[News] Tentative Agreement Reached! New Arena!

[JBR]

Mods, could we add a poll question, just for fun? In favour, or against..

[Mr.Coffee]

Originally Posted by Beatle17

I am pretty sure Murray Edwards has paid a little more taxes to Calgary, Alberta and Canada than you will ever be able to see. Have a real argument and leave the personal attacks out, that is where you lose any credibility.

Has he??

I’m sure you’re right, I’m not a billionaire nor even millionaire but I’d LOVE to see the wealth build vs. True taxes paid over time. I mean actual legit taxes too.

Would be awesome to see that and understand and decide for ourselves (not that it is any of our business at all anyway). Just speculating and BSing. I have a feeling very wealthy people have a way of reducing their tax burden vs the rest of us middle class larva and by a wide margin.

Capital is power, in this society and ultimately historically all societies.

[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.

[Wormius]

Ugh. Brett Wilson trying to explain how the Flames are actually giving the city this new arena.

[kermitology]

Originally Posted by Wormius

Ugh. Brett Wilson trying to explain how the Flames are actually giving the city this new arena.

So weird to have this wealthy socialist go on about this.

[FireFly]

Originally Posted by Torture

It's definitely a better deal (although not perfect), but I just hate the one-week timeline to make a decision. Nothing like pushing a false sense of urgency rather than taking your time and studying/analyzing/consulting properly before spending hundreds of millions of dollars.

Not to target you in particular Torture, but I've heard this sentiment a lot lately. The thing is, the consultations have taken years. They have done studies and analysis for years as individual entities and as a group. This is what they have come up with and it's an agreement that all of the major players are on board with. Joe Blow doesn't know so I'm not 100% certain why he should get much say?
What does the public say? Well, I've heard a lot of "we just had 60 million in cuts, so we shouldn't spend this money on an arena." That's the public sentiment right now. Obviously, the public doesn't know how it works or they wouldn't be saying things like that.

[Bunk]

The way I look at this deal is it's a capital project with an ongoing revenue stream and tangible and intangible civic benefit. That's in contrast to many other types of capital. The structure is such that the better the facility does, the better the revenue stream for the public. Things like NPV seem to miss the point.

[Slava]

Originally Posted by Bunk

The way I look at this deal is it's a capital project with an ongoing revenue stream and tangible and intangible civic benefit. That's in contrast to many other types of capital. The structure is such that the better the facility does, the better the revenue stream for the public. Things like NPV seem to miss the point.

Well I just plain disagree. I know there are intangibles and of course there is a benefit to the city here, so I'm not wholly against this. But proper financial review and due diligence doesn't "miss the point". It's necessary, particularly when a lot of the benefit is for a private corporation.

[MoneyGuy]

Originally Posted by TGH44

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.

You might never enter the library but you still benefit from it.

[Flamette]

I get that times are tough but the City also can’t afford to not build either. What doesn’t get captured in the info graphics is the stimulus provided by the construction process. Infrastructure spending is at decade lows across the various levels of Government. Construction companies in this province are suffering. A project like this will engage several trades that aren’t getting lifted by mega projects like the Green Line or Ring Road.

[TheIronMaiden]

Originally Posted by FireFly

Not to target you in particular Torture, but I've heard this sentiment a lot lately. The thing is, the consultations have taken years. They have done studies and analysis for years as individual entities and as a group. This is what they have come up with and it's an agreement that all of the major players are on board with. Joe Blow doesn't know so I'm not 100% certain why he should get much say?
What does the public say? Well, I've heard a lot of "we just had 60 million in cuts, so we shouldn't spend this money on an arena." That's the public sentiment right now. Obviously, the public doesn't know how it works or they wouldn't be saying things like that.

It will be a classic case of the 30 or so percent of people bashing it and complaining to no end, while most people who are ambivalent or in support of it don't have much else to say but 'meh' or 'good'.

[Flash Walken]

Originally Posted by Flash Walken

The right of first refusal for adjacent property development to Flames ownership makes this a slam dunk from their perspective.

