Quote:
Originally Posted by ComixZone
I think you're underestimating the Flames ownership. I don't believe for a second that they're coming back to the table until the City of Calgary approaches them with an offer that doesn't include 100% repayment, because again - I don't think the City is going to find an investing partner willing to put up the level of investment in Nenshi's proposal.
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Completely agree. The City needs to come off of a 100% repayment based strategy.
However, ownership needs to come off of a 10%-20%* contribution strategy. Prepayment of rent does not constitute a contribution, it constitutes rent.
*To clarify, the time value of money certainly means upfront rent payment has an aspect of true contribution. $275M spread over 35 years at 4% has an NPV of about $150M. So it represents a $125M Flames contribution (25% of the $500M arena). Add in that the Flames' $500M ignores land value, Saddledome demo, and infrastructure tie-ins to get to my assumed 10%-20% contribution.