Baseball stadium in Montreal | Bronfman asks Quebec for hundreds of millions

Stephen Bronfman’s group is asking Quebec for a financial contribution of up to a few hundred million dollars for its baseball stadium project in Montreal, has learned Press. The project is worth a total of approximately $ 1 billion. If the government goes ahead, it will be at zero cost for taxpayers and according to the following formula: part in grants and part in “forgivable” loans.

Tommy Chouinard
Press

Vincent Brousseau-Pouliot
Press

A 1 billion project

Stephen Bronfman’s group is asking for a financial contribution of up to a few hundred million dollars from the Quebec government for its approximately $ 1 billion project which includes the construction of a new baseball stadium in Peel Basin, has learned Press.

Since February 2021, Claridge, Mr. Bronfman’s investment firm, and Groupe Baseball Montréal, the group of business people led by Mr. Bronfman who want to bring a major league baseball team back to Montreal, have requested a financial contribution from Quebec as part of the baseball stadium project at Peel Basin. Mr. Bronfman’s group has never publicly indicated how much money it is asking for.

The Montreal Baseball Group declined to comment on the matter.

According to our information, the Montreal Baseball Group would not have made a single request with a precise figure to the government of Quebec. Rather, the two parties discuss several scenarios of financial contribution. Almost all of these scenarios amount to at least a hundred million dollars. For example, one of the scenarios mentioned amounts to a contribution of approximately $ 300 million for Quebec.

The Legault government, which is studying the request, has not yet made a decision. For months, Quebec has been open to the idea of ​​making a financial contribution, but at zero cost for Quebec taxpayers.

“If, tomorrow morning, there was a baseball team in Quebec, players would pay taxes in Quebec, taxes that we wouldn’t have [sans équipe]. So, if we take part of this tax revenue there and then give it to a company that brings us this company, everyone is a winner. […] We must ensure that Quebec will receive more spinoffs, therefore real tax revenues, than the amount of assistance that would be given to [cette] business, ”said the Premier of Quebec, François Legault, in March. He repeated essentially the same words last month in an interview with TVA Sports.

According to our information, Quebec considers in its calculations the additional tax revenue generated by money coming from outside Quebec (for example, players’ taxes or the QST of American tourists who come to watch a match), and part economic spinoffs, particularly from abroad.

Since the spring of 2019, Mr. Bronfman and his group have been planning to move the Rays from Tampa Bay to Montreal in shared custody. Under this plan, the team would play half of its home games in Tampa Bay and the other half in Montreal. Rays owner Stuart Sternberg agrees with the plan. He would also retain a significant (or even majority) stake in the team. The Rays have a valid lease in Tampa Bay until 2027.

This timeshare team concept is unique: there is no shared professional sports team between two cities currently in North America.

For this project to be realized, MM. Sternberg and Bronfman said a new stadium needs to be built in each of the two cities. No stadium will be built without the assurance that a team will play there – at least for half the season. The project must also obtain the approval of major league baseball and the players’ union.

In Tampa Bay, the Rays spoke publicly in mid-November of a scenario where local governments would pay about 50% for a new stadium in Florida. The Rays are willing to pay around $ 350 million for their new stadium valued at $ 700 million.

Grants and loans

According to our information, the project submitted by Mr. Bronfman is worth $ 1 billion. This sum includes both the cost of building a baseball stadium and other infrastructure in the neighborhood, near the stadium.

Mr Bronfman’s group, which has not publicly released information on funding for his project so far, has never disclosed the figure.

In the most recent public estimate, in 2013, a study commissioned in part by Bronfman put the cost of building a new stadium (36,000 seats) at $ 500 million. Taking inflation into account, we arrive at 585 million in 2021 just for the stadium.

According to our information, if Quebec goes ahead with its financial contribution, it is considering part in grants and another part in the form of conditional repayment loans (commonly called “forgivable loans”).

For the grants, the money would be paid to Mr. Bronfman’s group without any conditions other than the team coming to Montreal. For conditional repayment loans, the money would eventually be converted, in whole or in part, into a grant on the condition that the project meets the parameters of fiscal / economic benefits on which the two parties have agreed.

