If a new home for the Toronto Blue Jays is to be built in the city center, it would mean the termination of the lease for Rogers Center, which only expires in 2088.
This lease agreement with Canada Lands Company (CLC), the corporation that controls most of the land on which the stadium is built, was originally signed in 1989 and required a rent of at least $ 330,000 per year. Rogers Communications, who currently owns the team and stadium, is likely paying more today, according to industry sources.
By building a new stadium on land they do not own, it may seem like a long-term lease in a long-term lease situation, real estate and sports experts say CLC, Rogers and the development partners have many incentives to sign the deal.
For Blue Jays and Rogers, the demolition of the stadium, which was built in 1989 for an estimated cost of $ 570 million, could mean replacing it with a smaller, more modern stadium with more lucrative corporate apartments. It could also mean that the team and company are gaining new revenue streams from a multifunctional development built on the site, including housing, office space, retail and several park areas.
This is money that would not go into the Major League Baseball revenue sharing program to share with other teams. It also does not count towards baseball-related revenue, which would mean increasing teams’ salary ceilings, noted David Carter, executive director of the Sports Business Institute at the University of Southern California.
“This kind of income, the team doesn’t have to share with the league or the players. It’s their own. This could have a huge impact on team revenue and add value to their franchise, ”said Carter, who spotted a similar project just a few miles from Rogers Center: the Maple Leaf Square Project by Maple Leaf Sports and Entertainment, Cadillac Fairview and Lanterra Developments.
Blue Jays is valued at $ 1.625 billion (US) according to the latest estimates by Forbes.
Although the SkyDome, as it was known when it opened in 1989, was an early modern wonder, it became clear almost from the outset that it was outdated, said Richard Peddie, who ran the stadium in his earliest years. The contrast between the heavy concrete stadium in Toronto and the single retro stadium built in Baltimore shortly afterwards couldn’t have been clearer.
“I walked into Camden Yards for the first time and said” oh, sh … “. The SkyDome was actually the last of the huge multi-purpose stadiums to be built, ”said Peddie. The stadium is already the seventh oldest football field in Major League Baseball. In 1994, the Ontario government paid off the stadium’s debt, which rose to $ 400 million, and then sold it to a consortium that included then-owner Jays Labatt Breweries for $ 151 million. The stadium filed for bankruptcy protection in 1998 and was purchased by another company called Stadco for $ 80 million. Ultimately, Rogers bought it in 2004 for $ 25 million.
Sources say Rogers has prepared a plan with Brookfield Asset Management that includes the construction of a new, smaller stadium with apartments, office space and a park. The plan does not envisage any public funding, unlike the construction of the Rogers Center.
“We were researching the stadium’s capabilities prior to the pandemic, but throughout this year our primary goal was to connect with our customers and keep our employees safe, so there is no current information on Rogers Center at the moment,” said Rogers spokesman Andrew Garas.
Brookfield declined to comment on this article.
While some published articles suggested Rogers is considering the Quayside neighborhood as an alternate location, a spokesman for Waterfront Toronto, who owns the area, said the plan was new to them.
“The media reports were the first ones Waterfront Toronto heard of an interest in the Quayside site as a potential new home for Blue Jays. Quayside has two council-approved areas of the district plan: East Bayfront Precinct and Keating Channel Precinct. … Neither of the two plans envisages the siting of a multi-purpose stadium like the Rogers Center, ”said spokesman Andrew Tumilty.
A source familiar with Rogers’ plans and who is not authorized to discuss them publicly said Quayside was out of the question.
The company has already contacted both the federal government, which owns most of the land through the CLC, and the City of Toronto, which owns a small plot of land and would have to sign a zoning change agreement.
The CLC admitted in an email that it owns most of the land and that Rogers Center is on a lease that expires in 2088, but has made further inquiries to Rogers.
Among those Rogers met, according to the Federal Lobbyist Register, are local MP Adam Vaughan, PEI MP Steven MacKinnon and Taras Załusky, acting as Canada’s Chief of Staff for Public Services and Procurement.
Vaughan, the Liberal MP for Spadina-Fort York where the stadium is located, admitted meeting Rogers last July and said he had a simple message for the communications giant after sharing details of his plan.
“The advice I gave Rogers was to contact Canada Lands sooner rather than later,” said Vaughan.
There is also a lot of motivation in CLC to have fun with Rogers, said John Andrew, a professor of real estate at the Smith School of Business at Queen’s University.
“The stadium stands in the way of greater development. The lease definitely gives Rogers an advantage as the sports stadium is far from the most lucrative use of the property, ”said Andrew, who estimated it could take five or more years for the new stadium to begin.
Andrew said that even if the CLC did not sell the land, the rent on the new development, including office towers, shops and apartments, would be worth millions of dollars more per year to the corporation-crown it receives from the lease of the stadium.
CLC may decide to sell the land or swap it for a share of the investment, said Andrew, who would not be surprised if the project would eventually expand to include the redevelopment of the nearby Metro Toronto Convention Center.
While the Convention Center is owned by another developer, Oxford Properties, Andrew said large developers will often work together to spread financial risk across mega-projects.
“A collaboration between Brookfield and Oxford would be very easy to do. They’ve been working on other contracts together, and all these guys know each other very well. It’s a small club. Retirement plans like to share the risk with others, so you often see deals between two or three of them, even if one of them can afford to do it himself, ”said Andrew.
While both CLC and Rogers have an incentive to want a new solution, so does Brookfield and any other developer who might join the project later, said Andrew. With COVID-19, downtown office buildings that once provided a steady stream of income for large developers have turned into a much less profitable company, possibly permanently.
“I think when all is said and done, maybe 30 to 50 percent of people will go back to work in these office buildings. That is why we can see how big developers are pushing more apartments than office buildings. It’s pretty simple, said Andrew.