The article “Sports in the public-private arena: City of Toronto” which appeared in the June 2009 edition of the Government Finance Review considers the successful and unsucessful business models or partnerships embarked on by the City of Toronto in ensuring the viability of medium-sized public facilities. It provides key insights and documents the experiences of the City of Toronto, with subsequent lessons for other cities aiming to review the use and sustainability of existing public facilities. With the future of the Good Hope Centre in the balance, the article would suggest that sooner the City of Cape Town engages both the private and public sector the better. Through this process of engagement innovative and viable solutions may be created for the future of the venue. While Canada benefits from a demand (ticketing and revenues) for indoor sports e.g. ice hockey, the lessons provided can be applied across most event types and are certainly applicable to other Cape Town venues as well.
Sports in the public-private arena: City of Toronto
Over the past decade or two, many municipalities have entered into public-private partnerships (P3s) to provide sports and recreation facilities for their communities.
Most of these projects have involved the creation or extensive renovation of medium-scale facilities, which often host minor league professional sports teams as well as community events. Municipalities usually use some form of P3 for these projects in order to achieve the following objectives:
* Limiting the municipality’s financial exposure
* Taking advantage of private-sector financial resources
* Taking advantage of private-sector expertise in facility design, marketing, and facility operations.
Toronto recently completed two of these projects. The outcomes differed sharply, leading to several recommendations that might be useful for other municipalities contemplating similar projects in the future:
* Carefully examine the demand forecasts, and structure the sharing of project returns and liabilities accordingly.
* Select a private partner with suitable experience, and make sure this partner’s interests align with those of the municipality.
* Where possible, ensure that projects are located on government-owned property.