Today, the Toronto Blue Jays purchased the SkyDome for $21 million:
http://sports.yahoo.com/mlb/news?slug=bluejaysskydome&prov=st&type=lgns
It was originally built in 1989 for a pricetag of $500 million:
http://www.ballparks.com/baseball/american/skydom.htm
How in the world does a building like that depreciate in value by $479 million?!? Is there something in the original article that I’m missing, or something that the article fails to cover? Because that seems like a significant price cut.
At a guess, i’d suggest that it’s because they have difficulty filling it. When it was built, they had visions of it being filled reqularly by the Jays and the CFL team, the Argos. That’s not happened, and it’s got to the point where the Argos are building a new, much smaller open-air stadium at York University, because they can’t afford the rent. They hope to be outta there for the 2006 season. So, if the Dome is losing money, it’s overall capital value naturally goes down substantially.
Basically, the building sucks. It can really only hold baseball, which is all but dead in Toronto.
It’s far too cavernous for concerts, the wrong shape to fit hockey, football or basketball.
The seats are aligned weird, you have to turn in your seat to see the infield in most sections.
The angle is weird; it’s not that easy to see over the people in front of you if they’re tall.
It’s also uuuuuuuuuuu-gly!
Was $21 million the Black Friday price by any chance?
I also think it was too expensive to start with. I remember they went 24 hours a day building it to meet some deadline or other.
All those night shifts no doubt drove up the price. Given a realistic schedule, they possibly could have built it for half the price.
Isn’t the prime downtown waterfront acreage worth a lot more than that, anyway? What is the Gummint getting out of it instead - a guaranteed tax revenue stream larger than they’d been getting, I hope?
Okay, looking at my second link, it looks like this is the second time the stadium has been sold:
That seems to show that some depreciation isn’t unexpected. I would also guess that a lot of the initial investments were recooped from tax revenue and concession contracts (breweries and other companies were some of the initial investors, along with the gov’t).
The Dome simply isn’t worth that much for the simple reason that nobody wants it. It doesn’t matter what it cost to BUILD. It wouldn’t matter if it cost $600 million or $600 trillion or six pesos. What matters is that nobody wants it now, except the one corporation in the world that it’s worth something to; Rogers Communications. (The company that owns the Blue Jays.)
The reason, essentially, is that it was never worth that much in the first place. It’s hideously expensive to run and the execution of building it was botched from the get go. The hotel was long ago sold separately so you no longer have that revenue stream. There are major interior renovations needed; the Blue Jays, from what insider info I can glean, already plan to replace the entire Jumbotron, replace the astroturf with that stuff that looks like real grass and reconfigure the infield to look like a grass diamond, and add ribbon scoreboards - upgrades that will cost far more than what they paid for the stadium. It also needs substantial cosmetic work throughout. I would guess they’ll invest $35 million without even trying hard.
It’s not as bad a situation as RumMonkey suggests. It’s a good place to watch the game - I cannot imagine where Rum sits that you need to twist around to see the action - and the stadium’s location is probably the best location of any major league stadium, in terms of it being dead set in the city’s tourist area. Baseball isn’t dead in Toronto, averaging 20,000 per game even at its recent low ebb and the market will obviously provide big dollars if the team ever contends again, and the Dome holds a fair number of trade shows and such. But it’s gonna cost a fortune to fix up and only the Blue Jays will get the value back out of it.
Elvis, the land might be worth a lot if the Dome wasn’t standing there. But destroying a stadium of that size and clearing the lot would probably cost you more than the land’s worth. It’s, uh, big.