More details at the start of 2022?

Before making a final decision, Quebec wants to ensure that the project for a baseball stadium in Peel Basin, financed in part by public funds, obtains sufficient social acceptability in Montreal and in Quebec.

At the start of 2022, perhaps as early as January, Mr. Bronfman’s group are planning to make a public outing to give more details on their project. This is the plan right now, but nothing is set in stone.

The last time Mr. Bronfman’s group gave details publicly about the project was in October 2019, when it was presented during the consultation on the future of the Peel Basin neighborhood organized by the Office de consultation publique de Montréal (OCPM).

In addition to the baseball stadium, the Montreal Baseball Group then indicated that it wanted to develop:

• “A green space, a park within the park, accessible to the population, open and inclusive, and whose development will allow several community partners to better serve their clienteles”;
• specialized spaces such as a sports medicine clinic, a community rehabilitation center, an interpretation center for the history of the district, a space for the Panthéon des sports du Québec;
• spaces for community organizations.

In its report made public in March 2020, the OCPM concludes that a second consultation is needed on this “very controversial” stadium project, which should be analyzed “on the basis of a more developed project”. The president of the OCPM at the time, Dominique Ollivier, is now number two in the Plante administration (she is president of the executive committee).

Mr. Bronfman’s group must also meet the mayoress of Montreal Valérie Plante by Christmas, said the office of the mayoress Plante. This will be their first meeting since the re-election of Valérie Plante.

The land coveted by Mr. Bronfman’s group belongs to the federal government (the Canada Lands Company), but the City of Montreal also has a right of first refusal – a sort of veto right – over this land. She must therefore agree in practice for the baseball stadium project in Peel Basin to see the light of day.

The calculation of Quebec

If the Legault government goes ahead, it plans to make a contribution only equal to the provincial tax revenues generated by the project on money coming from abroad (for example, player taxes or the QST on the expenses of American tourists who came to Montreal for baseball), as well as a percentage of the economic spinoffs generated by the project, in particular on money coming from abroad.

According to our information, Quebec considers four factors in particular to assess the impact of the project:

1. taxes paid in Quebec by Expos-Rays players;
2. the tax revenues, for Quebec, generated by the construction of the stadium (a study by the Chamber of Commerce of Metropolitan Montreal estimated this amount at 55.6 million in 2013; this gives 65 million in 2021 dollars with inflation);
3. Quebec tax revenues (for example, the QST) generated by tourists from outside Quebec who come to Montreal to watch the Expos-Rays games;
4. a percentage of the project’s economic spinoffs, in particular those coming from foreign tourists who come to Montreal to watch baseball games.

Quebec has not decided on which horizon it would calculate the tax benefits of the project. Last March, Prime Minister François Legault spoke of a five-year horizon.

Under the tax rules, future Expos-Rays players would pay about $ 4.25 million in Quebec taxes per year, according to calculations by Press (assuming a payroll of CAN 75 million for the team; that of the Rays was CAN 71 million at the start of the 2021 season).

And in 25 years?

For Quebec, Expos-Rays players would generate approximately $ 106 million in tax revenue over 25 years (without taking into account wage inflation), according to calculations by Press. By applying an annual inflation of 3% of wages, we arrive at tax revenues of 155 million over 25 years, according to the calculations of Press.

A 2013 study, funded by the Chamber of Commerce of Metropolitan Montreal, Claridge and other business people, estimated Quebec player taxes at 9.8 million / year for a full-time team. For a timeshare team, this figure would decrease to 4.9 million / year in Quebec taxes – thus substantially the same result as the calculations of Press (4,25 millions/an).

Since 2013, Mr. Bronfman’s group has not publicly quantified its estimate of the economic and fiscal benefits of its baseball team project.

In practice, the vast majority of a major major baseball team’s payroll of US $ 75 million is paid for by domestic major baseball broadcast rights revenues, primarily US broadcast rights. The firm Ernst & Young, which conducted the 2013 study for the Chamber of Commerce and Business People, estimates that each major league baseball team in 2014 received at least US $ 60 million as a share of national broadcast contract revenue. matches.