Quote:
Originally Posted by Ducay
Thats just the discounting. Rent itself has $275m in value, source: multi-trillion dollar commercial real estate industry.
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Okay. I don't understand how your math works. You're double counting both the construction and the "rent" as two separate line items.
I believe what you're thinking is that the 275M from the Flames goes towards the construction, and then the City gets another 275M from the Flames up front as pre-payment for rent.
In this scenario, I would absolutely agree that the City would profit massively from the Flames pre-paying 35 years of rent.
That's not what's happening.
The Flames are paying 275M into building the arena and then paying no rent. This is in exchange for 100% of the revenues.
In your commercial real estate scenario, it'd be like your tenant offering to build half of a building, then getting to use the entire thing rent free forever, while you pay the costs of running the building. You were expecting to recoup the costs of constructing the building through rent (like every other real estate deal on the planet), but actually you're just doing nothing but paying operational costs.