What are the best (legal) businesses to be in?

By Bruce Firestone | Architecture

Dec 21

(Excerpt from Don’t Back Down, the real story of the founding of the NHL’s Ottawa Senators and why big leagues matter)

The most profitable businesses are either illegal (like drugs) or government-owned like property taxes, alcohol distribution (at least in Ontario and Quebec), utilities and lotteries (plus drugs, if you count legalization of cannabis in Canada).

I love the idea of being a city with monopoly services such as power distribution and property taxes. If your customers don’t like you, too bad. They can’t move their account over to a competitor since none are allowed anyway. Plus, you are forced to connect to their services (garbage collection, power distribution, etc) even if, for example, you wanted to build an off-grid home. It must still be connected to the power grid and you have to pay on-going connection fees even if you don’t draw any power.

The next best set of businesses to own would be quasi government monopolies like TODS, which stands for Tourism Oriented Destination Signage.

It is little understood by the general public. Here’s what its website says:

-The TODS (Tourism-Oriented Directional Signing) Program is being offered through the Ministry of Tourism, Culture, and Sport. This program permits qualifying tourism operators to place their business signs along Provincial roadways.

-The TODS program provides wayfinding and directional information to travellers throughout the Province of Ontario. Signs on the freeway display the business name and icon or logo. Ramps, Kings Highway and Municipal Road signage include the turn direction and kilometres to direct the motorist to the operation.

In actuality, TODS Ontario[1] is run by Interstate Logos, a subsidiary of billboard giant Lamar Advertising Co. Traded on NASDAQ (symbol: LAMR), Lamar is one the largest outdoor advertising companies in North America. It is headquartered in Baton Rouge, Louisiana.

When we were still in the planning stages for the Palladium, it was always our intention to put large signs on the outside of the building—not just for the arena’s name but for other major corporate partners as well. When one of our development team told me that, because of TODS, we would not be able to put signs anywhere within 400 meters of a 400-series highway in Ottawa, my first reaction was, “Are you freaking kidding me?

Next I asked, “Can you please show me a drawing of the Palladium lands with a 400-meter buffer?”

When he showed me, I realized that the new TODS rules would only allow us to have signs on the south-facing side of our building. Anything else would run afoul of the new rules, which meant we would lose visibility to over 100,000 vehicles a day cruising the nearby highway. I don’t need to tell you, dear reader, now that you are an advertising expert, what the value of our outdoor signage would be worth after subtracting 3+ million views a month from our CPM calculations.

When I learned that Ontario had given all the rights to highly valuable signage along 400-series highways in the province to a company out of Baton Rouge for ten years, I was outraged. Of course, as an entrepreneur, we always obey the rules, right? No friggin way.

Here’s a photo of the arena. Notice anything on the Queensway-facing (north) side? Any large partner signs? You sure do.

Advertising, What Advertising?

Every farmer, every property owner along a 400-series highway in Ontario, has for a very long time had large billboards on their lands that provide a much-needed income booster. Billboards that say, “Hamburglars ahead, 10 klicks” or “Bates Motel, Great Showers, next exit” have been around since before infantile, lecherous and perpetually pubescent Groucho Marx said, “A man’s only as old as the woman he feels.” Thankfully, the world has changed since Groucho chauvinistically said this, but in some ways, it’s gotten worse. Read on.

I don’t have to tell you how vast a billboard (and expensive it) has to be to be seen by cars passing by at 100 kilometers an hour 400 meters away. The Ontario government, along with their US-based partner, effectively expropriated adjacent property rights, but without compensation.

Taxation without representation was one of the causes of the American Revolution so marvelously recreated in AMC’s television series TURИ. Expropriation without compensation is unconstitutional, not only in the US and Canada, but anywhere the rule of law prevails. History has shown that, if you want to victimize a minority, first seize their property, next make them homeless.

Former prime minister Pierre Trudeau[2] understood this when he fought to create the Canadian Charter of Rights and Freedoms, which forms the first part of the 1982 Constitution Act[3]. He wanted to embed property rights in the charter, which was bitterly opposed by its provinces.

How come?

The provinces wanted unequivocal and unfettered control over riparian, air and subterranean rights as well as zoning ordinances, casinos[4], lotteries, and, of course, other lucrative things like signs along highways. If you find oil or gas under your lovely ranch in Big Muddy Saskatchewan[5], sorry brother/sister, you don’t own it, your province does. You don’t like the fact that your city or your province is trying to cavalierly and without adequate planning merits downzone your property from eight stories to four, too bad. It’s expropriation without compensation, and you don’t have the right under our charter to do anything about it.

