[liamenator]

Originally Posted by CaptainYooh

Giant real estate development projects in relatively small real estate markets are rarely successful. There is just not enough critical mass to support them. Edmonton Ice District is a very good benchmark comparison. While the new arena is beautiful and 50% taxpayer-funded, it did not spark the area redevelopment, but merely catalysed a few new buildings. It is still a dump and will be a dump for many more years. In these markets, only prolonged periods of strong economy and strong job market encourage high in-migration, which in turn promotes higher real estate demand supporting larger-size developments.

NHL franchises are great investments on their own merits due to its cartel structure and reasonably high interest in pro-hockey in several markets. Plus, as evidenced around the whole world of pro-sports, team ownership is a highly sought after status symbol for super-wealthy.

Well, I just don't think you can generalize in this way. Each development project is specific to the location in which it exists. We can't just look at population sizes and then assume it's apples to apples. The comparison with Edmonton doesn't hold on at least two fronts:

• LeBreton Flats is not a giant development plan that puts all its eggs the arena basket to catalyze activity in a currently under-utilized or undesirable area, and it's not about remediating an old industrial zone. This makes it different from Edmonton. If memory serves (happy to be corrected here), the area of E=NG's downtown where ICE district is being developed was a relative deadzone compared to the land we are talking about in Ottawa. LeBreton Flats is already woven into the fabric of central Ottawa, and huge pieces of redeveloping the area are already underway. The arena will slide into a parcel of land next to the new Library and Archives Canada facility (currently being built), the still new-ish National War Museum, two relatively new LRT stations, and along the Ottawa River Pathway, which is probably the most used leisure pathway in the region. To its south, literally across the street, is Chinatown/Little Italy, a community with 10,000 residents and a number of new developments and LRT stations about to come online. To its north, the Zibi redevelopment of Chaudierre Falls/Albert Island, which projects to house another 5000 residents, is nearing completion. So it's not about using the area to catalyze growth or use. It presents prospective buyers the opportunity to fold an arena and whatever they build around it into an existing hub.

• You mention that to succeed, these developments need "prolonged periods of strong economy and strong job market" to encourage immigration and create demand. Well, Ottawa is already one of the fastest growing urban centres with among the highest average incomes and most stable economies in the country. It doesn't have bonanza potential like Calgary, Edmonton, or Vancouver, but neither does it suffer from the vagaries of the markets to which those cities are tied. It's not a boom and bust town, it's about slow and steady growth. Public sector jobs have a lower ceiling but are much more stable compared to e.g. Oil & Gas. I know Edmonton is a provincial capital, but we are talking orders of magnitude of difference compared to a national capital. Even Ottawa's tech sector reflects this slow, stable model -- it's based in large enterprise software and telecomms infrastructure rather than tech start-ups. This is anecdotal, but my sense is that a huge number of young, wealthy families are moving to Ottawa, which has historically had an undervalued real estate market, because they are priced out of Toronto.

Last thing: another important dimension that is specific to Ottawa is the National Capital Commission, which will own the land and is controlling the redevelopment process. My sense is that once you are on good terms with the NCC, all things are possible. There's value in that for a prospective buyer and its development partners, which adds to the appeal of purchasing the team (in addition to the things you list about prestige and actual monetary value of the franchise's operations -- no disagreement that they add value, it's just that these other factors are more valuable).