Harrison Graham – VP Recruitment of the Real Estate Student Association
I promise you, if John Krasinski can find Some Good News in his chaotic country, Albertans can too. Regarding our economy, we feel the constant berating from our neighbors to the east and west. Compounded by rivalling Petro-factions overseas dumping the price of oil, most Albertans find comfort in the strongman leadership of Jason Kenney willing to fight everyone to make a fair oil & gas marketplace again. While it will be amusing to see if Alberta qualifies as a ‘have not’ province, I’d argue it is our municipal leaders who see the writing on the wall in terms of fixing an economy.
Albertan oil is the cleanest produced in the world and we welcome the day when we can sell it a reasonable price, but Alberta’s triple threat economy cannot wait on nor rely on a fair market at which to sell. This is why we see our mayors, councillors, and business leaders pushing to diversify. Calgary’s Mayor Nenshi has seen various technology and entrepreneur niches sprout in his city, saying now is the time to diversify in a way that will help these innovators grow. “As we prepare Calgary for the future, solidifying our role as the ultimate host city will be a major driver of jobs and economic activity.” Mayor Nenshi is referring to the BMO expansion and River District revitalization project that will be ongoing until 2024. I ask the question, what is a host city? Does a renovated entertainment district diversify an economy? And what deliverables ensure the city’s financial recuperation? Let’s dive in y’all.
In their Economic Impact Assessment of the River District Revitalization in Calgary report, Ernst & Young summarizes the city’s vision for Calgary being a place to make a life in work, play and living. Explicitly, Calgary should be prosperous, fun, and beautiful. Implicitly, Calgary should be vibrant enough to attract tourism and business alike, away from competing regions. This is the focal point of pro-revitalization advocates. Calgary has potential that is not being utilized. A venue that is too small to host large concerts sees Calgarians traveling to Edmonton to spend money. Calgary companies find themselves traveling to other convention cities to present in capacity appropriate venues. Calgary’s festivals are limited by their space. If you were at the 2019 Stampede, you remember how crowed the midway was. And the neighboring east side’s decrepit state repelled river walkers and businesses, causing land values to slip.
East Village was the first phase of the River District’s revitalization. Making a safe, clean neighborhood with first floor retail open and visible through walls of glass changed the entire perception Calgarians and visitors had of the old site. From here, mixed use residential turns into hospitality developments, within close proximity to the Art s Common, Central Library, National Music Centre, Fort Calgary, and Stampede Grounds.
I feel now is a good time to clear up a misconception I believe many Calgarians have about being a ‘tourist & host city’. Places like New York, Paris, and Rome are staple vacation spots. You go there to see their star attraction(s). Calgary – maybe aside from the Stampede – has no internationally renowned star attraction. The majority of Calgarian tourism is domestic. The Calgary Airport Authority’s statistics on incoming (not returning) travellers indicate 69.67% domestic, 20.33% transborder, 09.99% international (Tourism Calgary, 2019). People are following a show, coming for an event, or seeing a friend or speaker. While they are here and have downtime, they may decide to check out our library, zoo, or bars. This is where millions of dollars are infused into Calgary’s economy, with these dollars becoming the rational for renovating Victoria Park. Calgary’s tourism advantage is hosting events and shows, with the city’s focus now on increasing capacity and quantity of such. A spillover of spending by these attendees will then stimulate our local economy.
East Village’s revitalization in and of itself attracted approximately $3 billion of private investment and $400 million municipal infrastructure investment (CMLC, 2020). Acting as a mild stimulus and creating hundreds of construction, real estate, and service jobs, can we expect the same recuperation from the entertainment district’s infrastructure investment?
On the events centre, Calgary’s Saddledome is a great building. Old, yes, and from what groupies have told me about the backstage, it looks more like a honky-tonk than a concert centre. Luke Combs no doubt felt at home, but I can’t see Ariana Grande using a stall without a door. More than that though, the primary limiting factor for musicians is the Saddledome’s stage design and capacity for concert equipment that performers bring. The Saddledome’s ceiling weight capacity is roughly 80,000 pounds in the summer and 40,000 pounds in the winter (Low, 2019). Drake’s 2018 concert came with 200,000 pounds of sound and lighting equipment. Needless to say, Drake would’ve broken the saddle, leaving the Flames to ride bareback for the rest of the season. But how much is Calgary missing out on when it comes to these shows?
The Guardian established that approximately 15% of a show’s gross revenue goes to operate the venue (Forde, 2017). Billboard estimated Ariana Grande’s shows averaged $2.13 CAN million per show in Canada & the US (Beat, 2020). Approximately $321,000 CAN in wages and expenses for electrical engineers, security, stagehands, medical staff, spotlight hand, ticket scanners, caterers, transportation, furniture, forklifts, rigging, and sound went to Edmonton businesses, not Calgary ones. Consider that Edmonton hosted more than 25 shows that Calgary was snubbed on. This is a crucial industry that Calgary is neglecting. My mind goes to the thousands of displaced oil patch workers who struggle to find work. Calgary has a skilled and disciplined workforce. All we need is a consistent events schedule and a venue built to modern performers’ needs.
I am also going to take a minute to differentiate my arguments. I am arguing that Calgary would benefit from an events centre. It’s a faster drive to Calgary, from Regina, Lethbridge, and Red Deer, than Edmonton. I am not saying that there are not better things to spend money on, or even that it is the right time to build. But answering the questions I laid out in my introduction, yes, this events centre will recoup the city’s investment and shows economic revenue, employment, and entertainment (both musical & sport) deliverables.
