[Flash Walken]

Originally Posted by Enoch Root

People (not saying you specifically) argue that

a) these types of projects don't stimulate new growth, it only causes that growth to move from somewhere else, and

b) it would generate more taxes with residential growth, as opposed to a big empty box like an arena.

First, you can't have it both ways: if a) is in fact true (which I don't think is an absolute but is more a function of location and specifics), then it is also true that those residual developments will still happen, just elsewhere.

You're confusing growth with consumer spending. Arena districts centralize consumer spending. Someone who lives in Inglewood spends a lot of their money in that neighbourhood. An arena district transports those dollars from local Inglewood restaurants over the west village. People aren't really spending any MORE money, the areas where they spend the same amount change. This is good if you are trying to 'revitalize' the area but comes at the expense of cannibalizing other neighbourhoods. This is the chief concenr about developing the WV before the EV has a chance to solidify itself.

So that brings us to commercial development. And in an area such as this, with little to no current investment in bars, restaurants, etc, it is an extremely safe bet that the project would in fact stimulate extra investment in the surrounding area.

And I would go on to argue that the presence of the arena would further stimulate the current trend (and city desire) for more urban living (further guaranteeing that those residential complexes that you think would be lost, would in fact be built elsewhere).

Yes, it would stimulate investment, but it wouldn't stimulate enough investment to cover the costs lost due to a lack of taxable revenue for the city because the actual area that the arena district occupies isn't nearly dense enough for that part of the city. There just isn't enough available land after putting in a stadium to attract the investment necessary to make it financially viable. The costlier an area is to develop, the tighter density must be to offset those costs.

The West Village is one of the costliest areas in the city develop, and the Flames are asking to put in one of the least dense developments imaginable.

Originally Posted by Fighting Banana Slug

Disingenuous like assuming the city fronts the loan when we don't have the details of how that works?

I actually agree with most of what you are saying, but it is tiring to hear both sides state assumptions as facts to bolster the argument.

Isn't this what the Flames asked to do, and then when pressed said if the city said no they would look to private equity for a loan? Why not just do that in the first place, what's the benefit to you if I borrow a thousand dollars off your credit card and promise to repay you. What benefit do you see?

Originally Posted by Enoch Root

1) we don't know that yet, and

2) let's be clear - guaranteeing a loan is not in fact 'fronting' the money.

When you buy a house and take out a mortgage, you do not 'front' the cash for the mortgage. It isn't even the bank that does. The bank borrows money in the market and lends it to you. You pay the original lenders back (and the bank makes a handling spread).

The city will not have to supply that $250M, they simply put their name on the debt (assuming that is how it ends up) as a guarantee, if it isn't paid.

And why should the city do that? If this venture is so spectacular, why do the Flames need the cities tab for the loan, and what does the city get out of having less potential investment dollars for other areas of the city?

On that note, there were comments earlier in the thread that such a guarantee comes at a cost because it increases their borrowing costs.

That is not really accurate. It COULD increase their borrowing costs, if it resulted in them oversaturating the market with their debt, or causing their debt levels to become too burdensome.

However, if that were the case, it is HIGHLY unlikely that the city would agree to guarantee it.

So again, admitting to it without admitting to it, what is the reason the city should take on that risk? Why should the city be underwriting a loan for a wildly profitable, established private business?

Originally Posted by MrMastodonFarm

That's not disingenuous, that's just how loans work.

I dunno, I usually apply for a loan from the bank, not the city of Vancouver. Maybe we just do things strangely out here on the coast.

Originally Posted by IamNotKenKing

No it's not. The only thing undetermined at this time is where the money is being fronted from. Even if it is from the City, which has not been determined, and paid back with interest, then it is still from the team.

If you buy a house, borrow from the bank, and pay the bank back, is it disingenuous to say you paid for the house*?

(*Please note, I do not want to get into a discussion about the City "giving" me the land for the house, and the City still owning my house. I am just talking about the $250MM.).

Edit: What Enoch Root and MrMastadonFarm said.

If I buy a house, borrow money from the bank, and pay the bank back, it isn't disingenuous to say I paid for my house.

If the Flames want to buy to take out a loan to buy a piece of land to develop for a new stadium, why don't they just go to a bank like the rest of us saps? It's obviously for the more favourable terms. What does the city get out of it? "Prestige"? A "World Class" arena?

Is it so unpalatable to say that the Flames want the city involved because it's cheaper for the Flames?