Mayor shrugs off extra $225K a year from St. John's to Mile One for new deal with teams

Mayor Danny Breen says St. John's taxpayers won't feel the extra subsidy to Mile One Centre under the city's new 10-year lease deal with its two professional sports teams.

The agreement in principle announced Wednesday with the owners of the Newfoundland Growlers ECHL hockey team and St. John's Edge National Basketball League of Canadateam includes an average of $225,000 a year more from the city to Mile One.

"That wouldn't mean anything to taxpayers,I mean that would be absorbed. We have a $300 million a year budget so $200,000 is a very small piece of that," Breen said Thursday.

Mile One and the St. John's Convention Centre get an operating grant from the city each year, Breen explained.

"That is based on the performance of the building, so that includes the number of events we have, how profitable those events are. Hockey and basketball are just part of that."

Reviewing Mile One business model

Breen said they're working to recover more revenue by increasingother events in the building, like concerts, and from sales at the Growlers and Edgegames.

He said the city maintained its previous split on concession revenue, and the more people in the building the higher sales they tend to see.

"It's important ... that we have a vibrant downtown area and having activity at Mile One is an important piece of that, and to be able to do it on a cost-effective basis is very important for us," he said.

Both Breen and Growlers owner Dean MacDonald said the benefits of the deal to keep hockey and basketball at Mile One for 10 years are much greater than its costs.

"Their subsidy may go up because they are receiving less money from us, but what we pay for the facility more than pays our own way," said MacDonald.

Fans get guarantee

At one point, the team's owners were pursuing a third party management agreement for Mile One and the Convention Centre to have more control and make more money.

When asked why that was rejected, Breensimply said "it was decided that we weren't going to proceed with that at this time."

Instead, the new long-term lease agreement ensures fans in St. John's are guaranteed to have the teams for at least a decade.

And Breen said he thinks previous shorter-term deals were an issue for ticket sales, with fans not knowing how long a team would stick around.

The city said Mile One received $1.96 million for its operating grant in 2019.

That will increase by $440,000 next year to total $2.4 million; $250,000 the following year so totalling $2.21 million; and $200,000 for the remaining eight years of the lease agreement.

Read more from CBC Newfoundland and Labrador