In a previous post, about the bait-and-switch, I quoted a specialist in the economics of sport as saying that it has become standard practice in bidding for the Olympics to start by low-balling the cost, and then, once the city is hooked on the idea of being an Olympic host, to add new features that balloon the cost. Dennis Lewycky commented on the post with two questions:
“Is this what happened to the football stadium?”
I wouldn’t be surprised. The estimated cost at the time the provincial government agreed in principle to go ahead was $115 million. At last report, that figure had increased to about $190 million.
Without a careful examination of exactly how that happened, we can’t be sure. But for me, the significance of the sport economist’s finding is that, once a business practice has been established as a good way of achieving a successful result, why would any developer refrain from taking advantage of the opportunity? From his or her point of view, anything less than the best possible strategy could be viewed simply as a bad business practice.
As citizens and taxpayers we need to sensitize ourselves to the very real chance that any given development proposal that calls for public expenditure may be nothing more than an opening gambit.
“So who is at fault – the business people who hatch the deal or the public officials who agree to it?”
Once again, to understand what’s going on, we need to examine the events carefully. In the case of Winnipeg’s Norwood Bridge, I was able to document a bait-and-switch operation that was very clearly the work of public officials who had decided on the bridge they wanted, and who very carefully solicited public input in a way that guaranteed the outcome they wanted. They made the outcome they wanted inevitable by low-balling its price, and, once they had the public response they wanted, the price escalated.
We can’t be certain whether the public servants were responding to political directives, or whether it was they who were driving the proposal. In general, Canadian municipal administrations are quite formidable, so it wouldn’t be a stretch to think that the administrative tail may have been wagging the political dog.
The case of Edmonton’s Eaton Centre was a different matter. Here I was able to establish, with the help of careful research, that the bait and switch was driven by an apparently carefully orchestrated series of initiatives by a developer. But the politicians and officials who bought into it undoubtedly come in for their share of the blame as well – and so do we all when we fail to ask critical questions about important public issues.
The facts of the Edmonton case are documented in:
LEO, C. (1995). Global Change And Local Politics: Economic Decline and the Local Regime in Edmonton Journal of Urban Affairs, 17 (3), 277-299 DOI: 10.1111/j.1467-9906.1995.tb00348.x
The Norwood Bridge case is detailed in:
Christopher Leo, “The North American Growth Fixation and the Inner City: Roads Of Excess.” World Transport Policy & Practice, 4 (4) 1998, 24-29.