Quote:
Originally Posted by TGH44
I am a tax payer and long time STH. For me, this issue is pretty straightforward. The City makes investments in capital projects that it believes will enhance and add value to the lives of its citizens. For example the public library enhanced the lives for a segment of citizens but I (and my family) will never use it or get any value from that $235M investment, however, I am fine that a portion of my tax dollars went towards that project because I see the value for other citizens. Likewise, the Flames in Calgary add value to me and my family (I take my hockey playing sons to every game) and I'm fine with my tax dollars going towards an event centre which will ensure the long term viability of the Flames in Calgary. Having gone through the deal and online documents, this seems a fair deal to me (I agree a fair deal is important and I wouldn't support a very one sided deal, but a blanket statement that public $ should never be used for these types of capital projects is ignoring and discounting the benefit that I, my family and many other citizens get from the Flames being in Calgary and the other events etc.). The NPV and IRR are not private industry level, however, I'm comfortable in saying the cashflow the City will receive from the Event Centre over its life will be significantly more than that received by the City from the new public library. Again, I'm happy that my tax dollars support both projects as a big portion of the citizens of Calgary will receive value from both projects. If the City only had funds for one of the two projects then things become more contentious but that isn't the case.
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You make a really good point. It's hard for the city to spend public dollars to benefit all Calgarians and we shouldn't expect the Arena deal to do that. I think that the difference with the arena deal, when compared to the library, is that the city is spending public funds to subsidize a private business that will make good returns. I don't necessarily have an issue with this, but if the city will equally share in the risk of this deal, they need to equally share in the rewards. The current deal is much improved on previous suggestions but its difficult to understand whether or not it's a good investment for the city.