City staff recommend building new 'right-sized' arena downtown

City staff are recommending that a new "right-sized" arena be built downtown to replace FirstOntario Centre.

In next Wednesday's general issues committee meeting, councillors will review an Ernst and Young report on the city's entertainment venues.

Its most significant finding was that FirstOntario Centre is far too large for Hamilton.

In its final recommendations, the report says "a 'right-sized' facility with a 10,000 capacity would best serve the Hamilton market's demand from a capacity and programming perspective." 

This starkly differs from the centre's capacity of 17,400 people — a capacity that isn't often met.  

The report found that attendance at the venue for all events, including Hamilton Bulldogs games, concerts, and various special events, averaged around 4,991 people in 2018. When looking at just concerts, this number jumps to 9,140. 

That same year, only 13 of 98 events required use of the upper bowl seating.

In December 2017, councillors approved that a third-party study be undertaken to evaluate the needs of venues and explore the options of divesting or relocating venues downtown. 

In a letter to councillors, the director of economic development Glen Norton said that the ultimate goal was to find out how to "incentivise the private sector to undertake the redevelopment and operation of any/all entertainment assets" and/or to "strategically divest of any/all of the entertainment assets." 

The report gave recommendations on Hamilton's FirstOntario Centre, FirstOntario Concert Hall, and the Hamilton Convention Centre. 

In his letter, Norton said that staff are recommending a "three-phased entertainment renewal strategy" put forward by Ernst and Young, which includes building this new arena. 

The report said that the new arena "is assumed to be built on another site in the immediate vicinity within downtown Hamilton."

The option is a multi-million dollar affair. It's estimated that land acquisition costs would be around $35 million, and construction costs are estimated to be between $115 and $130 million. 

The report gave a five year timeline for the project, with an estimated opening in 2023.

Michael Andlauer proposes new arena at Lime Ridge Mall

Norton also mentioned that the city received an unsolicited new arena proposal in mid-August.

The committee will also review it at the Sept. 4 meeting. 

While the city says the proposal will remain confidential, Michael Andlauer has gone public with his intention and excitement about building a new arena at Lime Ridge Mall. He is partnering with Cadillac Fairview, the owner of the mall.

Sam Merulla, a Ward 4 city councillor, said that Andlauer has been pitching the idea for a while, but that his vision wasn't part of the city's plan.

"Ultimately, we're saving tens of millions of dollars by what's being proposed downtown," he said. "That isn't the same deal [with Andlauer's proposal.]"

"He is looking for additional monies and we're not interested in getting into the arena business whether it's Lime Ridge Mall or elsewhere if it doesn't eliminate our capital and operating [expenses]." 

Ward 2 councillor Jason Farr wants to keep everything in one place.  

"I think it makes complete sense to keep all of our entertainment assets downtown," he said. "When you start getting involved with the private sector, they don't just make investments in those facilities, but in areas around those facilities."

But that doesn't mean that Andlauer is out of the picture.

"Downtown is not off the table either for Michael Andlauer," he said. "We just need to continue to work with him. He's a valuable partner…he will consider all and every option."

Convention centre events would move to former arena space

If the city follows through with the recommended three-phase plan, Ernst and Young estimates that Hamilton Bulldogs' attendance would increase by 50 per cent to around the current OHL average of 5,210 people. The report also projects a 15 per cent increase in attendance for cultural events. 

In this three-phased plan, a new arena will be built on a site of a recommended 3.5 acres.

After it is built, the city is recommending that the former arena site be used to construct a new convention centre. 

The report said that having a larger convention centre would open up Hamilton to compete for provincial and national business. 

If all operations are moved over, the existing lands of the convention centre might be sold or redeveloped, subject to demolition. 

And while the report explores the option of renovating the arena, it recommends against doing so. It says that it would require $54 million to return the building to its originally intended condition, and that its revenue would not outweigh municipal subsidy requirements. 

In the letter to councillors, Norton said that priority was given to options that involved the downtown core and position the city to meet their objectives.

In a message to CBC Hamilton, Ryan McHugh from the economic development department at the city said that "the strategy recommended in Ernst and Young's report, which will be going to the General Issues Committee next Wednesday, does not recommend the divestment of any of the city's entertainment assets."