I’ve found that politicians tend to like two things—money and power, which are closely interconnected. Provincial opposition to Mr Trudeau just confirmed that impression in a much younger Prof Bruce. Sorry if I offend you.

Of course, politicians and their handlers can spin anything their way. The TODS justification is twofold—1. it is to get rid of clutter and “visual pollution” caused by private billboards lining Ontario highways, and 2. it is a safety measure to cut down distracted driving. As far as the latter is concerned, maybe they ought to ban pretty girls or handsome guys from walking within 400 meters of a 400-series highway as well—too much driver distraction.

The other explanation is also totally bogus. They could have regulated the look and feel of private signage, no problem.

Nope, it’s just another revenue grab.

Anyway, I’ll leave it to a younger generation to find ways to attack, and repeal such restrictions, if they feel so inclined.

The Sens made a different argument—“If you arbitrarily take these revenue streams from our team, we could go bankrupt, AND IT WILL BE ALL YOUR FAULT!”

Now hockey is as close as Canada comes today to a national religion. Like many developed countries, it is moving, for good or ill I cannot say, to become a post-religious society. When I was teaching in Sweden, I was surprised to learn that 95% of Swedes, “Don’t believe in such things,” referring to organized religion. Wow. Only the United States as far as I can tell is resistant to such change, more American exceptionalism, I suppose.

So when you infer that TODS and the Ontario government might be the cause of such a catastrophic alteration in the Sens’ circumstances, they’ll find a way to make an exception, write up a new arcane “regulation” in language so obtuse that no one other than lawyers who specialize in crafting parliamentary law can read and understand it, and then they’ll spin it out to the world via their PR machine.

Anywho, there is a ton of outside signage at CTC, but it didn’t save the Sens from bankruptcy, which I deal with elsewhere.

FOR REAL ESTATE INVESTMENT AND BUSINESS COACHING THAT’LL HELP YOU PROVIDE FOR YOURSELF AND YOUR FAMILY FOR 3-GENERATIONS, PLEASE CONTACT:

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD
Real Estate Investment and Business coach
Century 21 Explorer Realty Inc broker
Ottawa Senators founder
1-613-762-8884
bruce.firestone@century21.ca
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[1] It’s official name is Canadian TODS Limited.

[2] I met Mr Trudeau twice. Once when I fought him in his son’s (Justin, now Canada’s 23rd prime minster, having followed in his father’s footsteps) and my son’s (Andrew) dojo. Trudeau was a black belt. Parents were invited to show their sons what they were made of, and I was matched up with Pierre. I thought I’d take it easy on the old guy. Man, he was strong. Pierre threw me twice before the dojo master mercifully called a halt before he killed me. The other time, I played defense on a recreational broomball team out on the ODR at Rockcliffe Park Public School where I had my revenge, crushing him with a solid and illegal body check. Canadians, like Aussies, don’t respect people just because they’re rich or famous, not even if they’re PM.

[3] It’s important to realize just how young a nation Canada is. Formed in 1867 via the BNA, British North America Act, it wasn’t until 1982 that Canada became a truly sovereign nation, when Trudeau swept away most of the remaining vestiges of British colonialism including the right to appeal Canadian laws to the pretentiously named “Her Majesty’s Most Honourable Privy Council” based in the United Kingdom (in London naturally). Canada remains a constitutional monarchy, but in name only.

[4] Top malls in Canada and the US see sales in excess of $1,000 per square foot per year, with some like The Grove in LA owned by Caruso Affiliated and built in 2002 averaging over $2,100 per square foot according to CNBC. Casinos, on the other hand, will see sales of $5,000 per square foot per day. That’s right, per day. Not per year. Governments like to keep all the best businesses for themselves. J

[5] I’m heading there in the summer of 2016, hopefully, to stay on a ranch for a few weeks and write, Urban Nirvana and the Peradventures of Maddy Henderson, a book about the worldwide NIMBY (not-in-my-backyard) problem, which is retarding economic development and adjustment in cities and towns across the planet, interrupted by greedy, fearful people who don’t know anything about urban development, design or economics. Why Big Muddy Saskatchewan? Because that’s where Maddy Henderson is from. Sorry, you’ll have to read the book to get it.

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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.

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