Quote:
Originally Posted by Macindoc
The Seattle metropolitan area houses 3.5 times the population of Calgary. The stadium will eventually host both a hockey team and a basketball team. The arena will have a ticket, concession, parking, and advertising revenue 300 days a year. In spite of this, the Seattle Arena Company will pay only $5 million a year for the property and will be exempted from property tax.
A new arena in Calgary will generate significant revenue about 150 days a year. City council has offered CSEC a loan, to be paid back to the city through a combination of ticket and property taxes. So yes, what Calgary is offering (loan, to be paid back through taxes) is in a way comparable to what Seattle gave the SAC (no loan, but no taxes), but for a facility that will earn half the revenue. From the investors' point of view, how are these two situations comparable?
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It is an interesting method of taking an upfront cash hit for a long term sweetheart deal;
"Hey we will pay for the building but we want the property free and tax exempt." I assume the annual property taxes on a large arena and parking lot would be quite large so to not have to pay that over say a 25 year life of the facility could be an attractive alternative method of getting these new buildings done without the city having to put up large sums of cash up front.