A letter to the editor regarding the proposed multiplex

Letter to the editor, Penticton Herald: Feb 2004

I applaud our mayor and council for their determination to invest in public infrastructure and for their willingness to consider risky, controversial proposals. Oddly, the largest and riskiest proposal so far—the $30 million sports and entertainment complex at Queen’s Park—has attracted less public scrutiny than the pros and cons of burning rubber on Lakeshore Drive. The apparent lack of dissent surprises me because I believe the arena proposal rests on some shaky assumptions and the decision process itself appears flawed. It is probably worthwhile to voice some concerns now given our history in this province of paying dearly for shaky assumptions and flawed decision processes.

Let us first consider the decision process. Much of the enthusiasm for the sports and entertainment complex appears to be contingent on receiving Legacies 2010 funding. Of course, this is not free money. Our federal and provincial governments are committed to covering just over half the cost of the 2010 Olympics and the Legacies 2010 funding is simply tax money that is being used to offset some of the massive flows of public investment into Vancouver and Whistler. Although it is not necessarily a bad thing for governments to use our own money to buy our acquiescence, we should expect the money, like any tax revenue, to be allocated to the highest priority projects in our communities. Moreover, we should expect the process for setting these priorities to be transparent and inclusive. Instead, the impression I get is that the city is rushing the planning process because “[it] believes by being among the first to make a presentation to the government, it could have an inside track in acquiring some of the Olympic legacy funding” (Mayor Perry quoted in “Olympic Dream: City commits 25,000 to arena study”, 13 Jan 04). Mayor Perry may be simply reacting to the reality imposed on him by another level of government, but this begs the more fundamental question: How does an allocation scheme that pits municipalities against each other in a race to spend tax money serve the public interest?

My second concern is the proposal itself—two ice rinks at Queen’s park. My informal sampling of hockey parents suggests that ice is indeed in short supply in Penticton. However, it is important to recognize that the current shortage is due in large part to a demographic anomaly that pits a massive cohort of baby boomers playing recreational hockey against their own children (also a large demographic cohort) for ice time. David Foot, a University of Toronto demographer, pegged 2002 as the peak year for hockey in Canada (“Boom, Bust & Echo”, p.112). Foot’s advice to municipalities in 1996 was unambiguous—do not overbuild ice capacity to satisfy a one-time demographic bulge (unless, he remarked, the rinks could easily be converted to curling, which he identified as an up-and-coming baby boomer sport). Put another way, it makes little sense for our school district to close an elementary school due to dropping enrollments while our city council doubles our capacity for minor hockey.

Don’t get me wrong: I have a son who will soon start minor hockey and I, too, would like shiny new facilities. But I would also like a new dance studio for my daughters, better soccer fields for all my kids, and more than anything, a great big wave pool (the pool at least has the virtue of being something we can do year-round as a family). This issue, however, is not of wants, but of priorities. And our priorities in this community have to be consistent with our demographic reality. According to data from the 2001 census (available on the Statistics Canada website) we need to face two facts. First, 24% of the population of Penticton is 65 years old or older whereas this age group constitutes only 13% of the population of Canada. The difference leads me to conclude, not surprisingly, that Penticton attracts a disproportionate number of retirees. Second, the absolute number of people aged 65 and older in Canada is projected to grow by 9% by 2006, 23% by 2011 and 45% by 2016. Combining the baseline growth of retirees with the hypothesis that people like to retire here means that 45% is a lower bound on the increase in the number of senior citizens in our city. And you think the parking lot at Art Knapp’s is busy now? My thinking would be different if our core infrastructure was adequate to meet the challenges of an ageing population. However, not only are our museum, library, walking trails, and swimming pool inadequate for our current population, but also our hospital, long-term care facilities, and overall health and support infrastructure. It is not clear to how a $30 million entertainment complex solves any of these problems.

Of course, the question of prioritizing our public infrastructure investments is moot if the sports and entertainment facility is self-supporting or leads to sustained economic growth. The projections outlined in “Arena plans unveiled”, 29 Jan 04, suggest a total attendance of 428,000 per year. This works out to just over ten events per year for each person in the Penticton region (mostly on Tuesday and Wednesday evenings, it should be noted). Even if these numbers are realistic, they tell us nothing about the net economic benefit to the community. As economists Roger Noll and Andrew Zimbalist have pointed out, much of the economic analysis that accompanies stadium proposals ignores the effects of substitution on discretionary spending. Put simply, a new stadium does not mean that people automatically have more money to spend on entertainment. Thus the money earned at the gate of the stadium is not new growth; it is simply a slice of people’s entertainment budget that is not being spent at restaurants, bars, theatres, and other local business. Increased consumer choice is a good thing, but we should not confuse it with meaningful economic growth.

In short, I think the proposed sports and entertainment complex is a nice idea, but an idea that is ultimately at odds with the unique challenges we face as a community in the next couple of decades. Personally, I would like to see the mayor and council be more explicit about the relative merits of other uses for any Legacy 2010 funding that may come our way. And if the project does go forward, I think we will need to see much better economic justification for our $30 million investment.