This feels actually very similar to the Edmonton deal.

The real estate around the new arena proposal is significantly more valuable than the land around the toilet up in the Chuck.

This is a huge windfall for the flames and their cheerleading hangers on like Brett Wilson

[Locke]

Originally Posted by MoneyGuy

You might never enter the library but you still benefit from it.

And a Calgarian may never enter the new arena, but still benefit from it. Is that benefit worth the cost? Thats the nebulous question because in some cases for some people yes, and for others no and for yet even others its nearly impossible to determine. Whats the net benefit between all 3 scenarios?

This is the inherent crux of the issue with event centres and arenas. The studies surrounding the economics of their benefits one way or the other, are very nebulous.

Its nearly impossible to quantify all of the variables, so it was important not to get taken to the cleaners in terms of costs to keep potential risks low.

[TGH44]

Originally Posted by MoneyGuy

You might never enter the library but you still benefit from it.

How do I benefit from it besides the general idea that Calgary is a better City to live in? I guess I also have the option (which may be worth something) of using the library in the future. All these same things apply to the event centre, bike lanes downtown etc. At the end of the day the City makes capital project decisions based on improving peoples lives in Calgary, making Calgary a better City to live in. The vast majority of City Capital projects would not have a positive NPV.

[oldschoolcalgary]

City Building necessarily excludes some ppl from directly benefiting from projects that use public monies. Like many have noted however, that doesn't mean the City doesn't need those projects.

i've used the West LRT once
I've used the Ring Road 3 times
the new interchanges on Crowchild in the nw, i've used maybe twice...
I haven't stepped foot into any of the new rec centers

The reality is that now is the best time to build because of lower constructions costs; building it during a boom is foolish as you are not benefiting from lower labor and material costs. I'm a Keynesian, so i think that if you are going to spend public monies on infrastructure, doing so in a slightly depressed economy give you a lot more monetary efficiency...

[Canadianman]

Originally Posted by Fire

Frankly I am surprised on the positive reaction in this thread, I was expecting to come into this thread hearing from 50% of posters saying how bad this deal is for the city. Good to see.

No property taxes for CSEC but they pay all expenses with running the arena.

It is a bad deal, but it is a reasonable deal in light of how other municipalities seem to treat sports teams.

[Timbo]

Important to note that building will commence in 3-4 years. Let’s not lose sight of that.
The economic climate might be different then. The 60 million business tax relief may not be a factor anymore.

[TheIronMaiden]

Originally Posted by oldschoolcalgary

City Building necessarily excludes some ppl from directly benefiting from projects that use public monies. Like many have noted however, that doesn't mean the City doesn't need those projects.

i've used the West LRT once
I've used the Ring Road 3 times
the new interchanges on Crowchild in the nw, i've used maybe twice...
I haven't stepped foot into any of the new rec centers

The reality is that now is the best time to build because of lower constructions costs; building it during a boom is foolish as you are not benefiting from lower labor and material costs. I'm a Keynesian, so i think that if you are going to spend public monies on infrastructure, doing so in a slightly depressed economy give you a lot more monetary efficiency...

On that note, three years of construction is good for local trades people. Some of that public money will land back in the pockets of local workers. Even when the building is done an arena employs hundreds of people of all educational backgrounds. It's not as if the CSEG oweners are the only people who will make money off this project.

[Bonded]

I do not think a city ever comes ahead money wise on an arena deal and I am not a huge fan of public money going to a private enterprise but if the city wanted the Flames to stay unfortunately they needed to pony up some money because of the precedent set in North America. Would have preferred no cash contribution from the city or the city getting a bigger chunk of revenue.

I am not big believer in the intangible spin off benefits becoming actual cash revenues. It just comes down to if you think the city will be further ahead with the Flames and an arena that can handle major concerts, or if the city is further ahead to veto the deal and hope the Flames bend, and the city does not lose much as a city without a sports team or modern arena.

City council had to decide if they wanted to risk losing the franchise by sticking to their guns.

Less of a screw job than Calgary Next though, so that is good!

[Flamin' DBag]

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.

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.