Quote:
Originally Posted by GGG
One thing to remember is that the Flames are subsidized. They are gifted the entertainment business and pay below market rent. This issue is about the Flames asking for an increase from a 6 million dollar subsidy to a 15 million dollar subsidy per year. What are the flames doing that makes it worth us increasing the subsidy that we currently give them
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Sure - the flames are obviously subsidised in two key ways:
1) No property tax - this is fixed subsidy after the effects of inflation. It's annualized value roughly remains unchanged over time. I'm not sure what the annual value of this subsidy is.
2) Building is subsidised - this is subsidy with an annual value roughly equal to (Cost of construction subsidised/life-of-facility). The longer the facility lasts, the lower the annual subsidy. So the saddledome costs $200m and lasts 40 years, the annual subsidy is ~$4m per year after present-value calculations
So annual subsidy today = $4m + no property tax
What the flames are suggesting is that they continue to recieve subsidy one (no property tax), and wants an increase to subsidy 2. If the city is asked to pay a subsidy of $250m on the new stadium and the new stadium lasts 50 years, then the annual subsidy the flames are asking for is roughly C$8m after present value calculations
Annual subsidy with new arena = $8m + no property tax
So the flames are technically asking for an incremental subsidy in the range of $4m per year, give or take. Its less than half of what you're suggesting it is.
Quote:
Originally Posted by GGG
Your logic highly flawed that ticket prices would be lower with partial municipal funding. The Flames stating that the ticket tax is their contribution is essentially a statement that they charge what the market will bare for tickets. Unless clauses are written into the agreement the ticket prices will not change regardless of who funds the building.
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This is probably true for the flames, but probably not true for concerts. Taylor Swift if going to charge $120 for ticket and on top of that a concert-goer will pay a ticket tax. The more the city subsidises, the lower the tax, the lower the cost.
Quote:
Originally Posted by GGG
So in conclusion all of the things you listed do a better job of accomplishing your stated goals do then an increase in the Flames subsidy would.
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I 80% agree with this. But not entirely...namely, the flames say they should be able to keep their currently subsidy of paying no property tax and no rent. The city disagrees and wants to either charge them property tax or rent.
So in other words, the city is actually trying to reduce the flames' annualised subsidy under a new arena arrangement. And this is what Ken King is terrible at communicating.