The BMO expansion was the only project I was hesitant in seeing investment recouped. My background is in real estate and conventions I’ve attended, like the Calgary Real Estate Forum, are always held at the Telus Convention Centre. The only time I have been to the BMO centre is to watch the dogs during Stampede and to go to Calgary Comicon with my sister. So, I asked my mum, who is a long serving manager at an oil & gas company. What she told me was similar to the argument for the entertainment centre restructuring. Conventions cannot operate in Calgary to the capacity that many other host cities do, specifically those drawing an international participation. Dana Peers of the Calgary Stampede Board says, “When complete in 2024, the expanded BMO Centre will provide Calgary and southern Alberta a significant platform for economic diversification through growth in both the convention and tourism industries.” A platform doesn’t guarantee conventions though, so what events can/will Calgary attract?
Through my research, I’ve accrued a cynical bias toward the convention centre. For example, the token convention of 2023 – the World Petroleum Congress, estimated to bring in $65 million into Calgary’s economy and fill 22,000 hotel rooms over a week (Small, 2019) – won’t feature the new BMO centre, as completion is set for 2024. I argue that the BMO is unnecessary if conventions like these can already be secured. Other conventions, like the aforementioned Real Estate Forum, the Agri-Trade Equipment Expo for farmers, the International Pipeline Exposition, Otafest (amine), or Calgary Career Fair are too small to rent a tier-one convention centre like the planned BMO centre. Thinking back to the 2018 Calgary Comicon, there was nowhere near enough panellists or speakers to fill the many breakout rooms that Calgary Stampede boasts about building.
Optimists retort. Without the expansion, the 2025 international Rotary Convention, which is estimated to bring 25,000 visitors, would not be Calgary’s. And the BMO’s 2016 utilization rate (of 73%) was well above the Canadian average for convention centres (58%), according to the Calgary Herald’s Annalise Klingbeil. Surely a larger convention centre will attract even more events and if not built now, then when?
2016 was before the oil crash, global pandemic, and looming recession. How many other conventions are now guaranteed? Their logic is, if you build, they will come, but is our city willing to stake $500m – $333.3m of which is a loan from the provincial government (City of Calgary, 2020) – on that? CBC’s Richard White summarized the situation well in saying, “Sure, we will get the odd World Petroleum Show and Rotarian Convention, but to be a Tier 1 city (like Montreal, Toronto and Vancouver) you need to attract major events every year” (White, 2019). The new BMO, if anything, will compete with the close by Telus Convention Centre & MacEwan Hall at the University of Calgary. Unlike the events centre, which I can confidently argue will have a consistent schedule of occupying concerts and events, I struggle to see deliverables or reasons, besides an economic stimulus fitting into the provincial economic recovery plan, to expand the current BMO.
Ernst & Young reported that the River District revitalization would infuse an estimated $1,701 million, during construction, and $297 million, operating annually, into Calgary’s economy (Ernst & Young, 2019). And when presented in large font on flashy charts, these numbers sound impressive. But revenues (in cash & jobs) are always projected for the revitalization project in entirety, which I argue misleads the public and coerces councillors into an all or nothing deal. Each project of the River District revitalization (Arts Common, BMO Centre, East Village, Events Centre, Victoria Park) should be evaluated separately on the incremental value they bring to the city. I see utility in the new events centre and question the necessity of a new convention centre. Both, for the reasons of local demand for events (concert vs convention) and the proximity to competing venues (Edmonton vs 3 blocks away). As a whole, the River District’s revitalization will recoup the city’s investment and has clear deliverables. Though if we look at the revitalization as one project, council did not approve the most efficient project. And oil centric Albertans more than anyone, having to cut and save in recession after recession, should understand the necessity of efficienct of spending. Will the expanded BMO centre get more use than the Blue Ring? Time will tell.
References
CMLC. (2020). East Village Projects. Retrieved from https://www.calgarymlc.ca/east-village.
DCN – JOC News Services. (June 12, 2020). Expansion design for Calgary’s BMO
Centre unveiled. Journal of Commerce. Retrieved from https://canada.constructconnect.com/joc/news/projects/2020/06/expansion-design-forcalgarys-bmo-centre-unveiled
Eamonn, F. (January 30, 2017). Where concert ticket money goes: who's getting rich off live music's golden age? The Guardian. Retrieved from https://www.theguardian.com/music/2017/jan/30/where-does-concert-ticket-money-go
HLT Advisory. (2018). AN ANALYSIS OF NEW AND/OR EXPANDED EVENT AND CONVENTION FACILITIES IN SASKATOON. Retrieved from http://sasktelcentre.com/docs/eWvSgb7aASpQ8vWYWEUqKsXoOC/Final-Market-AnalysisReport-March-2018.pdf
Klingbeil, A. (May 18, 2016). $500 million Stampede expansion plans would double size of BMO centre, see Corral demolished. Calgary Herald. Retrieved from https://calgaryherald.com/news/localnews/500-million-stampede-expansion-plans-would-double-size-of-bmo-centre-see-corraldemolished
Ontario Ministry of Tourism. (2008) Ontario Convention Market Analysis Final Report. Retrieved from http://www.mtc.gov.on.ca/en/publications/Ontario_convention_market_analysis_study.pdf
Tourism Calgary. (2019). Destination Report. Retrieved from https://www.visitcalgary.com/sites/default/files/2020-03/FINAL%20%20Tourism%20Calgary%20-%20Q4%202019%20Destination%20Report.pdf
White, R. (July 16, 2019). $500-million BMO Centre is not going to turn Calgary into a top-tier convention city. CBC. Retrieved from https://www.cbc.ca/news/canada/calgary/road-ahead-conventioncentre-trade-show-funding-1.5212244