This deal appears to be the following
275 million City
11 million demo
40 million In kind land donation (from the how they are paying it slide)
0 dollars in property tax (this just continues the existing subsidy the city gives the flames)
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326 million City
155 million over 35 years works out to 100 million npv at 3% discount (my assumes city cost of borrowing.)
2.5 million in naming rights over 10 years. Nothing stated about next 25.
75 million in local sport over 35 years (some of this is new money but I suspect this a lot will be in kind and other things so I don’t think I would count it)
135 million in new property taxes (This again shouldn’t be counted as it is displaced from other areas of the city so not really new)
So the city pays about 184 million in NPV for an arena and continues the tax free subsidy of the flames.
I don’t understand why more money can’t be extracted from the Stampede as they free up a ton of extra space but I don’t really know much about Stampede finances. Maybe they don’t print money like they do in my head.
The flames end up paying 376 million using a 3% discount rate on the ticket tax cash flow. However if the flames use a 10% discount rate on future cash flows as a business might where having the money now is worth much more than it is to the city then the Ticket tax only cost them a 43 million NPV but for this I will just use the 3% throughout.
So in the end I think it breaks down with 184 million City of Calgary 376 million flames plus the city continuing its existing subsidy that would occur anyway.
It’s not a great deal for the city as in an ideal world the cap would be 20 million lower and each team would get a free arena every 30 years. But that would take all the cities in NA to get together and stop the foolish race to the bottom. However, it’s probably close to the maximum price the flames are willing to pay before considering moving. So the city did a good job here paying for roughly 1/3rd of the cost excluding land and 37% including the land value.
Pending all the other details coming out of course
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