Markham arena: Councillors want probe of promoter
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Two Markham councillors want the city to take a much harder look at the promoter of the city’s plan for a NHL-size arena despite the mayor’s strong support of him.
Councillors Jim Jones and Don Hamilton have confirmed they will ask council within the next two weeks to probe the background of Graeme Roustan, president of GTA Centre LP, the proposed builders and operators of a $325-million arena near Hwy 407 and Kennedy Rd.
“We’re making a phenomenal financial commitment so it’s imperative that we understand who we are dealing with,” said Jones, a council veteran. “I don’t see evidence of any proper due diligence in the project reports so far.”
“There was no personal information about anyone (in the reports),” added Hamilton. “If we are spending $325 million, we have a responsibility to our residents to do a thorough background check of all our prospective partners. I’m requesting an investigation of our partners take place.”
Roustan and his lawyer did not respond to a request for comment on the councillors’ proposed move.
But Mayor Frank Scarpitti said he has told councillors the city hasn’t found any concerns about Roustan after checking his personal credit history.
Roustan was chairman of publicly-traded Bauer Performance Sports for about 18 months until he resigned recently to focus on the arena project and other business interests.
Roustan and Remington Group under the control of wealthy developer Rudy Bratty are the two private partners working with the city on the project.
Under the project’s proposed financial framework, the city would borrow $325 million and the private partners would pay back half of the amount over 20 years. The city, which would own the landmark building, wants to raise its share through development fees on builders and ticket surcharges on arena users.
Council overwhelmingly voted for the funding arrangement in April but that support has eroded in the last two months amid rising public opposition. Last week, the deputy mayor, Jack Heath, announced he was no longer supporting the arena’s funding structure.
Scarpitti noted the city is not relying on Roustan for money to back the project but for his ability to form groups of key industry players so they can turn the vision into reality.
“I’ve been impressed with who he has brought in as partners,” he said. “They are leaders in their fields.
“If this project rested (financially) on Graeme, we would not be talking. All of the financing and legal roads lead to Remington and Rudy Bratty.”
But Hamilton and Jones said that the city hasn’t conducted enough due diligence on Roustan’s business history in the U.S.
Jones said he wants a report to include any liens during the last decade; warranty claims, litigation; business activity, court judgments and settlements involving Roustan.
“I never liked the fact that he was a big name dropper and didn’t show us a lot of details about his business success,” said Jones.
The Star reported last month that a Texas civil court found in 2009 that Roustan committed statutory fraud in an arena deal. He has appealed to the state’s Supreme Court.
He provided financial advice to wealthy investors during the 1990s before developing a business that managed and provided ice-making equipment to arenas, primarily in the United States. But several former partners and customers have criticized his business practices in interviews with the Star.
Roustan said he also worked on reviving struggling arenas.
Earlier this year, Roustan told Markham council and residents that he was “a finalist” in the auction of the iconic Montreal Canadiens in 2009. But a source familiar with the sale said he never made the top four suitors or submitted a formal bid.