Kids, don’t try this at home.  Building an arena before you have a major league tenant under contract is not for amateurs.   It should only be attempted by politicians with deep pockets and a poor understanding of the economics of professional sports leagues and teams.  Consider, for example, the Sprint Center in Kansas City which was constructed on the same premise.  It opened in 2007.  I checked the schedule today and Kid Rock, Monster Jam Freestyle Mania, and the world famous Lipizzaner Stallions are going to be there in the next few weeks!

The new Quebec City Arena has “Epic Fail” already pre-stamped all over it.  Consider:

  • The current estimated cost is $400 million “with a 75% margin of error.”  I give them credit for attempting to fess up in advance for the inevitable cost over-runs.
  • The last I heard, the facility was going to be made out of wood. ( “We want it to be one of the most important buildings in the city of Quebec,” said François Moreau, whose company ABCP Architecture is in charge of the project. “A symbol for the city. So what we have designed is to have something that reflects the attractiveness of the city of Quebec. It’s going to be the tallest structure being built out of wood in North America.”)
  • The City of Quebec still has to borrow $125 million to finance the construction (based on the $400 million price tag, not the actual price tag).
  • The mayor says he will finance his share of the construction by eliminating 500 city jobs.   This has to be one of the best hypothetical examples of opportunity cost that I have ever heard of.  I wonder how long it will take before he realizes that his job may be one of those eliminated?
  • NHL Commissioner Gary Bettman has already said: “”I don’t want anybody getting excited…in the conversations that I’ve had with a variety of people, including the Mayor and the Premier, we have said we’re not planning on expanding. We’re not planning on relocation. So we cannot promise [Quebec] a franchise.”

Bettman can’t promise a franchise.  But I can promise that if the arena gets built, the people who try to negotiate with a potential NFL franchise owner will have the weakest bargaining position possible.  And I can promise that any existing NHL franchise owner who wants a new facility (“Paging Darryl Katz and N. Murray Edwards”) will be eager to speak with these gentlemen from Quebec.

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Author: Brad Humphreys

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3 thoughts on “Announcing the New Quebec City Arena…”

  1. “The mayor says he will finance his share of the construction by eliminating 500 city jobs.”

    How ridiculous but I guess if those city jobs are expendable, just eliminate them and don’t build the arena.

  2. What an incredibly poor decision by both levels of government. I’m left to wonder how much money Stephen Harper may be funneling through the back door in support of this ill-advised project.

    I thought Canadians were smarter than this but I guess not.

  3. Making the arena of wood seems like a good idea. The city can always sell it for fire wood after it sits unused for several years.

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