Brantford Sports and Entertainment Centre: Is It Worth the Investment?

The City of Brantford has approved a plan for a $140 million investment in a new Sports and Entertainment Centre (SEC). Now there is potential for this being the catalyst of economic growth and job creation in a revitalized downtown, it also comes with significant financial risks. The plan to finance Brantford’s SEC with projected incremental property tax streams from future proposed developments has hopes to offset much of the debt load. Let’s take a look at what the project means for Brantford residents, its potential benefits, the financing behind it, and whether it’s a smart move for the city.

Note: I will link to an another article about the timeline, milestones, and what dominoes need to fall for this project soon.
Previous articles about Brantford’s SEC:
New Arena In Brantford Coming for the Bulldogs?
New Arena in Brantford Proposal Update

What is the Brantford Sports and Entertainment Centre?

Brantford has big plans for it’s lower downtown. The city is looking to invest $140 million into a brand new Sports and Entertainment Centre (SEC) in downtown Brantford. Think of it as the city’s answer to putting itself on the map for big events—whether it’s for the proposed anchor tenant, the Brantford Bulldogs, concerts, festivals, conferences, trade shows and more.

The SEC is planned to hold 5,300 seats for hockey games, and 6600+ for other events, and could serve as a center piece for downtown revitalization. Sounds exciting, right? But of course, big dreams come with big price tags. That’s where the debate begins.

What Will the SEC Do for Brantford?

Economic Benefits

One of the biggest selling points for the SEC is the potential economic boost. The city expects it to bring in $13.2 million annually to the local economy here and create around 100 permanent jobs. That is an absolutely massive shot in the arm for local businesses, especially restaurants, hotels, and shops (both current and potential future businesses) downtown. Plus, with the Bulldogs projected to generate an over $4 million in additional local spending (including $900,000 from out-of-town visitors), it would push Brantford into the conversation of destination cities in Ontario.

There’s also a long-term vision of turning downtown Brantford into a vibrant entertainment district. If done right, this could drive up property values, solidifies new developments, and breathes new life into the area. Other cities, like London and Oshawa, have seen major success with similar projects.

Cultural and Social Impact

Aside from the dollars and cents, the SEC could bring something equally valuable: a sense of community pride. Imagine the atmosphere of live sports, concerts, and events that bring Brantford residents together. Whether you’re a Bulldogs fan or just looking for something fun to do in town, the SEC would help put us on the map for entertainment.

Arguably Brantford has lacked a permanent fixture to draw in tourism from out of town folks. Sure we have a number of different one off events that draw people in to the city, but we need a permanent fixture to accomodate a more regular flow of tourism. Having an event centre that is capable of handling a sizable crowd with the necessary amenities makes the possibility of Brantford moving from “drive-by” to “destination” city closer to a reality.

How Will Brantford Pay for the SEC?

This is the part where things get tricky—how are we going to pay for it?

The city plans to cover the cost using a debenture (a fancy word for a loan that doesn’t require collateral). We’ll borrow the $140 million now and pay it back over 30 years. The annual payments? Roughly $8.4 million—which would represent 4% of the city’s 2024 budget

In comparison to other cities in Ontario that are 100,000 to 160,000 in population (11 total using 2023 population numbers) the amount of annual debt service costs would be nominal. In fact, even by adding that $8.4 million to Brantford’s annual debt servicing costs it would still put us as the city with the 2nd lowest debt servicing costs (by percentage) of the others in that population range. That 160,000 number is relevant because that’s where Brantford’s population is projected to be by 2051.

To offset this debt, several alternative funding sources have been identified:

• Naming rights: Up to $5 million
• Corporate sponsorships: $2.5 to $5 million
• Proceeds from property sales: $5.1 to $7 million
• Municipal Accommodation Tax (MAT): Approximately $400,000 annually
• Casino funds: $635,000 annually for 10 years

The Role of New Property Tax Revenues for the Brantford Sports and Entertainment Centre

A key part of the city’s plan to manage the SEC debt is the projected $9.5 million in new property tax revenues from nearby developments in the Lower Downtown Entertainment District. These developments, which include residential units, commercial space, and a hotel, are expected to significantly boost the city’s property tax base. Once the projects are completed, the city hopes to use this additional revenue to offset the annual debt servicing costs.

While this revenue is promising, it’s important to note that the developments haven’t begun construction yet. The city expects the property tax revenues to materialize between 2025 and 2028, depending on the pace of the housing market recovery.

The Risks of a (potential) $140 Million Investment

High Debt Load

The biggest risk is the debt. The total spend could be a lot less with the potential revenue streams noted above, but either way adding over $100 million in debt means a long-term commitment that could strain the city’s finances, especially if revenues don’t meet expectations. The city has estimated a $669,000 annual operating deficit for the SEC. That’s more money out of the annual budget every year to keep the facility running.

Economic Uncertainty

Another risk is that the economic benefits being predicted might not materialize as expected. If the new property tax revenues from the developments are delayed or if property values don’t increase as forecasted, the city could face financial strain. Rising interest rates could also make it harder to pay off the loan.

Opportunity Costs

By investing into the SEC through a debenture, and considering the estimated annual operating loss it would incur, the city would need to be very diligent that it doesn’t start to affect resources for other important projects—like affordable housing, infrastructure, or healthcare. It’s all about balance, and this is a big bet.

Is the Brantford Sports and Entertainment Centre a Good Investment for the City?

So, is it worth it? That depends on your view. On one hand, the SEC could be a game-changer for downtown Brantford, bringing in jobs, boosting the economy, and creating a local cultural and entertainment hub in the lower downtown. If the projected $9.5 million in property tax revenue comes through from the surrounding (proposed) development projects, it could help reduce the debt burden and make the project more financially feasible.

There’s also the intangibles that can’t necessarily be measured or projected by analysts. As a life long citizen of Brantford it is a very exciting notion that we might be able to finally shed our “little sibling city” mentality and finally break out as one of the destination cities of Ontario. A lot of the proposed redevelopment plans in the area are waiting to hear what happens with the Brantford Sports and Entertainment Centre. If this passes all the checkpoints along the way, the ripple effect of development and new businesses coming to Brantford would mean a great deal to it’s citizens, and perhaps removing a key reason why they go out of town for errands and entertainment.

On the other hand, it’s a massive financial commitment, and there’s always the risk that things don’t go as planned. If the developments are delayed, or the property tax revenue doesn’t meet expectations, the city might have to find ways to cover the costs, which could mean higher taxes or cuts elsewhere.

What are your thoughts on the proposed Brantford Sports and Entertainment Centre?

This is a big decision for Brantford, and the opinions of residents matter. Do you agree with the city’s plan to move forward with the Sports and Entertainment Centre? Is it worth the cost? I’d love to hear your thoughts—drop a comment below and let’s get the conversation started!

Click to download the full report and agenda from the October 8th 2024 Meeting where the plan to approve the proposed Brantford Sports and Entertainment Centre was approved.