Quote:
Originally Posted by strombad
Actually, the economic benefit for an arena by itself has been observed to be near zero (not negative). This however does not take into account many if the things he just mentioned, including development around the arena, tax dollars paid by occupants, etc.
It's simply that a new arena and the jobs it directly provides shows no economic benefit. It's not a negative, but when building an arena there has to be more to it than just "New arena, now there's a team in it."
Here's a good quote from someone smarter than myself, and an interesting article on the subject:
http://www.mintpressnews.com/stadium...nomics/190351/
That said, regarding new plans for the arena and the debate over taxpayer dollars: |
Exactly so, but as mentioned above, direct ancillary benefits are significant (assuming of course a good business model).
What is remarkable, though, is the deal Katz made with the city of Edmonton. He really bent them over a barrel on that one. If I understand it correctly, Katz is contributing $161.5 million to the overall project (including winter garden), only $23.7 million is actual cash investment – the other $138 million investment will come in the form of a lease, paid over 35 years. Katz also receives all revenue operating revenue from the facility.
The 11th richest man in Canada (according to Forbes) only puts up 23.7 Million in cash for a 600 million dollar project?
In addition, the city of Edmonton is really mortgaging the future on projected increased tax revenues through new development around the arena... which I'm not suggesting isn't sound economics, but it's definitely a huge risk to the taxpayer.
I expect this has been covered in great detail here already, but here is the link to the deal in Edmonton:
http://www.edmonton.ca/city_governme...agreement.aspx
Katz has ruthlessly leveraged Edmonton's love affair with the Oilers into the biggest sweetheart deal ever - it has nothing to do with welfare mentality, and Flames ownership will be lobbying for more of the same for them. These guys did not rise to be among the richest men in Canada for no reason.