Quote:
Originally Posted by Bingo
Yeah that had me curious too.
I thought the land was a swap with the Stampede board for the land under the Saddledome. That wouldn't be an expenditure if so.
Yet that gets muddied because of the olympic bid where the city has the Dome and the Corral still in use meaning they can't knock it down because the city needs to use it.
Either way not sure those two costs should be considered part of the city's contribution if the above is correct.
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There's a lot of stuff in there that's a head scratcher. There are more than enough questions surrounding the City's offer that should be scrutinized a lot more than they are.
The City is including costs for things already on the books or unrelated to the project. This is fluffing the numbers. Not unexpected, but still something you don't want to see at this point in negotiations.
The City also tosses in there a property tax assessment. By that, they are saying the Flames own the building. The Flames have stated they don't want ownership of the building, for many reasons, including the property tax issue.
The City then goes on to say they would have access to the building for events during Stampede. Kind of strange thing to add when they don't own the building. I could see this being a major sticking point for the guys who "own" the building.
I can see why the City would like this deal. I can see why the fans would see this and immediately like it too. I can see why the Flames would not like this deal and be somewhat choked over it. Especially when you dig into the Edmonton deal and what the Katz Group got out of it.
Consider for a second that the Oilers got a building by putting up $26.5M, and have a long term lease (~$3.5M a year) that is less than the property taxes on the proposed Calgary building ($550M building with a standard non-residential mill rate of 0.0177445 comes out to $9.76M a year). The Flames have to put up almost seven times the money ($185M versus $26.5M), pay a larger surtax ($185M versus $125M), have to pay almost three times what the Oilers do for occupancy, and then have to give up the building for 10 days when the highest traffic volumes of visitors hit the city. What could possibly make the Flames walk away from the table?
I think there is still a possible deal here, even though the Flames are going to get roiled compared to what their provincial neighbors got. The Flames will have to get over this. I would propose the following.
Rule of Thirds Financing
City of Calgary pays $185M. Period. All other slushed costs outlined in their slide are on the City. Flames pay $185M. Period. Ticket Surcharge is $185M, and stays in place until that amount is recovered. City owns the building. Flames have exclusive use of the building and receive all revenues. City can recover their contribution through the imposition of a 1% entertainment tax, like they do in many of the US cities. This tax stays in place until that $185M is recovered. All revenues are recovered through use taxes and surcharges. Everyone gets what they want and what they need.
This is a win-win for everyone. City gets a recovery scheme for their investment. They also get a helluva deal on the "rent" the Flames are paying upfront in the tune of that $185M. If the City was forced to pay for the whole building, and then lease it out based on competitive rates ($3.5M per year in Edmonton) it would take the City 52.8 years to recoup that money. There is something in there for everyone to love, and something in there for everyone to hate.