News that Markham wants to build a 20,000-seat arena brought four words to many GTA residents’ minds:

National. Hockey. League. Franchise.

Buzz that the facility is skate bait only increased after non-denial denials from the private group that will run the facility and provide half the construction costs. Town council votes Thursday on whether debt-free Markham should borrow $162.5 million for the other half.

But the hockey hubbub misses the bigger conversation.

For five years, Markham has been engaged in a feat of city-building with few obvious precedents in North America: constructing a downtown from scratch. If successful, it could redefine what suburban means and put Toronto’s pricey, gridlocked core to shame.

“It’s big,” says Richard Florida, director of the Martin Prosperity Institute at the University of Toronto. “One of the very biggest I have seen.”

The arena is a small but important piece of the puzzle.

“It would be an anchor,” says Markham Councillor Valerie Burke. “Many of the northern municipalities have been seen as bedroom communities.” A new arena could change that.

But while arena-building is a popular way to boost a city’s cachet, it is a risky one.

“Every major city in North America that has built a new sports facility and attracted a new team over the past 40 years (has found) zero tangible economic benefit,” says Brad Humphreys, a sports economist at the University of Alberta who consulted with Markham on the arena.

For decades, Markham has been planning to create a downtown where there was none before. Because the town was cobbled together from three smaller municipalities, it never had a natural core.

Nearly 400 hectares of vacant lands straddling Highway 7 provided an opportunity.

A big chunk of that area was owned by development company Remington Group, whose chairman is Rudy Bratty.

Remington and the town hashed out a downtown core to rival any forward-thinking metropolis, with high-density dwellings, dedicated transit lanes, and ample green space. In 2007, a 20-plus year construction process began.

The private group behind the proposed arena, GTA Sports and Entertainment, includes Bratty — the facility is nestled into part of downtown — and W. Graeme Roustan, chairman of Bauer Performance Sports Ltd., who helped bring the Sharks to San Jose and once tried to buy the Montreal Canadiens.

The arena, and any sports team it might attract, anchor Markham’s ambitious project.

All parties involved in the arena have publically insisted they would be content to host concerts, cultural events and the occasional amateur sporting event.

But according to a confidential report obtained by the Markham Economist & Sun, one of the Star’s sister papers, the town is concerned the arena’s private operators will not be able to make their rent without a franchise, and want a termination clause in case no NHL team materializes.

A professional sports team would clearly be a coup.

But will it be good for Markham?

As Humphreys points out, a large and expanding body of academic research shows that arenas are not the boost they might seem to be.

Humphreys, who was hired by Markham as a consultant to evaluate the town’s financial contribution, said he could not comment on the specific advice he gave.

But a report prepared by town staff echoes his basic point: that “building such an event facility does not generate significant tangible economic benefits for cities.”

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As Humphreys explains, most consumers have a fixed budget for entertainment spending. A Markham resident who pays for a ticket to see the new hockey team play is probably not going to buy a movie ticket that week too. If she buys a jacket from the new team’s store, she’s not going to buy another jacket on Main Street.

The largest benefit of an arena, both Humphreys and the report agree, are intangibles: civic pride, a heightened sense of community.

“There are very few ways for a community to put themselves on the map,” says Humphreys. Sports is one of them. “Because there are a limited number of franchises, it has a cachet.”

The report concludes by saying that the town’s consultants determined that Markham’s proposed contribution level is appropriate.

But are “intangibles” really enough to sustain ambitious Markham and its vision?

“It all depends on how things shake out,” says Humphreys.

“It’s certainly much better if you have an anchor tenant.”

The stakes are high.

If Markham fails, it could be another Hoffman Estates.

The Chicago bedroom community built an 11,000 seat stadium with the hopes of attracting a sports team. But after seeing a rotating cast of failed and failing minor-league hockey teams, the private operators of the facility bailed, forcing the municipality to take over the arena and threaten a local property tax hike.

If Markham succeeds, it could be another Winnipeg, whose “intangible” benefits from getting the Jets back would probably rival the GDP of Canada.

Or even a mini-Brooklyn, the borough Manhattanites once loved to snub, whose cool status was cemented by the acquisition of the Nets NBA team.

As in Markham, the private group which brought the Nets to Brooklyn and built the team an arena is also building a significant downtown neighbourhood centred around the sports facility.

Says Florida: “Increasingly, it is hard to tell a great urban neighborhood and a great suburban neighborhood apart.”

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